14 ms·

After Facebook fails

367 points by angusgr 14y ago

tferris 14y ago
Yes, they massed up the IPO, Facebook doesn't have a true value as Google or Apple, ads do not work and user growth is finished. I have doubts too that Facebook will match expectations but I am a sick of reading every other day why FB fails or what happens after they fail. I don't like Facebook either and stopped using it actively but I know for sure that Zuckerberg is a very smart and talented guy just looking at how he build this company, kept power the entire time and with 16B$ he'll find sooner or later a way how to get money from all those Facebook addicts.
Smerity 14y ago
He points out some of the terribly targeted ads that Facebook pushes on users. I think this is a huge issue that's not discussed enough. Facebook has all the data but no real targeting. This stems from two core issues: 1) they don't seem to use their immense datasets as effectively as Google does and most importantly 2) they rely on the advertisers to target their ads. Advertisers, even when handed the best demographic tools in the world, seem to get it horrifically wrong. This means people are exposed to bad advertising and learn to ignore it. This also means that advertisers will complain that Facebook doesn't give them the bang for the buck that they're after. Facebook don't mind however -- they still get their revenue. In the long run Facebook need to work out how to target ads. The longer they leave these horrible ads in place the more desensitized their userbase will become. They're poisoning their revenue stream by allowing any and all ads through, regardless of quality or accuracy in the target market.
- alanfang 14y ago
  Based off the ads the author cites in the article the issue is the lack of data, not poor targeting by advertisers. For example the author wouldn't see the "Boyfriend Wanted" ad if he listed himself as married in his Facebook profile (Facebook aggressively forbids dating ads targeted towards people who list themselves as married or in a relationship). All online advertising platforms rely on advertisers to target their ads. If this really is the issue, which I doubt, it applies to the entire advertising industry not just Facebook.
  - Smerity 14y ago
    I can tell you my profile is full of information on me yet looking at the ads I see on Facebook right now: a) "Join the Army as a Truck Mechanic" (university graduate in IT...) b) "Study Marine Biology" c) "Cheap baby strollers" d) "Learn how to make money trading on the Forex market". These are just the most egregious examples -- most others are just for products and services I'm not particularly interested in. If it can't accurately target ads for me then I fear greatly for Facebook's business model... [If you want to see what information they have to target ads, feel free to check out http://www.facebook.com/smerity http://www.facebook.com/smerity -- next to all my details are public as I assume if it's on Facebook it's public]
  - microtherion 14y ago
    I have always listed myself as married (even as public information), yet I see a dating ad on my sidebar. The two top ads were for high heel shoes. Either FB has me pegged as a two timing trannie, or their targeting is really poor.
    - greedo 14y ago
      This doesn't have to be a case of poor targeting by FB; it could be broadcast targeting by the advertiser who isn't as selective as we would expect. And for brand awareness advertising, I could see that it might be worth it, depending upon the cost. I have no intention of using eHarmony (happily married here), but I'm aware of them due to both online and offline advertising. If a coworker asks me about online dating, I'm sure I'll remember eHarmony. That brand awareness has obvious value to advertisers, and if the cost is in line with their budget, it explains the "mis-targeted" ads.
- kposehn 14y ago
  > Facebook has all the data but no real targeting In general, this is incorrect. What you see as poorly targeted ads are those where the advertiser does a poor job, not Facebook. The tools are there and the most successful advertisers use them.
  - Smerity 14y ago
    I believe we're arguing the same point. Advertisers are the ones who do the targeting and even with the tools Facebook provides, they make terrible targeting decisions. It doesn't matter if good advertisers use it properly, the majority do not. If Facebook don't prevent these poorly targeted ads then they can't guarantee any level of targeting at all on their site. This means that users are desensitized to the ads shown there, decreasing their value as an adspace.
    - waterlesscloud 14y ago
      It's almost as if there's a business opportunity here.
- glesica 14y ago
  Based on all the anecdotes floating around, this one included, I wonder if part of the problem is that the demographic groups advertisers (that use Facebook) really seem to want to target are the most resistant to the ads. This would then lead advertisers to broaden their targeting to the point where Facebook's enormous trove of data is basically useless. Who cares if your ad is being shown to the exact 50,000 people on Facebook who are a perfect fit for your product if nearly all of them refuse to click on it? So you broaden your demographic selections, the ad goes out to 500,000 people now, but now your product has no relevance for the vast majority of the people seeing it. Not sure, just thinking "out loud".
- lotharbot 14y ago
  One of the major problems with FB ad targeting is that a lot of it is keyword-driven without regard for context. If I'm on Google searching for a product or service, the context is very likely "I want one of these" or "I'm curious about this", so displaying ads strictly by keyword works fairly well. But if I mention something on Facebook, it's as likely to be negative as positive. If I've just said something critical about a particular ideology, an ad for "date [ideology] singles" is as you say "horrifically wrong" (especially since I'm happily married.) Another contextual issue FB gets wrong is timing. Often I'm mentioning something I already own or something I've just completed. Telling me about a restaurant right after dinner, or tax software right after I finish my taxes, is not likely to be relevant to me (whereas if I type "restaurant" or "taxes" into Google it almost definitely is.) Sometimes it comes down to advertiser stupidity (forgetting to check if I'm married, for example.) But the fundamental problem is that judging intent is a hard problem for a computer. It's easy to write a filter that figures out what I'm interested in when I type a query into Google; it's hard to write one for a status update I type into Facebook.
  - ryanmerket 14y ago
    Facebook advertising isn't keyword driven, it's interest driven. AFAIK Facebook doesn't parse your status updates to find keywords -- they look at what you have Liked.
    - taejo 14y ago
      They certainly do look for keywords in statuses (though I don't know if they use them for advertising). At one point they grouped statuses by subject ("Alice and Bob both mentioned Christmas"), and it suggests groups/pages based on your statuses (I mentioned reading something in French in a status, and it suggested I liked "French language").
      - ryanmerket 14y ago
        Yeah I was referring to advertising purposes. Even if they did use keywords in statuses for advertising I would imagine the the weight of those keywords verses the weight of a liked object would be significantly lower since the relevancy would be low.
- gizzlon 14y ago
  > He points out some of the terribly targeted ads that Facebook pushes on users.. So true.. Why don't I get ads like this: "It's almost lunch time, the weather is great and we kind-of know where you are. Here are 3 lunch places in the area with outdoor seating and a few available tables." Instead I get mostly dating sites and google-translated ads to "make money fast"
- jacquesm 14y ago
  The problem is much simpler than that. Facebook simply does not have enough advertisers to do a proper match-up between user and ad.
a3d6g2f7 14y ago
Original source: http://www.technologyreview.com/web/40437/ http://www.technologyreview.com/web/40437/
- deleted 14y ago
  [deleted]
fleitz 14y ago
If internet advertising is a bubble that's going to pop they might as well retitle this article: After Google, Yahoo and most web properties fail. I guess all we're going to be left with is craigslist and basecamp, also there won't be any newspapers because they're dead because of the internet, and all their replacements are dead too because internet advertising doesn't work. (according to the OP)
- waterlesscloud 14y ago
  Cue someone responding "But Google targets intent." It's the same discussion, over and over and over.
  - nl 14y ago
    10, even 5 years ago the same people who are now saying "Facebook ads are ineffective, and I never vist Facebook anyway" were saying "Google ads are ineffective, and I've never clicked on one anyway".
- nextparadigms 14y ago
  I think there's a Facebook Advertising bubble, not an Internet advertising one. I don't think Facebook ads have ever really worked, but most thought they did, which is why it's a bubble.
  - deleted 14y ago
    [deleted]
hkmurakami 14y ago
Every time I read about how online targeted ads have poor returns for advertisers, I think to myself: "These advertisers know that the ads have low ROI because things are measureable online. How (in)effective would traditional advertisements prove to be, if they were as measurable as their online counterparts? How (in)effective would traditional advertisements prove to be, if they didn't interject themselves into the medium in such grotesque, user-experience destroying ways?"
- brandnewlow 14y ago
  Two points: 1. There are lots of digital ad tools that have great ROI. No one clicks on ads....until that one time they do. Critics of digital advertising like to hone in on anecdotal examples of online ads failing to support their points. This blog post is a great example of that. 2. Your second point is why Madison Avenue was so horrified by Google when they started selling ads. Tracking the performance of each individual ad was so scary they couldn't fathom it. Online ads are no worse than offline ads, we're just able to measure online ads in ways that we can't with offline.
  - josephcooney 14y ago
    I agree, but I don't think things always have to be that way. I know a few people working on projects to improve the measurement capabilities for some kinds of off-line advertising.
    - brandnewlow 14y ago
      That's terrific. I suspect the folks selling those products will be hugely resistant at first.
  - suking 14y ago
    Offline ads for direct response are easily measurable with tracking numbers. Branding ads - well - I have no clue how they track any of that - but then again how do you track a CPM media buy just designed to increase brand awareness online... (note: I come from the DM world).
BiWinning 14y ago
And what about when all TV is served over the internet? Or when all billboards are controlled over the internet? Or all magazines are displayed on epaper via the internet? 95% of advertising will be done over the internet, and if the author is too short-sighted to see that well then that speaks poorly on him. Of course if he had any insight maybe he'd be building something and not whining about it. He just sounds bitter because he's getting left in the dust.
- deleted 14y ago
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- pyoung 14y ago
  Did you make it to the end of the post? He is working on a VRM system that supposedly puts the power in the hands of the customer, rather than the vendor.
ktizo 14y ago
I could see facebook being replaced by nothing more fancy than a web design app with a social webring gizmo.
- psc 14y ago
  Facebook's advantage over any competitor is that everyone is already on Facebook. I could see early adopters moving to what you're describing, but it would take ages to move the other 90% of the users over. So at least for the next few years, it's unlikely that people will transition en masse to a completely new service.
  - ktizo 14y ago
    That was also Yahoo's advantage for a while. My point is that the underlying functionalities of Facebook are features of the web in general, not of Facebook specifically. Facebook made them simple to use and put them all in one place and now has grabbed an impressive amount of share as a result, but they are not on the most solid of ground, as their social functionality could easily be swallowed by the browser itself, or by a clever lump of javascript. And remember, the inline advertising is only required by their business model, not by the functionality of the service itself. [edit] That said, I sort of agree with you that they probably have a few years before the mass exodus, I wouldn't give them a lot more than that however.
  - dredmorbius 14y ago
    "Everybody" is already in a lot of places. They're on FB. They're also on Google. A hell of a lot of them are still on Yahoo mail. They're using Craigslist. And eBay. And Amazon. And The New York Times and/or Fox. Hulu. Whatever Apple's calling its offerings these days. Even Microsoft. To say nothing of a bunch of B2B service sites that have large user lists (ADT, Delta Dental, Beico, etc.). There are a bunch of sites that have a very large userbase. Large enough at least to get past the network effects problem sufficiently to start boostrapping social onto things if they want to do so. Which is one of the reasons that network effects, in and of themselves, offer such transient advantages. You may be able to corner the network effect in one area for a time, but you're not going to conrner all network effects in all areas, leaving you vulnerable to intrusion and erosion. Several of the players listed above have a vastly better advertising or direct revenue capacity (Google, Apple/iTunes, eBay, Craigslist, and most of all in my mind, Amazon). Craigslist is a wonderful example of a site that leave huge amounts of potential revenue behind (charging for only a small fraction of jobs and housing listings) to create a hugely compelling advantage in the classified advertising market, and supporting some "social" features (there is a pretty active, if not grossly overwhelming, forums section). Amazon also has discussion. Google has entered directly into the frey. The direct problem of social networking is one of coupling a modicum of engineering talent to a financing capacity and and existing network. I've said it before and I'll say it again: social is mostly a way of tying notices and feeds to specific users, and there's absolutely no inherent reason why it needs to be based on a centralized application model. Diaspora is already a community-based project, and may be heading toward a decentralized hosting model. Once that happens, IMO, the jig is up. Not because Diaspora will instantly subvert Facebook, but because all the 2nd-tier social networks will have the option of joining FB (or whomever leads the siloed SN space at the time), ceding significant power and control to them, or of playing in the open space. It's the same strategy that's lead Linux to subvert all other operating systems on the server, embedded, and handheld/mobile markets (less successfully still in desktop/laptop). Sun, IBM, HP, LG, Samsung, HTC, Motorola, Google, Amazon, B&N, etc., couldn't take on Microsoft directly with their own OS offerings, but they could join forces by agreeing on an open standard which offered none of them a proprietary advantage of itself, but allowed them to exercise other business strengths to benefit (and yes, Apple's been doing quite well with an alternative strategy, though also based on an open UNIX base). So yes, I'm bearish on Facebook.
waterlesscloud 14y ago
There's actually some interesting stats regarding how much FB gets per user in the US vs other regions. It's much higher in the US, which does indicate growth potential in other areas. http://techcrunch.com/2012/05/03/stats-facebook-made-9-51-in-ad-revenue-per-user-last-year-in-the-u-s-and-canada/ http://techcrunch.com/2012/05/03/stats-facebook-made-9-51-in...
a3d6g2f7 14y ago
FB has bought itself some more time with this IPO. How much time does $15BB buy? Even if advertising executives and industry analysts give up on FB, FB stil has the cash to sit and wait for their muse to appear (like Google's discovery of ad feeds in search). Given that FB no matter what they do, no matter how much they fail to perform, is now subsidized with $15BB, will they drive the ad market down?
polemic 14y ago
I have no idea if Facebook is valued correctly or not, however I think this misses a vital point. Facebook is not nearly the same as other web ventures. It's ability to target ads seems secondary to this: From http://www.kenburbary.com/2011/03/facebook-demographics-revisited-2011-statistics-2/ http://www.kenburbary.com/2011/03/facebook-demographics-revi..., slightly out of date, but still useful: - Average user visits the site 40 times per month - Average user spends an 23 minutes (23:20 to be precise) on each visit - Global users 629,982,480 (I believe this has passed 800 million now) So, on average hundreds of millions of people are spending about 1/2 an hour looking at Facebook.com every day. As much as their ability to target ads is hyped (or derided), does it really matter? Isn't targeting just a way to charge a premium, or drive click-thru on massive volume? Facebook isn't competing with other websites for online advertising. It's competing with the entire entertainment sector for all advertising, everywhere. That isn't going to change soon.
- glesica 14y ago
  Keep in mind that all those page views and all that time spent on the site costs Facebook money. It's not like outdoor advertising where the cost is set up front (then amortized over the life of the sign, device or property lease) and the marginal cost for additional viewers is zero. Another thing to keep in mind is that there are competitors constantly targeting Facebook. But not just targeting them on price, targeting the features of their site that keep people there for 30 minutes every day. This means that Facebook has to spend money to "improve". Again, compare this to outdoor advertising where the competition is largely just a matter of bidding on space every so often. I, like you, have no idea what Facebook is worth or how successful their business model will turn out to be. However, I think it's important to keep in mind that turning page views (or minutes spent on the site, whatever) into money really isn't a fully solved problem, at least not in the general case. Facebook definitely has their work cut out for them I think.
  - joe_the_user 14y ago
    Excellent point Also, keep in mind that Facebook has attracted some section of the "best and the brightest". As far as I can tell, they do a really, really good keeping Facebook ahead of the curse; fun and ahead of potential competitors. The thing is that since these people are the best, one might logically expect that they want compensation in some form, possibly only the form of knowing they're working on the leading edge or possibly in the form of lots of money. So Facebook's ongoing operations to an extent depend on project projections coming true. If they become like Yahoo, they'll bleed people like Yahoo and make horrible missteps like the way Yahoo rolled-out Axis (an idea that appeals to me but which was apparently utterly fumbled).
raintrees 14y ago
Interesting... I was just going through the phase of unsubscribing from all of the legitimate info/news sources I had subscribed to over the years to try to reduce my daily Inbox levels, and it got me to thinking about reversing the tables so I could announce when I _wanted_ to partake and for what reason, and THEN get appropriate emails, links, ads, etc.
- redwood 14y ago
  Right on, is there a platform for this yet? Perhaps fbook can pivot to this... since it'd be tough without a big user base first. This only works for non demand-creating advertising of course.
  - redwood 14y ago
    (edit "raintree" would be a great name for such a service!!! --- hint hint, go for it!)
jayzee 14y ago
Isn't this the same Michael Wolf that Loeb, the activist hedge fund manager, picked for Yahoo's board? If this is how he feels about businesses driven by online ads I wonder what he thinks of Yahoo's odds.
malachismith 14y ago
It's sad when old people get bitter about change
mcantelon 14y ago
I didn't get through the whole post as it's kind of disjointed and meandering, but its initial assertions seem shaky. Personalized ads do have business value. After looking at some videos about Native Instruments audio gear on YouTube, I started getting a lot of Native Instruments ads pretty quickly. Unlike television, I am being shown ads for something I might actually buy rather than ads for things I will never buy. If traditional advertising is effective, then I don't see how this more targeted advertising can't be more effective. As for "uncanny valley", what's "icky" now won't be icky in 10 years. You can get used to anything and kids growing up with the "uncanny" will quickly see it as normal, whether this is a good thing or not.
- pyoung 14y ago
  The practices of the marketing and advertising industry have a history of being received negatively, only to be reluctantly and slowly accepted as a normal part of everyday life. I am currently reading an old economics books (org. published 1958) that rails against the industry for creating unwarranted demand for non-essential products, and argues that it is a root cause of economic volatility. Of course, by today's standards, the industry practices of 1958 would seem tame.
- tatsuke95 14y ago
  >"After looking at some videos about Native Instruments audio gear on YouTube, I started getting a lot of Native Instruments ads pretty quickly." So, you sought out the product first, then received ads? I think that's the point. What does this accomplish from a brand awareness point of view? You have already made it clear you're interested.
  - mcantelon 14y ago
    >So, you sought out the product first, then received ads? I think that's the point. What does this accomplish from a brand awareness point of view? You have already made it clear you're interested. A traditional sales technique is to retain a list of potential leads and call them every once and awhile to see if the lead is interested in converting into a sale. This technique exists because it works and the purpose of the targeted advertising is similar. Keep me reminded of the product and at some point I might be inclined to buy.
jriediger 14y ago
I think a lot of the analyses of Facebook's advertising model miss one important point. Sure, their CTRs are not even closely comparable to Google's numbers. However, when people search on Google, they're often actively looking for certain products that lead to high CTRs on these targeted ads. In Facebook's case, people want to socialize and generally don't want to be disturbed by ads. Basically, Facebook currently uses an advertisement model that is not very natural to its product (and not very well targeted for a number of reasons). But Facebook just doesn't care at this point, because they still generate sufficient revenue through the sheer number of users. So the real question is whether Facebook can come up with an advertising model that is truly natural to its product (e.g. actual product recommendations by friends in conversations etc.). To conclude that Facebook is doomed to fail because their advertising model is suboptimal seems to be a little premature.
dr_ 14y ago
First of all, it's not clear that social media advertising is going to fail, just because the author is not happy with results he gets. It was announced today that Oracle purchased Vitrue http://techcrunch.com/2012/05/23/more/ http://techcrunch.com/2012/05/23/more/ a company with close to 100 million a year in revenues. Presumably, for many people, it works. Secondly, the title of the article is After Facebook fails - which implies it will fail and will do so because it's advertising model will fail - but who says facebook primary business model has to be advertising? If they continue to grow to over a billion users - who says that the "like" button on sites all over the web now shouldn't be charged for? who says users shouldn't be charged for premium services? more photo filters on instagram - just pay! the possibilities are endless, and advertising, for now, is just one of them. my gut says it will become less and less important as a revenue generator over time. and personally I will welcome that change, cause with all the ads adjacent to the chat bar, the site is looking pretty messy.
clarky07 14y ago
If he put that he was married on the site, he wouldn't get the dating ads. I just checked my facebook (for the first time in awhile) and 3 of 4 ads where things that made sense and were interesting to me. I personally don't think Facebook is worth nearly as much as their current valuation, but as long as they have 900 million users who average a 1/2 hour a day on the site they are worth quite a bit. As for the targeted ads, I'd much rather have ads for things that are interesting to me than for things that aren't.
cletus 14y ago
Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has information to figure out what your interests are and so on. A common misconception from fearmongers is that your data is being sold. It is not. Advertisers are paying to have their creative put in front of a particular audience. The most important strategic move Facebook made in the last few years (IMHO) is the Like button. Whether or not you "Like" things is irrelevant. The main purpose of that "Like" button is (IMHO) as a tracking cookie. Visit any Like-enabled site and you see a small piece of content from Facebook that tells Facebook all the sites you visit. It's a tracking cookie like any other and personally I have no problem with that. Just make no mistake why the Like button exists. Facebook also has a wealth of information in terms of who your friends are, what your interests are, your relationship status and so on. It's this alleged treasure trove that people point to as the real value of Facebook (combined with the network effect). I disagree. I think that information is largely useless for a number of reasons: 1. Because of social games and the like who your friends are on Facebook loses a lot of meaning. In the very least Facebook has to filter that information and determine who your real friends are (which it probably does anyway for News Feed filtering and so on); 2. Where people go and what people do is far more accurate than what people will tell you about themselves. As House says--or used to say--"people lie". When you ask someone their interests or opinions it will pass through various filters of what that person thinks you want to hear, what they want the world to believe, what they themselves wish they were and so on. It's a distortion. It's a bit like dating or job hunting. You look at any online profile or CV and you'll see lies, distortions, omissions and so on. As Chris Rock said, for the first 6 months you're not dating them, you're dating their representative. Facebook has no search engine. Whatever you say about the size of display ads, search advertising is still far bigger. With search you have intent. People want to find things by their actions. On Facebook ads are an annoyance. It's the difference between wandering the streets shouting "does anybody want ice cream?" versus putting an ad in front of a bunch of people who have already told you that they're looking for ice cream. Their mobile presence is at the behest of Apple, Google and (arguably) Microsoft. Mobile (IMHO) poses an existential risk to Facebook, which in part explains the exorbitant price tag paid for Instagram (it has nothing to do with any alleged "bubble"). Much of the engagement on Facebook is because of games. Those games are increasingly going mobile. This is bad for Facebook. At $100B IPO valuation that put Facebook being worth half of Google with 5-8% of the revenue and significant strategic risks. Of course it was overvalued. It's still valuable but it will take some time to figure out exactly how much it's worth.
aresant 14y ago
This essay reads like an advanced lifeform encountering, and misunderstanding, the average human consumer. Two quotes stick out: (1) That he goes "on Facebook. . . as infrequently as I possibly can." This statement disqualifies his entire experience. Hundreds of millions of average-consumers use Facebook DAILY. These users update their content, they integrate more of their life. They click the like buttons. They share. This in turn creates more specific opportunities for advertisers to target more relevant ads vs. the junk broad market ads he uses as examples of their failure (credit cards, dating, classmates known to be JUNK-CPM offers that work everywhere). (2) That his perfect model is inclusive of "Vendor Relationship Management" that lets people manage their vendors, vs the vendors managing the people. I might use VRM along with my HN brethren but average consumers won't adopt VRM because it requires them to choose. Advertising works because people prefer to be told what to do. This article fits nicely into the "FB is destined to fail" cannon, but I find the author to be grossly misinformed by his own experiences.
- pyoung 14y ago
  I would argue that VRM already exists to some extent. When I want to buy something, I Google it. You can instantly comparison shop and add items to a shopping list to keep an eye on the price over time. You might not directly negotiate with vendor's, but I am not sure most people really want to or need to, including HN'ers.
- PakG1 14y ago
  Grossly misinformed is perhaps a bit much. I don't think a guy like Doc Searls is so out of touch to not know what the general populace is doing. He contributed to The Cluetrain Manifesto, he's a well-respected writer. http://en.wikipedia.org/wiki/Doc_Searls http://en.wikipedia.org/wiki/Doc_Searls I think making statements like what you quote in (1), he's making a bet: I understand what people are really truly like, and this stuff will prove to be just a fad; eventually, people will realize I'm right. He predicts online social networks as we know them to decline in 2013. If he's right, then it doesn't matter what Facebook users are doing today, even if they are using it daily. There was a time when MySpace and Friendster were the top social networks on the Internet too. Facebook just out-executed them. The interesting question is if Facebook had not been around, would MySpace or Friendster still have been around in 10 years anyway? Or would it have been proven to be too faddish after the activity level reached a certain boiling point?
foxylad 14y ago
Marketing used to be about information, letting potential customers know your product exists. Then it morphed into manipulation, but I think that has run it's course - even young children now know when they are being manipulated, and are resistant to it. Because of this, my company concentrates entirely on providing remarkable services for remarkable prices, so our customers do our marketing for us by telling other potential customers. In our experience, this strategy works magnificently - we're doubling our revenue every year without spending a cent on marketing. Back to Facebook - I see Google ads as informational marketing, and Facebook's as manipulative marketing. And currently Facebook is horribly bad at it - I think I've "liked" two products ever, because I think most of my "friends" would think I was really lame for endorsing anything that isn't truly exceptional. Having said that, our services have thousands of likes...
alanh 14y ago
Wow, that header really reminds me of the circa-2006 Facebook design, with “the facebook guy” in the top left. Screenshot here: http://joshvandervies.com/is-the-old-facebook-better-2/ http://joshvandervies.com/is-the-old-facebook-better-2/
melvinmt 14y ago
One thing I've noticed while reading the article is that my banner blindness is so strong, that I even had to force myself to look at the image full of ads being discussed in the article. I guess the author has a point.
soup10 14y ago
I have a crazy idea, why doesn't Facebook charge for premium accounts? They would really only need to get what? Maybe 10% of their users to sign up to some kind of premium subscription service to justify their valuation. It's funny how this option is rarely ever mentioned, as if selling a service to consumers is some kind of taboo for internet companies.
- pyoung 14y ago
  It's been mentioned plenty of times (at least in discussion forums). Also Facebook has been experimenting with sponsored posts in NZ, where people pay to have their status posts featured more prominently in peoples news feeds, which is essentially a 'pay for premium' service. From what I understand, it's not going too well.
  - rbn 14y ago
    This is a good idea in my opinion. Lets say I'm having a party, launching a an app, selling something..ect. I think people would pay $1-$5 to use that feature.
InclinedPlane 14y ago
Unlike some I'm not convinced that facebook will fail. However, I think the risk that they will lose a lot of their userbase and/or they will fail to massively increase per user monetization over the next, say, 10 years is pretty high (maybe 50/50 as a SWAG). The advertising revenue risk is a big one, but there are bigger ones I think. First, we may be nearing the end of an era where monolithic social sites make sense. Social Graph as a Service and federated social networking just plain makes sense. I think the biggest risk to facebook isn't necessarily the one big competitor (like google) but a thousand tiny competitors who offer the same full suite of services as facebook but are more targeted toward a particular social niche. Second, as technology advances the ease with which someone can bootstrap a company that has 10 million, 100 million, or even a billion regular users drops dramatically. Right now supporting a billion users takes over a thousand employees and data centers around the world. How will that change in 5, 10, 15, and 20 years? In 2022 it might be possible for a site with the same usage load as facebook to be supported by a company with less than a hundred employees and other expenditures on the same scale as payroll. When, not if, that happens it'll open up facebook to a much greater degree of competition. It also fundamentally changes the game, because then you will have situations where "fad" sites rise up and then evaporate away in a matter of only a few years, months, or days and yet still have gigauser popularity at their peaks. Third, related to the other 2 points, social is just plain going to change, a lot, over the next several years. Anyone who thinks that the way social on the web works today should be set in stone and never changed is either clueless or evil. There is a lot that's missing and a lot that's broken today. Facebook has so much work to do just to be able to increase its monetization to a level that justifies their stock price, but they will also have a tremendous amount of work to do to fix and change social networking. If they do one and not the other they are doomed, but their competitors can get away with doing only one and they'll eat facebook's lunch. Either way, it'll be exciting to watch what happens.
- fredwilson 14y ago
  you nailed it inclined plane
damian2000 14y ago
For some reason the Facebook IPO reminds me of when Steve Case sold AOL to TimeWarner in 2000. From the AOL wikipedia page :- "AOL is best known for its online software suite, also called AOL, that allowed customers to access the world's largest "walled garden" online community and eventually reach out to the Internet as a whole." At the time it was held in high regard for getting such a massive online user base (around 34 million) - which is a bit paltry by today's standards.
- gerrit 14y ago
  AOL wasnt sold to Time Warner, it was the other way around (see http://en.wikipedia.org/wiki/Time_Warner#2000 http://en.wikipedia.org/wiki/Time_Warner#2000)
praptak 14y ago
A bit off on tangent - I believe the real potential for "the game changer" in advertising is in the following quote from the article: "If, for instance, frequent-flyer programs and travel destinations actually knew when you were thinking about planning a trip." Hey, if you create a medium where I can proactively request offers of particular kind, then I'm all yours. Provided I have control over what I request - I can set a time limit on a query, revoke it, etc.
sparknlaunch12 14y ago
People saw value in Facebook, otherwise they wouldn't have purchases shares last week. Yes, well overvalued but investors are willing to pay a premium for the associated and perceived value. 1) The main value is the sunk cost people have in Facebook. The vast majority of your family and friends are on the platform. You unwittingly have built up a scrap book of your past few years - photos, messages, relationships... 2) The other value is the time people spend on Facebook plus the large user base. You just need one or two mechanisms to extract revenue from this position and you are winning. There are plenty of risks, some may be: 1) The Government cracks down on privacy or advertising standards. 2) An alternative arrives that makes it easy to transfer your profile. You can always download your Facebook profile. 3) Suffers the MySpace factor. Facebook is left behind due to better and more exciting offerings. For now, Zuckerberg has shown his ability to compete. Until people stop spending hours on Facebook, they are very far from failure.
- loceng 14y ago
  Anyone buying Facebook at the IPO value are sheep and gamblers.
revorad 14y ago
I'm amused when intelligent people like Doc don't even show enough curiosity to hack Facebook ads to their own advantage. I hate ads with a vengeance, but I like using Facebook. And just like Doc, I kept seeing stupid irrelevant ads. So I decided to fix it. I started liking Facebook pages of things I really like - Arduino, Raspberry Pi, Ubuntu, Sphero, Android. And lo and behold, I've started seeing ads which I actually like and even click on. Facebook critics offer a strange bipolar argument - on the one hand, they say Facebook ads are so badly targeted even with the wealth of personal info they have. On the other hand, they question the valuation. Where's so much growth going to come from? Better ad targeting is definitely part of the answer, but more importantly, I think Facebook will come out with some killer new products in mobile and ecommerce.
eggywat 14y ago
Why do posters in Hacker News constantly confuse a disclaimer with disclosure.
ilaksh 14y ago
I don't know if Facebook is necessarily going to completely fail anytime soon, but he does have a lot of good points, like how bad the targeted ads are, and that the whole concept of targeted ads is not great. I think that Google is parsing gmail a lot more closely than we might be comfortable with, and I would not be surprised if an even more intelligent system eventually was applied to Facebook conversations and used to create targeted ads, with or without our consent. The idea of "intentcasting" what you want to buy at the advertisers and then having control over their responses is a great idea and something I would like to experiment with at some point if I have time. Within two or three decades, I think there are going to be major, major changes, not just with social networking, but with computing and even the overall nature of computing and even human society. Yes, we do want, should and shortly will have more control over our personal conversations and data etc., but it goes beyond that. I think that non-commercial distributed but at the same time more private content oriented networking will become a big thing within the next decade or so, and that network will be even more difficult for commercial interests to take advantage of. And it won't be hosted on a giant commercial centralized system. Beyond the private distributed social/content networks etc., you will see artificial general intelligence that blows Google's gmail parsing and everything else out of the water. I believe that personal data and conversations will generally be stored more privately and that people will voluntarily take advantage of these AIs (AGIs) to act as agents and assistants. I also think that these powerful artificial general intelligences are going to put the nail in the coffin for the current infinite growth consumer driven "economic" model, which will be replaced by a more sophisticated and humane descendant.
nns1212 14y ago
Facebook has a clear monetization model. If Facebook releases a product like AdSense - which shows content relevant ads as well as targeted ads will be a great blow to Google. Also, as far as mobile is concerned there are apps like Karma (http://getkarma.com http://getkarma.com) and TagTile that Facebook recently acquired - and they showed a great way to monetize using Facebook data. There are some many apps that have crossed millions of users just because of Facebook integration. Haters gonna hate but Facebook is here to stay for a long, long time.
dageshi 14y ago
It occurs to me that instead of being an advertising platform facebook would be better off as a marketplace platform for real goods. e.g. stop competing with google because you don't have intent and start competing with amazon and ebay because listing real products that people can instantly buy would be much more compelling. People don't like ads no matter what their content, everyone does like a bargain/deal on something they're interested in. Facebook knows what we're interested in, it can offer us deals on that stuff directly and it can immediately show off our purchases to all our friends and the deal that we got...
SagelyGuru 14y ago
Absolutely right. There is yet deeper issue that applies to all advertising, in the form of a simple natural law: There is a limit on the amount of BS a person can take before taking steps to actively avoid it or at least 'tuning it out'. Current business 'thinking' assumes that increasing advertising is always good. It does not acknowledge this saturation effect at the 'receiving end'. It essentially ignores the fact that everyone else will also advertise more and more, for diminishing returns. The trouble with advertising is that it is like a shouting match: occasionally someone with a strong voice will obtain a temporary advantage but in the long run nobody can be heard properly, least of all modest people with something useful to say. On a more prozaic level, dividing the FB valuation by its number of active users gives about $170. I doubt very much that an average active FB user is buying enough value from FB ads to justify this kind of advertising budget.
adventureful 14y ago
He leads with an extraordinarily false claim: "The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter" The value of Google's ad network, including the average cost per click, increased for 14 years in a row, roughly speaking. Google certainly isn't suffering from any supposed value decrease per quarter, and if that effect were actually in place, their business would be nearly worthless by now.
- JabavuAdams 14y ago
  Read the linked MIT article. There's a clear difference between Facebook-style display advertising, and Google-style search advertising. Google ads are much more profitable because people already have the intent to buy.
prof_hobart 14y ago
Whilst I agree with pretty much everything he says about Facebook and targeted ads, I'm surprised that the article makes no reference to Amazon - which is the one place that, at least for me, targeted advertising works brilliantly. There's a few reasons why it works for me - I'm going there to buy or at least thinkg about buying something, and when it comes to things like books, I like to browse for something interesting so being prompted to look at books that I might be interested in seems entirely appropriate - they are entirely open about why a particular product has been recommended to you, and you are able to pretty easily fine-tune those recommendations. - when I buy something from them, or even browse on their site, I'm not particularly shocked when they remember that next time I visit. They don't seem to be secretly collecting stuff behind the scenes, sniffing around what I did on a random 3rd party site etc. Facebook, and Google mostly (although they are at least slightly better off on the first point than FB) fail on all three of these. They are giving me messages about things that I'm not currently planning on doing, based partly on some secret info they've gathered from god knows where.
yaix 14y ago
>> Robert Scoble likes Orchard Supply Hardware That is not an ad for a hardware store, its an ad for Scoble. Just "like" as much stuff as you can, and people will constantly see your name and are reminded of you for free.
billybob 14y ago
I think Facebook will decline for a much simpler reason: whim. Facebook was cool when I was in college and it was only for college students. Now my dentist wants me to "like" him on Facebook and get entered in some kind of drawing. Lame. "I wonder if there's a social network that's only for cool people like me," thinks the user.
gallerytungsten 14y ago
Is Facebook going to be the next AOL, left in the dust by a new innovator? The chances of that happening are excellent, in my opinion. However, consider the following revenue streams Facebook could generate using a paid membership model: Facebook Personal - $10/year (no ads) Facebook Pro - $100/year (small business) Facebook Private $200/year (full privacy controls) Facebook Enterprise $500,000/year (enterprise social network built on top of Facebook) All of these ideas are plausible, and there are plenty more the readers of this site can surely come up with. All of them together could generate a billion dollars per year, or more. Of course, they depend on a shift in Facebook's culture, from privacy invasion and destruction; to actual privacy enhancement.
- ma2rten 14y ago
  I don't think this is a good idea: - Facebook Personal: If there would be a market for this why didn't they introduce this already? - Facebook Pro: What would they be getting for this money? Facebook is already selling branded pages to corporate partners for much more money. - Facebook Private: This would be openly admitting that people don't have full control over their privacy on Facebook already. Doesn't seem like a smart move to me. - Facebook Enterprise: This is a totally different market with different needs. There are already different strong competitors out there. Also, I don't know if Facebook is the best brand for this. It's more associated with distraction then productivity.
adamio 14y ago
Facebook will figure out the ad problem - and that's the problem. They're seemingly profitable now on ads (not 100B worth), and through innovation, testing, & learning revenue will grow or at least not disappear. Advertisers will understand how to use Facebook effectively as an advertising media. The major problem is lock-in. Facebook's users attract other users, which all attract advertisers. Once Facebook and advertisers uncover a breakthrough in effective social advertising, competition for users becomes critical. What will Facebook rely on to keep others from eating their lunch? Simplistic, but, Google has search and apps. Facebook has....reluctance to change? Which might just be enough, until its not.

367 points by angusgr 14y ago

Yes, they massed up the IPO, Facebook doesn't have a true value as Google or Apple, ads do not work and user growth is finished. I have doubts too that Facebook will match expectations but I am a sick of reading every other day why FB fails or what happens after they fail. I don't like Facebook either and stopped using it actively but I know for sure that Zuckerberg is a very smart and talented guy just looking at how he build this company, kept power the entire time and with 16B$ he'll find sooner or later a way how to get money from all those Facebook addicts.

Smerity 14y ago

He points out some of the terribly targeted ads that Facebook pushes on users. I think this is a huge issue that's not discussed enough. Facebook has all the data but no real targeting. This stems from two core issues: 1) they don't seem to use their immense datasets as effectively as Google does and most importantly 2) they rely on the advertisers to target their ads. Advertisers, even when handed the best demographic tools in the world, seem to get it horrifically wrong. This means people are exposed to bad advertising and learn to ignore it. This also means that advertisers will complain that Facebook doesn't give them the bang for the buck that they're after. Facebook don't mind however -- they still get their revenue. In the long run Facebook need to work out how to target ads. The longer they leave these horrible ads in place the more desensitized their userbase will become. They're poisoning their revenue stream by allowing any and all ads through, regardless of quality or accuracy in the target market.

alanfang 14y ago
Based off the ads the author cites in the article the issue is the lack of data, not poor targeting by advertisers. For example the author wouldn't see the "Boyfriend Wanted" ad if he listed himself as married in his Facebook profile (Facebook aggressively forbids dating ads targeted towards people who list themselves as married or in a relationship). All online advertising platforms rely on advertisers to target their ads. If this really is the issue, which I doubt, it applies to the entire advertising industry not just Facebook.
- Smerity 14y ago
  I can tell you my profile is full of information on me yet looking at the ads I see on Facebook right now: a) "Join the Army as a Truck Mechanic" (university graduate in IT...) b) "Study Marine Biology" c) "Cheap baby strollers" d) "Learn how to make money trading on the Forex market". These are just the most egregious examples -- most others are just for products and services I'm not particularly interested in. If it can't accurately target ads for me then I fear greatly for Facebook's business model... [If you want to see what information they have to target ads, feel free to check out http://www.facebook.com/smerity http://www.facebook.com/smerity -- next to all my details are public as I assume if it's on Facebook it's public]
- microtherion 14y ago
  I have always listed myself as married (even as public information), yet I see a dating ad on my sidebar. The two top ads were for high heel shoes. Either FB has me pegged as a two timing trannie, or their targeting is really poor.
  - greedo 14y ago
    This doesn't have to be a case of poor targeting by FB; it could be broadcast targeting by the advertiser who isn't as selective as we would expect. And for brand awareness advertising, I could see that it might be worth it, depending upon the cost. I have no intention of using eHarmony (happily married here), but I'm aware of them due to both online and offline advertising. If a coworker asks me about online dating, I'm sure I'll remember eHarmony. That brand awareness has obvious value to advertisers, and if the cost is in line with their budget, it explains the "mis-targeted" ads.
kposehn 14y ago
> Facebook has all the data but no real targeting In general, this is incorrect. What you see as poorly targeted ads are those where the advertiser does a poor job, not Facebook. The tools are there and the most successful advertisers use them.
- Smerity 14y ago
  I believe we're arguing the same point. Advertisers are the ones who do the targeting and even with the tools Facebook provides, they make terrible targeting decisions. It doesn't matter if good advertisers use it properly, the majority do not. If Facebook don't prevent these poorly targeted ads then they can't guarantee any level of targeting at all on their site. This means that users are desensitized to the ads shown there, decreasing their value as an adspace.
  - waterlesscloud 14y ago
    It's almost as if there's a business opportunity here.
glesica 14y ago
Based on all the anecdotes floating around, this one included, I wonder if part of the problem is that the demographic groups advertisers (that use Facebook) really seem to want to target are the most resistant to the ads. This would then lead advertisers to broaden their targeting to the point where Facebook's enormous trove of data is basically useless. Who cares if your ad is being shown to the exact 50,000 people on Facebook who are a perfect fit for your product if nearly all of them refuse to click on it? So you broaden your demographic selections, the ad goes out to 500,000 people now, but now your product has no relevance for the vast majority of the people seeing it. Not sure, just thinking "out loud".
lotharbot 14y ago
One of the major problems with FB ad targeting is that a lot of it is keyword-driven without regard for context. If I'm on Google searching for a product or service, the context is very likely "I want one of these" or "I'm curious about this", so displaying ads strictly by keyword works fairly well. But if I mention something on Facebook, it's as likely to be negative as positive. If I've just said something critical about a particular ideology, an ad for "date [ideology] singles" is as you say "horrifically wrong" (especially since I'm happily married.) Another contextual issue FB gets wrong is timing. Often I'm mentioning something I already own or something I've just completed. Telling me about a restaurant right after dinner, or tax software right after I finish my taxes, is not likely to be relevant to me (whereas if I type "restaurant" or "taxes" into Google it almost definitely is.) Sometimes it comes down to advertiser stupidity (forgetting to check if I'm married, for example.) But the fundamental problem is that judging intent is a hard problem for a computer. It's easy to write a filter that figures out what I'm interested in when I type a query into Google; it's hard to write one for a status update I type into Facebook.
- ryanmerket 14y ago
  Facebook advertising isn't keyword driven, it's interest driven. AFAIK Facebook doesn't parse your status updates to find keywords -- they look at what you have Liked.
  - taejo 14y ago
    They certainly do look for keywords in statuses (though I don't know if they use them for advertising). At one point they grouped statuses by subject ("Alice and Bob both mentioned Christmas"), and it suggests groups/pages based on your statuses (I mentioned reading something in French in a status, and it suggested I liked "French language").
    - ryanmerket 14y ago
      Yeah I was referring to advertising purposes. Even if they did use keywords in statuses for advertising I would imagine the the weight of those keywords verses the weight of a liked object would be significantly lower since the relevancy would be low.
gizzlon 14y ago
> He points out some of the terribly targeted ads that Facebook pushes on users.. So true.. Why don't I get ads like this: "It's almost lunch time, the weather is great and we kind-of know where you are. Here are 3 lunch places in the area with outdoor seating and a few available tables." Instead I get mostly dating sites and google-translated ads to "make money fast"
jacquesm 14y ago
The problem is much simpler than that. Facebook simply does not have enough advertisers to do a proper match-up between user and ad.

a3d6g2f7 14y ago

Original source: http://www.technologyreview.com/web/40437/ http://www.technologyreview.com/web/40437/

deleted 14y ago
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fleitz 14y ago

If internet advertising is a bubble that's going to pop they might as well retitle this article: After Google, Yahoo and most web properties fail. I guess all we're going to be left with is craigslist and basecamp, also there won't be any newspapers because they're dead because of the internet, and all their replacements are dead too because internet advertising doesn't work. (according to the OP)

waterlesscloud 14y ago
Cue someone responding "But Google targets intent." It's the same discussion, over and over and over.
- nl 14y ago
  10, even 5 years ago the same people who are now saying "Facebook ads are ineffective, and I never vist Facebook anyway" were saying "Google ads are ineffective, and I've never clicked on one anyway".
nextparadigms 14y ago
I think there's a Facebook Advertising bubble, not an Internet advertising one. I don't think Facebook ads have ever really worked, but most thought they did, which is why it's a bubble.
- deleted 14y ago
  [deleted]

hkmurakami 14y ago

Every time I read about how online targeted ads have poor returns for advertisers, I think to myself: "These advertisers know that the ads have low ROI because things are measureable online. How (in)effective would traditional advertisements prove to be, if they were as measurable as their online counterparts? How (in)effective would traditional advertisements prove to be, if they didn't interject themselves into the medium in such grotesque, user-experience destroying ways?"

brandnewlow 14y ago
Two points: 1. There are lots of digital ad tools that have great ROI. No one clicks on ads....until that one time they do. Critics of digital advertising like to hone in on anecdotal examples of online ads failing to support their points. This blog post is a great example of that. 2. Your second point is why Madison Avenue was so horrified by Google when they started selling ads. Tracking the performance of each individual ad was so scary they couldn't fathom it. Online ads are no worse than offline ads, we're just able to measure online ads in ways that we can't with offline.
- josephcooney 14y ago
  I agree, but I don't think things always have to be that way. I know a few people working on projects to improve the measurement capabilities for some kinds of off-line advertising.
  - brandnewlow 14y ago
    That's terrific. I suspect the folks selling those products will be hugely resistant at first.
- suking 14y ago
  Offline ads for direct response are easily measurable with tracking numbers. Branding ads - well - I have no clue how they track any of that - but then again how do you track a CPM media buy just designed to increase brand awareness online... (note: I come from the DM world).

BiWinning 14y ago

And what about when all TV is served over the internet? Or when all billboards are controlled over the internet? Or all magazines are displayed on epaper via the internet? 95% of advertising will be done over the internet, and if the author is too short-sighted to see that well then that speaks poorly on him. Of course if he had any insight maybe he'd be building something and not whining about it. He just sounds bitter because he's getting left in the dust.

deleted 14y ago
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pyoung 14y ago
Did you make it to the end of the post? He is working on a VRM system that supposedly puts the power in the hands of the customer, rather than the vendor.

ktizo 14y ago

I could see facebook being replaced by nothing more fancy than a web design app with a social webring gizmo.

psc 14y ago
Facebook's advantage over any competitor is that everyone is already on Facebook. I could see early adopters moving to what you're describing, but it would take ages to move the other 90% of the users over. So at least for the next few years, it's unlikely that people will transition en masse to a completely new service.
- ktizo 14y ago
  That was also Yahoo's advantage for a while. My point is that the underlying functionalities of Facebook are features of the web in general, not of Facebook specifically. Facebook made them simple to use and put them all in one place and now has grabbed an impressive amount of share as a result, but they are not on the most solid of ground, as their social functionality could easily be swallowed by the browser itself, or by a clever lump of javascript. And remember, the inline advertising is only required by their business model, not by the functionality of the service itself. [edit] That said, I sort of agree with you that they probably have a few years before the mass exodus, I wouldn't give them a lot more than that however.
- dredmorbius 14y ago
  "Everybody" is already in a lot of places. They're on FB. They're also on Google. A hell of a lot of them are still on Yahoo mail. They're using Craigslist. And eBay. And Amazon. And The New York Times and/or Fox. Hulu. Whatever Apple's calling its offerings these days. Even Microsoft. To say nothing of a bunch of B2B service sites that have large user lists (ADT, Delta Dental, Beico, etc.). There are a bunch of sites that have a very large userbase. Large enough at least to get past the network effects problem sufficiently to start boostrapping social onto things if they want to do so. Which is one of the reasons that network effects, in and of themselves, offer such transient advantages. You may be able to corner the network effect in one area for a time, but you're not going to conrner all network effects in all areas, leaving you vulnerable to intrusion and erosion. Several of the players listed above have a vastly better advertising or direct revenue capacity (Google, Apple/iTunes, eBay, Craigslist, and most of all in my mind, Amazon). Craigslist is a wonderful example of a site that leave huge amounts of potential revenue behind (charging for only a small fraction of jobs and housing listings) to create a hugely compelling advantage in the classified advertising market, and supporting some "social" features (there is a pretty active, if not grossly overwhelming, forums section). Amazon also has discussion. Google has entered directly into the frey. The direct problem of social networking is one of coupling a modicum of engineering talent to a financing capacity and and existing network. I've said it before and I'll say it again: social is mostly a way of tying notices and feeds to specific users, and there's absolutely no inherent reason why it needs to be based on a centralized application model. Diaspora is already a community-based project, and may be heading toward a decentralized hosting model. Once that happens, IMO, the jig is up. Not because Diaspora will instantly subvert Facebook, but because all the 2nd-tier social networks will have the option of joining FB (or whomever leads the siloed SN space at the time), ceding significant power and control to them, or of playing in the open space. It's the same strategy that's lead Linux to subvert all other operating systems on the server, embedded, and handheld/mobile markets (less successfully still in desktop/laptop). Sun, IBM, HP, LG, Samsung, HTC, Motorola, Google, Amazon, B&N, etc., couldn't take on Microsoft directly with their own OS offerings, but they could join forces by agreeing on an open standard which offered none of them a proprietary advantage of itself, but allowed them to exercise other business strengths to benefit (and yes, Apple's been doing quite well with an alternative strategy, though also based on an open UNIX base). So yes, I'm bearish on Facebook.

waterlesscloud 14y ago

There's actually some interesting stats regarding how much FB gets per user in the US vs other regions. It's much higher in the US, which does indicate growth potential in other areas. http://techcrunch.com/2012/05/03/stats-facebook-made-9-51-in-ad-revenue-per-user-last-year-in-the-u-s-and-canada/ http://techcrunch.com/2012/05/03/stats-facebook-made-9-51-in...

a3d6g2f7 14y ago

FB has bought itself some more time with this IPO. How much time does $15BB buy? Even if advertising executives and industry analysts give up on FB, FB stil has the cash to sit and wait for their muse to appear (like Google's discovery of ad feeds in search). Given that FB no matter what they do, no matter how much they fail to perform, is now subsidized with $15BB, will they drive the ad market down?

polemic 14y ago

I have no idea if Facebook is valued correctly or not, however I think this misses a vital point. Facebook is not nearly the same as other web ventures. It's ability to target ads seems secondary to this: From http://www.kenburbary.com/2011/03/facebook-demographics-revisited-2011-statistics-2/ http://www.kenburbary.com/2011/03/facebook-demographics-revi..., slightly out of date, but still useful: - Average user visits the site 40 times per month - Average user spends an 23 minutes (23:20 to be precise) on each visit - Global users 629,982,480 (I believe this has passed 800 million now) So, on average hundreds of millions of people are spending about 1/2 an hour looking at Facebook.com every day. As much as their ability to target ads is hyped (or derided), does it really matter? Isn't targeting just a way to charge a premium, or drive click-thru on massive volume? Facebook isn't competing with other websites for online advertising. It's competing with the entire entertainment sector for all advertising, everywhere. That isn't going to change soon.

glesica 14y ago
Keep in mind that all those page views and all that time spent on the site costs Facebook money. It's not like outdoor advertising where the cost is set up front (then amortized over the life of the sign, device or property lease) and the marginal cost for additional viewers is zero. Another thing to keep in mind is that there are competitors constantly targeting Facebook. But not just targeting them on price, targeting the features of their site that keep people there for 30 minutes every day. This means that Facebook has to spend money to "improve". Again, compare this to outdoor advertising where the competition is largely just a matter of bidding on space every so often. I, like you, have no idea what Facebook is worth or how successful their business model will turn out to be. However, I think it's important to keep in mind that turning page views (or minutes spent on the site, whatever) into money really isn't a fully solved problem, at least not in the general case. Facebook definitely has their work cut out for them I think.
- joe_the_user 14y ago
  Excellent point Also, keep in mind that Facebook has attracted some section of the "best and the brightest". As far as I can tell, they do a really, really good keeping Facebook ahead of the curse; fun and ahead of potential competitors. The thing is that since these people are the best, one might logically expect that they want compensation in some form, possibly only the form of knowing they're working on the leading edge or possibly in the form of lots of money. So Facebook's ongoing operations to an extent depend on project projections coming true. If they become like Yahoo, they'll bleed people like Yahoo and make horrible missteps like the way Yahoo rolled-out Axis (an idea that appeals to me but which was apparently utterly fumbled).

raintrees 14y ago

Interesting... I was just going through the phase of unsubscribing from all of the legitimate info/news sources I had subscribed to over the years to try to reduce my daily Inbox levels, and it got me to thinking about reversing the tables so I could announce when I _wanted_ to partake and for what reason, and THEN get appropriate emails, links, ads, etc.

redwood 14y ago
Right on, is there a platform for this yet? Perhaps fbook can pivot to this... since it'd be tough without a big user base first. This only works for non demand-creating advertising of course.
- redwood 14y ago
  (edit "raintree" would be a great name for such a service!!! --- hint hint, go for it!)

jayzee 14y ago

Isn't this the same Michael Wolf that Loeb, the activist hedge fund manager, picked for Yahoo's board? If this is how he feels about businesses driven by online ads I wonder what he thinks of Yahoo's odds.

malachismith 14y ago

It's sad when old people get bitter about change

mcantelon 14y ago

I didn't get through the whole post as it's kind of disjointed and meandering, but its initial assertions seem shaky. Personalized ads do have business value. After looking at some videos about Native Instruments audio gear on YouTube, I started getting a lot of Native Instruments ads pretty quickly. Unlike television, I am being shown ads for something I might actually buy rather than ads for things I will never buy. If traditional advertising is effective, then I don't see how this more targeted advertising can't be more effective. As for "uncanny valley", what's "icky" now won't be icky in 10 years. You can get used to anything and kids growing up with the "uncanny" will quickly see it as normal, whether this is a good thing or not.

pyoung 14y ago
The practices of the marketing and advertising industry have a history of being received negatively, only to be reluctantly and slowly accepted as a normal part of everyday life. I am currently reading an old economics books (org. published 1958) that rails against the industry for creating unwarranted demand for non-essential products, and argues that it is a root cause of economic volatility. Of course, by today's standards, the industry practices of 1958 would seem tame.
tatsuke95 14y ago
>"After looking at some videos about Native Instruments audio gear on YouTube, I started getting a lot of Native Instruments ads pretty quickly." So, you sought out the product first, then received ads? I think that's the point. What does this accomplish from a brand awareness point of view? You have already made it clear you're interested.
- mcantelon 14y ago
  >So, you sought out the product first, then received ads? I think that's the point. What does this accomplish from a brand awareness point of view? You have already made it clear you're interested. A traditional sales technique is to retain a list of potential leads and call them every once and awhile to see if the lead is interested in converting into a sale. This technique exists because it works and the purpose of the targeted advertising is similar. Keep me reminded of the product and at some point I might be inclined to buy.

jriediger 14y ago

I think a lot of the analyses of Facebook's advertising model miss one important point. Sure, their CTRs are not even closely comparable to Google's numbers. However, when people search on Google, they're often actively looking for certain products that lead to high CTRs on these targeted ads. In Facebook's case, people want to socialize and generally don't want to be disturbed by ads. Basically, Facebook currently uses an advertisement model that is not very natural to its product (and not very well targeted for a number of reasons). But Facebook just doesn't care at this point, because they still generate sufficient revenue through the sheer number of users. So the real question is whether Facebook can come up with an advertising model that is truly natural to its product (e.g. actual product recommendations by friends in conversations etc.). To conclude that Facebook is doomed to fail because their advertising model is suboptimal seems to be a little premature.

dr_ 14y ago

First of all, it's not clear that social media advertising is going to fail, just because the author is not happy with results he gets. It was announced today that Oracle purchased Vitrue http://techcrunch.com/2012/05/23/more/ http://techcrunch.com/2012/05/23/more/ a company with close to 100 million a year in revenues. Presumably, for many people, it works. Secondly, the title of the article is After Facebook fails - which implies it will fail and will do so because it's advertising model will fail - but who says facebook primary business model has to be advertising? If they continue to grow to over a billion users - who says that the "like" button on sites all over the web now shouldn't be charged for? who says users shouldn't be charged for premium services? more photo filters on instagram - just pay! the possibilities are endless, and advertising, for now, is just one of them. my gut says it will become less and less important as a revenue generator over time. and personally I will welcome that change, cause with all the ads adjacent to the chat bar, the site is looking pretty messy.

clarky07 14y ago

If he put that he was married on the site, he wouldn't get the dating ads. I just checked my facebook (for the first time in awhile) and 3 of 4 ads where things that made sense and were interesting to me. I personally don't think Facebook is worth nearly as much as their current valuation, but as long as they have 900 million users who average a 1/2 hour a day on the site they are worth quite a bit. As for the targeted ads, I'd much rather have ads for things that are interesting to me than for things that aren't.

cletus 14y ago

Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has information to figure out what your interests are and so on. A common misconception from fearmongers is that your data is being sold. It is not. Advertisers are paying to have their creative put in front of a particular audience. The most important strategic move Facebook made in the last few years (IMHO) is the Like button. Whether or not you "Like" things is irrelevant. The main purpose of that "Like" button is (IMHO) as a tracking cookie. Visit any Like-enabled site and you see a small piece of content from Facebook that tells Facebook all the sites you visit. It's a tracking cookie like any other and personally I have no problem with that. Just make no mistake why the Like button exists. Facebook also has a wealth of information in terms of who your friends are, what your interests are, your relationship status and so on. It's this alleged treasure trove that people point to as the real value of Facebook (combined with the network effect). I disagree. I think that information is largely useless for a number of reasons: 1. Because of social games and the like who your friends are on Facebook loses a lot of meaning. In the very least Facebook has to filter that information and determine who your real friends are (which it probably does anyway for News Feed filtering and so on); 2. Where people go and what people do is far more accurate than what people will tell you about themselves. As House says--or used to say--"people lie". When you ask someone their interests or opinions it will pass through various filters of what that person thinks you want to hear, what they want the world to believe, what they themselves wish they were and so on. It's a distortion. It's a bit like dating or job hunting. You look at any online profile or CV and you'll see lies, distortions, omissions and so on. As Chris Rock said, for the first 6 months you're not dating them, you're dating their representative. Facebook has no search engine. Whatever you say about the size of display ads, search advertising is still far bigger. With search you have intent. People want to find things by their actions. On Facebook ads are an annoyance. It's the difference between wandering the streets shouting "does anybody want ice cream?" versus putting an ad in front of a bunch of people who have already told you that they're looking for ice cream. Their mobile presence is at the behest of Apple, Google and (arguably) Microsoft. Mobile (IMHO) poses an existential risk to Facebook, which in part explains the exorbitant price tag paid for Instagram (it has nothing to do with any alleged "bubble"). Much of the engagement on Facebook is because of games. Those games are increasingly going mobile. This is bad for Facebook. At $100B IPO valuation that put Facebook being worth half of Google with 5-8% of the revenue and significant strategic risks. Of course it was overvalued. It's still valuable but it will take some time to figure out exactly how much it's worth.

aresant 14y ago

This essay reads like an advanced lifeform encountering, and misunderstanding, the average human consumer. Two quotes stick out: (1) That he goes "on Facebook. . . as infrequently as I possibly can." This statement disqualifies his entire experience. Hundreds of millions of average-consumers use Facebook DAILY. These users update their content, they integrate more of their life. They click the like buttons. They share. This in turn creates more specific opportunities for advertisers to target more relevant ads vs. the junk broad market ads he uses as examples of their failure (credit cards, dating, classmates known to be JUNK-CPM offers that work everywhere). (2) That his perfect model is inclusive of "Vendor Relationship Management" that lets people manage their vendors, vs the vendors managing the people. I might use VRM along with my HN brethren but average consumers won't adopt VRM because it requires them to choose. Advertising works because people prefer to be told what to do. This article fits nicely into the "FB is destined to fail" cannon, but I find the author to be grossly misinformed by his own experiences.

pyoung 14y ago
I would argue that VRM already exists to some extent. When I want to buy something, I Google it. You can instantly comparison shop and add items to a shopping list to keep an eye on the price over time. You might not directly negotiate with vendor's, but I am not sure most people really want to or need to, including HN'ers.
PakG1 14y ago
Grossly misinformed is perhaps a bit much. I don't think a guy like Doc Searls is so out of touch to not know what the general populace is doing. He contributed to The Cluetrain Manifesto, he's a well-respected writer. http://en.wikipedia.org/wiki/Doc_Searls http://en.wikipedia.org/wiki/Doc_Searls I think making statements like what you quote in (1), he's making a bet: I understand what people are really truly like, and this stuff will prove to be just a fad; eventually, people will realize I'm right. He predicts online social networks as we know them to decline in 2013. If he's right, then it doesn't matter what Facebook users are doing today, even if they are using it daily. There was a time when MySpace and Friendster were the top social networks on the Internet too. Facebook just out-executed them. The interesting question is if Facebook had not been around, would MySpace or Friendster still have been around in 10 years anyway? Or would it have been proven to be too faddish after the activity level reached a certain boiling point?

foxylad 14y ago

Marketing used to be about information, letting potential customers know your product exists. Then it morphed into manipulation, but I think that has run it's course - even young children now know when they are being manipulated, and are resistant to it. Because of this, my company concentrates entirely on providing remarkable services for remarkable prices, so our customers do our marketing for us by telling other potential customers. In our experience, this strategy works magnificently - we're doubling our revenue every year without spending a cent on marketing. Back to Facebook - I see Google ads as informational marketing, and Facebook's as manipulative marketing. And currently Facebook is horribly bad at it - I think I've "liked" two products ever, because I think most of my "friends" would think I was really lame for endorsing anything that isn't truly exceptional. Having said that, our services have thousands of likes...

alanh 14y ago

Wow, that header really reminds me of the circa-2006 Facebook design, with “the facebook guy” in the top left. Screenshot here: http://joshvandervies.com/is-the-old-facebook-better-2/ http://joshvandervies.com/is-the-old-facebook-better-2/

melvinmt 14y ago

One thing I've noticed while reading the article is that my banner blindness is so strong, that I even had to force myself to look at the image full of ads being discussed in the article. I guess the author has a point.

soup10 14y ago

I have a crazy idea, why doesn't Facebook charge for premium accounts? They would really only need to get what? Maybe 10% of their users to sign up to some kind of premium subscription service to justify their valuation. It's funny how this option is rarely ever mentioned, as if selling a service to consumers is some kind of taboo for internet companies.

pyoung 14y ago
It's been mentioned plenty of times (at least in discussion forums). Also Facebook has been experimenting with sponsored posts in NZ, where people pay to have their status posts featured more prominently in peoples news feeds, which is essentially a 'pay for premium' service. From what I understand, it's not going too well.
- rbn 14y ago
  This is a good idea in my opinion. Lets say I'm having a party, launching a an app, selling something..ect. I think people would pay $1-$5 to use that feature.

InclinedPlane 14y ago

Unlike some I'm not convinced that facebook will fail. However, I think the risk that they will lose a lot of their userbase and/or they will fail to massively increase per user monetization over the next, say, 10 years is pretty high (maybe 50/50 as a SWAG). The advertising revenue risk is a big one, but there are bigger ones I think. First, we may be nearing the end of an era where monolithic social sites make sense. Social Graph as a Service and federated social networking just plain makes sense. I think the biggest risk to facebook isn't necessarily the one big competitor (like google) but a thousand tiny competitors who offer the same full suite of services as facebook but are more targeted toward a particular social niche. Second, as technology advances the ease with which someone can bootstrap a company that has 10 million, 100 million, or even a billion regular users drops dramatically. Right now supporting a billion users takes over a thousand employees and data centers around the world. How will that change in 5, 10, 15, and 20 years? In 2022 it might be possible for a site with the same usage load as facebook to be supported by a company with less than a hundred employees and other expenditures on the same scale as payroll. When, not if, that happens it'll open up facebook to a much greater degree of competition. It also fundamentally changes the game, because then you will have situations where "fad" sites rise up and then evaporate away in a matter of only a few years, months, or days and yet still have gigauser popularity at their peaks. Third, related to the other 2 points, social is just plain going to change, a lot, over the next several years. Anyone who thinks that the way social on the web works today should be set in stone and never changed is either clueless or evil. There is a lot that's missing and a lot that's broken today. Facebook has so much work to do just to be able to increase its monetization to a level that justifies their stock price, but they will also have a tremendous amount of work to do to fix and change social networking. If they do one and not the other they are doomed, but their competitors can get away with doing only one and they'll eat facebook's lunch. Either way, it'll be exciting to watch what happens.

fredwilson 14y ago
you nailed it inclined plane

damian2000 14y ago

For some reason the Facebook IPO reminds me of when Steve Case sold AOL to TimeWarner in 2000. From the AOL wikipedia page :- "AOL is best known for its online software suite, also called AOL, that allowed customers to access the world's largest "walled garden" online community and eventually reach out to the Internet as a whole." At the time it was held in high regard for getting such a massive online user base (around 34 million) - which is a bit paltry by today's standards.

gerrit 14y ago
AOL wasnt sold to Time Warner, it was the other way around (see http://en.wikipedia.org/wiki/Time_Warner#2000 http://en.wikipedia.org/wiki/Time_Warner#2000)

praptak 14y ago

A bit off on tangent - I believe the real potential for "the game changer" in advertising is in the following quote from the article: "If, for instance, frequent-flyer programs and travel destinations actually knew when you were thinking about planning a trip." Hey, if you create a medium where I can proactively request offers of particular kind, then I'm all yours. Provided I have control over what I request - I can set a time limit on a query, revoke it, etc.

sparknlaunch12 14y ago

People saw value in Facebook, otherwise they wouldn't have purchases shares last week. Yes, well overvalued but investors are willing to pay a premium for the associated and perceived value. 1) The main value is the sunk cost people have in Facebook. The vast majority of your family and friends are on the platform. You unwittingly have built up a scrap book of your past few years - photos, messages, relationships... 2) The other value is the time people spend on Facebook plus the large user base. You just need one or two mechanisms to extract revenue from this position and you are winning. There are plenty of risks, some may be: 1) The Government cracks down on privacy or advertising standards. 2) An alternative arrives that makes it easy to transfer your profile. You can always download your Facebook profile. 3) Suffers the MySpace factor. Facebook is left behind due to better and more exciting offerings. For now, Zuckerberg has shown his ability to compete. Until people stop spending hours on Facebook, they are very far from failure.

loceng 14y ago
Anyone buying Facebook at the IPO value are sheep and gamblers.

revorad 14y ago

I'm amused when intelligent people like Doc don't even show enough curiosity to hack Facebook ads to their own advantage. I hate ads with a vengeance, but I like using Facebook. And just like Doc, I kept seeing stupid irrelevant ads. So I decided to fix it. I started liking Facebook pages of things I really like - Arduino, Raspberry Pi, Ubuntu, Sphero, Android. And lo and behold, I've started seeing ads which I actually like and even click on. Facebook critics offer a strange bipolar argument - on the one hand, they say Facebook ads are so badly targeted even with the wealth of personal info they have. On the other hand, they question the valuation. Where's so much growth going to come from? Better ad targeting is definitely part of the answer, but more importantly, I think Facebook will come out with some killer new products in mobile and ecommerce.

eggywat 14y ago

Why do posters in Hacker News constantly confuse a disclaimer with disclosure.

ilaksh 14y ago

I don't know if Facebook is necessarily going to completely fail anytime soon, but he does have a lot of good points, like how bad the targeted ads are, and that the whole concept of targeted ads is not great. I think that Google is parsing gmail a lot more closely than we might be comfortable with, and I would not be surprised if an even more intelligent system eventually was applied to Facebook conversations and used to create targeted ads, with or without our consent. The idea of "intentcasting" what you want to buy at the advertisers and then having control over their responses is a great idea and something I would like to experiment with at some point if I have time. Within two or three decades, I think there are going to be major, major changes, not just with social networking, but with computing and even the overall nature of computing and even human society. Yes, we do want, should and shortly will have more control over our personal conversations and data etc., but it goes beyond that. I think that non-commercial distributed but at the same time more private content oriented networking will become a big thing within the next decade or so, and that network will be even more difficult for commercial interests to take advantage of. And it won't be hosted on a giant commercial centralized system. Beyond the private distributed social/content networks etc., you will see artificial general intelligence that blows Google's gmail parsing and everything else out of the water. I believe that personal data and conversations will generally be stored more privately and that people will voluntarily take advantage of these AIs (AGIs) to act as agents and assistants. I also think that these powerful artificial general intelligences are going to put the nail in the coffin for the current infinite growth consumer driven "economic" model, which will be replaced by a more sophisticated and humane descendant.

nns1212 14y ago

Facebook has a clear monetization model. If Facebook releases a product like AdSense - which shows content relevant ads as well as targeted ads will be a great blow to Google. Also, as far as mobile is concerned there are apps like Karma (http://getkarma.com http://getkarma.com) and TagTile that Facebook recently acquired - and they showed a great way to monetize using Facebook data. There are some many apps that have crossed millions of users just because of Facebook integration. Haters gonna hate but Facebook is here to stay for a long, long time.

dageshi 14y ago

It occurs to me that instead of being an advertising platform facebook would be better off as a marketplace platform for real goods. e.g. stop competing with google because you don't have intent and start competing with amazon and ebay because listing real products that people can instantly buy would be much more compelling. People don't like ads no matter what their content, everyone does like a bargain/deal on something they're interested in. Facebook knows what we're interested in, it can offer us deals on that stuff directly and it can immediately show off our purchases to all our friends and the deal that we got...

SagelyGuru 14y ago

Absolutely right. There is yet deeper issue that applies to all advertising, in the form of a simple natural law: There is a limit on the amount of BS a person can take before taking steps to actively avoid it or at least 'tuning it out'. Current business 'thinking' assumes that increasing advertising is always good. It does not acknowledge this saturation effect at the 'receiving end'. It essentially ignores the fact that everyone else will also advertise more and more, for diminishing returns. The trouble with advertising is that it is like a shouting match: occasionally someone with a strong voice will obtain a temporary advantage but in the long run nobody can be heard properly, least of all modest people with something useful to say. On a more prozaic level, dividing the FB valuation by its number of active users gives about $170. I doubt very much that an average active FB user is buying enough value from FB ads to justify this kind of advertising budget.

adventureful 14y ago

He leads with an extraordinarily false claim: "The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter" The value of Google's ad network, including the average cost per click, increased for 14 years in a row, roughly speaking. Google certainly isn't suffering from any supposed value decrease per quarter, and if that effect were actually in place, their business would be nearly worthless by now.

JabavuAdams 14y ago
Read the linked MIT article. There's a clear difference between Facebook-style display advertising, and Google-style search advertising. Google ads are much more profitable because people already have the intent to buy.

prof_hobart 14y ago

Whilst I agree with pretty much everything he says about Facebook and targeted ads, I'm surprised that the article makes no reference to Amazon - which is the one place that, at least for me, targeted advertising works brilliantly. There's a few reasons why it works for me - I'm going there to buy or at least thinkg about buying something, and when it comes to things like books, I like to browse for something interesting so being prompted to look at books that I might be interested in seems entirely appropriate - they are entirely open about why a particular product has been recommended to you, and you are able to pretty easily fine-tune those recommendations. - when I buy something from them, or even browse on their site, I'm not particularly shocked when they remember that next time I visit. They don't seem to be secretly collecting stuff behind the scenes, sniffing around what I did on a random 3rd party site etc. Facebook, and Google mostly (although they are at least slightly better off on the first point than FB) fail on all three of these. They are giving me messages about things that I'm not currently planning on doing, based partly on some secret info they've gathered from god knows where.

yaix 14y ago

>> Robert Scoble likes Orchard Supply Hardware That is not an ad for a hardware store, its an ad for Scoble. Just "like" as much stuff as you can, and people will constantly see your name and are reminded of you for free.

billybob 14y ago

I think Facebook will decline for a much simpler reason: whim. Facebook was cool when I was in college and it was only for college students. Now my dentist wants me to "like" him on Facebook and get entered in some kind of drawing. Lame. "I wonder if there's a social network that's only for cool people like me," thinks the user.

gallerytungsten 14y ago

Is Facebook going to be the next AOL, left in the dust by a new innovator? The chances of that happening are excellent, in my opinion. However, consider the following revenue streams Facebook could generate using a paid membership model: Facebook Personal - $10/year (no ads) Facebook Pro - $100/year (small business) Facebook Private $200/year (full privacy controls) Facebook Enterprise $500,000/year (enterprise social network built on top of Facebook) All of these ideas are plausible, and there are plenty more the readers of this site can surely come up with. All of them together could generate a billion dollars per year, or more. Of course, they depend on a shift in Facebook's culture, from privacy invasion and destruction; to actual privacy enhancement.

ma2rten 14y ago
I don't think this is a good idea: - Facebook Personal: If there would be a market for this why didn't they introduce this already? - Facebook Pro: What would they be getting for this money? Facebook is already selling branded pages to corporate partners for much more money. - Facebook Private: This would be openly admitting that people don't have full control over their privacy on Facebook already. Doesn't seem like a smart move to me. - Facebook Enterprise: This is a totally different market with different needs. There are already different strong competitors out there. Also, I don't know if Facebook is the best brand for this. It's more associated with distraction then productivity.

adamio 14y ago

Facebook will figure out the ad problem - and that's the problem. They're seemingly profitable now on ads (not 100B worth), and through innovation, testing, & learning revenue will grow or at least not disappear. Advertisers will understand how to use Facebook effectively as an advertising media. The major problem is lock-in. Facebook's users attract other users, which all attract advertisers. Once Facebook and advertisers uncover a breakthrough in effective social advertising, competition for users becomes critical. What will Facebook rely on to keep others from eating their lunch? Simplistic, but, Google has search and apps. Facebook has....reluctance to change? Which might just be enough, until its not.