I thought it was an exciting announcement as I have written a lot about how to make social networking profitable by turning communities into economies.

Julie describes how Ning’s 1.6 million social networks can now start making money by selling virtual gifts. The net revenue(after Paypal fees) from the gifts is split between Ning and the social network.

Ning’s virtual currency called credits, converts into US funds at a rate of approximately 1 credit to $.02. To help get users started with virtual gifting, Ning will give 100 complimentary credits to all users. All Ning virtual gifts will be priced at 75 credits each, so Ning hopes that each user will get to send one virtual gift as a way to try out the feature.

I hope Ning finds more ways to extend how social networks can use the currency to pay users to take surveys or other actions that will help the networks make some real money.

Here’s the interview with Julie:

The site has been quite successful recruiting members and now has 2 million users.

Tom and I had a great conversation about Gather and what they are doing to make the site a success.  I was especially intrigued by their use of social campaigns as a way to monetize the social network.  In these campaigns, users are recruited to try products and then write about them.  Tom describes how that leads other people in the network to also get involved, try the product and write about it.  It’s an interesting idea that looks like it could be adopted by other people who have built communities.

This is an example of one more great way to turn a community into an economy.

Let us know what you think.

I spent a few minutes making an example Mego widget.  It was a pretty easy four step process.

Here’s the result:

You can make your own at Mego.com

Imagine if you and your friends could star in a music video, famous movie clip, or commercial as realistically as if you were around for the shoot. Jonathan describes the company and the potential that its technology has to transform advertising and the audience relationship with movies, television and videogames.

In the interview, Jonathan describes his early start as a wunderkind discovered by SoCal VCs (0:00), his insight into the coming importance of personalization as he discovered the technology behind Big Stage (2:45), and how he helped move the technology to become consumer internet capable and fundable (7:05).

He talks about the current business, his monetization model through brands and content partners based on the technology’s dramatic impact on advertising effectiveness (11:35), and what the big media networks are seeing in terms of monetization and CPM rates (16:12). He also describes privacy considerations (17:40) and the other cool non-advertising stuff, like videogaming and short internet adventures, that Big Stage will be making possible (19:05).

Jonathan Strietzel is co-founder and chief creative officer of Big Stage. He brings 10 years of experience as an entrepreneur in the entertainment and technology industries, including founding Stritz Studios, a boutique special effects studio. He has also invented multiple systems for delivering digital advertising and currently holds a U.S. patent for his work in particle-based advertising. In addition, Jonathan has worked with numerous TV studios and Fortune 500 companies, including developing the highly publicized online clue delivery system for NBC’s “Treasure Hunters.” Jonathan graduated from Chapman University with a Bachelor of Science degree.

[tags]Digital Hollywood, Big Stage, Jonathan Strietzel, Virtual Reality, Avatar, 3D[/tags]

He says that Yahoo has been open for a long time. They have lots of open API’s. Flickr is the second largest of these.

He wants to take “open” to a whole new place. He wants to open up all the assets to developers. They want to open up the social network that is Yahoo. It sounds like they have been learning from Facebook and OpenSocial. They seem to recognize that they have the ability to be the worlds largest social platform if they can get this right.

He announced the opening of the beta for search monkey. He says that Yahoo’s open strategy is not just about opening up the search page, but opening up all the aspects of Yahoo.

They will have an application platform and a social platform. They are going to unify profiles across Yahoo go make social possible. The third element is to re-wire all the properties of Yahoo so that there is a consistent API across the different experiences.

They want to rewire the entire Yahoo experience to be social. They don’t view social as a destination. He provides an example of social being used to highlight mail in email system, highlight what’s important to friends in My Yahoo or on the sports page.

Y! OS (open strategy)

• Rewiring Yahoo
• Open Yahoo to developers like never before
• Making Yahoo more social
• Making Yahoo portable.

Search Monkey now, much more later this year. The overall process will unfold over time. Look for releases over this year and next.

UPDATE: Here’s the video of the presentation:

[tags]Yahoo, Open Strategy, Web20Expo[/tags]

In this podcast, we interview Murtaza Hussain, CEO of Peanut Labs. Our focus is on making money in social networks by understanding the opportunity to turn a community into an economy.

Before we dive into the interview, it’s worth explaining why this is an issue.

Facebook and MySpace have grown very large as social networking sites and white label services like Ning have also grown very popular. These sites have lots of users and lots of page views, but how to make social networking sites profitable is still an open question.

There has been a lot of activity trying to make advertising work on these sites, but despite the ability to segment and target effectively, CPM (the price paid per 1,000 impressions) and click through rates remain low. My experience has been that Google Adwords have been 100 times more effective in terms of click through rate as compared to the same ads on Facebook. (Note: I would be interested to hear other people’s experience on this issue. If you’ve tried both leave a comment.)

So how can social networking sites make money? I posted a theory a little while ago that argued that organizations need to get beyond impression based economics and move to community based economics. And what are the economics of communities? They are micro-economies where trade, commerce and personal interaction are all intermingled with each other. I pointed to an example of Second Life where this is really happening.

While I was at the Graphing Social conference a few weeks ago, I hear Murtaza speak on a panel about monetizing applications. He mentioned that he thought virtual currencies were an effective way to monetize social networks.

I wanted to know more. Andrew and I caught up with Murtaza late last week and interviewed him for Digital Podcast 45.

Murtaza has a background in social networking. He co-founded XuQa.com, a leading online casual gaming community, which was built to 2M+ users and profitability. His experience with making money on XuQa led him to co-found Peanut Labs.

The core insight he got from XuQa was that they could turn the community into an economy by introducing a virtual currency into the community. In XuQa’s case, the currency is virtual Peanuts. The more Peanuts you have the more stature you have in the community. Peanuts can also be used to play games and buy virtual gifts. To monetize the currency, Murtaza turned to online survey’s. If users take a survey, they get paid in Peanuts. XuQa in turn gets paid in real money. The net result is an exchange rate that puts real value on XuQa’s Peanut currency.

Murtaza has taken the idea and founded Peanut Labs to act as market maker for matching market research needs with with Facebook applications and others who have created virtual currency that can be used to compensate users for taking surveys.

Here’s an example taken from a Peanut Labs PDF of how it works:

1. A Gen Y Facebook user visits a favorite application, (fluff) Friends, which allows users to add, “care for” and “feed” a virtual pet as part of their Facebook profile. Facebook users trade “Munny” – Facebook’s virtual currency – for gifts and “pet food.”
2. (fluff)Friends promotes Peanut Labs’ surveys as a fun network activity. Promotion respondents complete a pre-survey profile questionnaire as a prerequisite to taking surveys.
3. (fluff)Friends survey participants who meet qualification criteria received highly targeted survey invitations, which additionally include qualifying questions that further enhance targeting. Upon completing the survey, they are paid with Facebook “Munny,” which can be “spent” on (fluff)Friends or other Facebook applications, for more social network fun.
4. The research firm receives real-time respondent data, often within hours of survey launch.

This is how to turn a community into a virtual economy that can make real money. I wonder when Facebook and MySpace will figure it out.

If you have questions or thoughts about how you can turn your online presence into a virtual economy leave a comment.

Click here follow me on Twitter at http://twitter.com/alexnesbitt

[tags]Peanut Labs, Murtaza Hussain, social networking, community based economics, virtual currency, virtual economy[/tags]

If you’re a podcaster and want a social network for your fan club it’s worth checking out. You can see a great example of Ning being used by Ask a Ninja to support it’s fan club. It’s a pretty easy to use service and provides a lot of functionality.

Marc provides some very interesting statistics about the growth of Ning. They now have over 200,000 social networks and will quickly surpass 300,000.

• Over 70% of the networks on Ning are active, as defined by “used in the last 30 days”. This is a considerably higher percentage than we would have thought when we created the service, given that we make it so easy to create a network that you can do it in two minutes, for free — I would have assumed there would be more throwaways. It turns out that people really like using social networks!
• As that “70% active” statistic indicates, the long tail is most definitely alive and well on Ning — activity on the system as a whole is spread out broadly across the base of active networks. This continues even as the largest networks on Ning are getting much larger than ever before.
• There are now more — actually, a lot more — social networks on Ning than there are on the rest of the Internet in total, including all of the other services that let you create your own social network combined (i.e., all of our honorable competitors combined). (Note: I highlighted this part)
• Our growth rate continues to accelerate as the overall penetration of social networking across the Internet expands. As more and more people all over the world use social networking — including the big one-size-fits-all social networking services that many people use first — people become more interested in creating and using their own social networks for many topics that they care about. This is a very large market, and it’s growing very fast.
• Finally, fewer than 1% of our current networks fall into the adult category — a number that’s frankly surprisingly low, but one with which we’re just fine.

I think this is great. I like Ning a lot and hope it is hugely successful.

I had two main reactions to the post. My first reaction was to challenge the boast that Ning’s 200,000 social networks is more than the rest of the Internet in total. I think he’s got that way wrong. Social networks have been around for a long time on the Internet in the form of forums. And there are way, way more than 200,000 forums on the Internet.

But my second reaction was to ask what’s missing from this data that matters. What’s missing is information about whether Ning is here to stay or not. Networks, users and page views are all good, but money is what matters.

I want to know if Ning is cash flow positive. Have they figured out a way to make their social networking business profitable? I want to know because if I recommend to a podcaster or company that they should use Ning as their social networking platform, I want to be sure that Ning will not go away someday.

If Ning stopped, I may be able to get the data out of Ning, but then what do I do. The data is set up to be used in Ning’s infrastructure. I don’t see where I would go to get the same kind of service and the business interruption would be very costly. Anyone who is setting up a Ning social network and not considering this risk is being foolish.

So I have to ask Mr. Andreessen and Ning, how can we be sure Ning is here to stay? Open up the books and show us a nice secure balance sheet and a cash positive business, or at least something that convinces people that Ning is here to stay.

If you know more about Ning, leave us a comment.

Click here follow me on Twitter at http://twitter.com/alexnesbitt

[tags]Ning, Marc Andreessen, Social Networking[/tags]

Why the space valuable? Size and growth of audiences is driving value. The opening of the API’s at MySpace and OpenSocial is driving huge opportunities.

Application developers ask VCs why should they take the money when they are making good money with their applications. The answer according to the panel is that they can help build the company into something with substantial scale.(my note: this is a standard VC pitch, so make them prove they’ve done it if you are taking their money for this reason. A much better reason is their connections and how they can help you raise more money in later rounds.)

Each sector may provide one or two leading applications, but can any individual segment get to scale. Maybe there is a play in consolidating leading applications across sectors.

What are the big opportunities for a small Facebook developer? Build something good, get good reviews and use that to drive adoption. Growth may be slower, but users wills be more valuable.

Focus on building your business. Build a model that pays for your servers, then your salaries, then makes a profit. If you need inspiration, go to Borders. Look at the magazine racks and find a niche that you can serve.

As for valuations, make its a discussion.  In the end, make sure you feel good about taking the investment.

[tags]gspwest08, graphing social, Facebook application funding[/tags]

Global advertising spend on the internet continues to grow rapidly. There are a whole variety of ways to monetize via advertising and transactions.

Application monetization networks like SocialMedia and VideoEgg have emerged to aggregate applications into advertising networks. To turn this into a big business, we need to get the brands to start spending more seriously to reach these audiences.

Marketers need to think about very new things when marketing in applications and games, such as where/when their ad gets shown within the application flow. Once the user is more engaged there is more likelyhood of getting the user to do things with advertising.

Murtaza observed that CPM can pay some bills, but real action is in virtual currency used that can be bartered for services and goods, both physical and virtual. Troy says that people can drive high media value they can make the money needed to drive revenues.

Seth observed that the best that Google has been able to do for Adsense is an effective CPM of $0.50, and that we need to do better than that to be successful.

What’s the new measure – revenue per active user according to Murtaza.  The ad network guys on the panel still focus on effective CPM.

(My note: This panel was very skewed to advertising.  There was very limited discussion of monetizing options beyond advertising.  Virtual transactions, lead gen all have much more potetial as CPM is not going to go up in my opinion.  Large publishers such as Yahoo have huge amounts of unsold inventory and it’s not going to get better as the world of content continues to expand faster than the amount of user’s discretionary time.  My bet is with Murtaza.)

[tags]gspwest2008, graphing social, application monetization[/tags]

How to measure engagement? At first, Facebook reported installs, now it’s number of average daily user. General concensus that this is somewhat misleading.

Are you getting lots of daily visits, lots of new users with churn or are you getting frequent return visits? Time spent on site, frequency of revisit, page views, content generation are also all good measures.

Why do some applications stick vs fizzle? Active work on the app, freshness and up to date features help. Things that provide an ongoing service tend to stick, one time use tends to fizzle. Freshness helps, people don’t want to revisit the same old stuff.

Little Green Patch held out as an application that has done a great job of always giving you something to do next. PacRat trading card game – amazing art, with really original gaming aspects that drive use. Someone else said PacRat is way too hard to learn. Bumpersticker is another application that has been great for users. It’s user driven content that drives freshness that scales.

Building gaming effects into the applications really helps drive engagement. Levels, leader boards. Well designed asynchronous game aspects can be really helpful in driving lots of use. Scrabulous does this really well.

Tim observed that if you can get people to use your application as a communication channel, you have reached the pinnacle of engagement. Reading Social was provided as an example of this.

User generated virtual goods that allow people to be raised up a celebrities within the community it can also drive deep loyalty and engagement.

New features that activated community – Mike said that gifting functionality allowed users to engage with each other in new ways. It created a user to user currency that allows the currency to thrive. Also, allow people to build up something over time. Leaderboards are another example of building things up over time. Give people the tools to add features, like quizes. Adding games into the application also enhances the user experience. Announcing today’s birthdays can drive birthday cake giving. Zach monitors this gift giving as his main metric of success.

Andrew started the conversation by describing viral marketing as a marketing system where your customers sell your next generation of customers. Jia pointed out that the time frame now has been collapsed by the social networks so there is an accelerated viral opportunity.

There’s been a long evolution of viral from word of mouth, through email and other tools that have been turned into features of the social networks. Now instead of starting with the product, you can start from the customer and work back through the social networks as distribution channels.

Jai pointed out that early on Facebook did not put much restraint on how many invitations could be sent which created a gold rush effect that allowed an eco-system to grow as developers chased the growth. Now Facebook has put constraints on viral marketing tools which will make it much harder for new players to grow. The newer APIs are also being more conservative and that means they may have more difficulty building the same kind of ecosystem.

The differences in functionality across sites drives difference in application strategy. For example, on MySpace the focus will be more on applications that are self-expression, canvas oriented and less the viral, messaging applications.

Andrew highlighted that you can learn a lot from games in helping to make applications more successful. Things like reward schedules can drive use.

If you can build something that catches on you will know after the first couple of thousand users. If it’s successful with this group you can be confident that you can grow the applications penetration. Less viral applications will take marketing money to grow.

Being viral is not all it takes. If you’re getting lots of visitors and trials, and are not converting them into active users you are missing the opportunity. You need to make sure you’re measuring retention and repeat use of different visitor cohorts to ensure long term success.

It takes both viral growth and engagement to be successful.

[tags]gspwest08, graphing social, viral applications, viral marketing[/tags]

Application count is up from 500 new applications per week to over 600 new applications per week, climbing up to over what appears to be 17,000 applications. The top 5-10 applications have really been the most successful in terms of usage, with a steep curve downwards for many other apps. 1% of apps account for 77% of volume, 2% account for 86% of volume, 10% account for 98% of volume and 20% account for 99% of volume.

Update: Found a Facebook Analytics site with some good date here.

[tags]gspwest08, Graphing Social, Facebook statistics[/tags]

The panel talked about what they are doing and how they are making money. It all starts with how social games are different?

The opportunity is to create the very personal social gaming experience that we see when families play the Wii. Creating games like this online is the goal of social games. It’s about bringing people together, whether they be strangers or friends or family. The psychology of the games becomes more important in social games. The perspective is on an easy way for people to hang out together, not on game technology.

Experiencing the internet together is more fun than doing it on your own. A good rule of thumb is, if it can’t be made better using Facebook don’t do it. Users enjoy the light weight nature of these apps. Social gaming takes share from casual gaming.

Scarbulous is the breakout game. It’s so simple that it allows you to interact with lots of people in a light weight asynchronous interaction. Long playing synchronous games are played in a single session that doesn’t create a reason to come back. Asynchronous games give you a reason to come back. This can cause powerful viral effects.

Branded games are the key to monetization right now. It’s highly efficient way to get major brands and media companies reach their audiences. Average deals right now are about $100,000 for Buddy Media and they are sold out of inventory right now, so they are working on monetizing other company’s games. Another great opportunity for monetization is virtual goods. The amazing thing is that all the companies on the panel were profitable and they think there is still more upside if they can close brand deals.

Are social games a hit driven business? Games are hit driven. The big ones get bigger and the rest fall off. The is definitely a cycle of growth, use and then fatigue. The end level though may be higher than what is seen elsewhere on the web. A number on the panel are working on how to create networks to help leverage existing installed base of applications, either through click networks, APIs, partnerships, platforms that can be rebranded or acquisitions.

[tags]gspwest08, graphing social, social games[/tags]

MySpace has had a history of a strong ecosystem

• Youtube , Photobucket, Slide, RockYou are all examples

MySpace values are driving there developer platform.

• Minimal creative restrictions
• Encouraging self expression
• High level of customizability
• Beneficial to user, developers

MySpace API overview

OpenSocial APIs

• javascript/html for embedded apps
• with myspace extensions

REST APIs

• server to server comm
• Oath authentication

Actionscript APIs

• flash support

Why OpenSocial?

Openness

• openness key to Myspace success
• openess helps everyone

Portability

• developers can spend more time building a great product rather than rebuilding for every social network

Leveraged existing technologies

• no need to lerrn proprietary development languages

OpenSocial Support

• full support of public spec
• currently support V0.6 with support for V0.7 soon
• MySpace specific extensions for MySpace specific features
  • bulletins
  • additional attributes for bands

Platform surface

• Profile surface
• Canvas surface
• User homepage surface (private space)
  • User specific surface
  • Enables the application to show specific data to a user
  • eg ebay bids, tweets from friends
• Application Gallery
• Application Profile

Security, Privacy and Safety
Applications will go through safety review process makes sure it doen’t spread bad or rogue code or viruses, keeps data secure and protects against rogue actions from other users

Apps will be governed by same privacy controls that are in place for members
will be using new technology to ensure that applications are safe for end ocnsumers

• Caja – MySpace and Google Joint Javascript Sanitizer
• Proprietary MySpace Technology

Balancing Virality and user Experience

Virality vs User Experience

• take long term approach to growth and distribution
• ensure clean applicaiton experience

Spam based growth is not needed for good applications

Measured approach to application growth

• Workflow limited to sending message 1 to 1

Restrictive early on, slowly increase communications channel

[tags]gspwest08, graphing social, MySpace[/tags]

What does Social mean? We look at each other, talking, laughing, we help each other, we read together, we do projects together. We also have social objects that we tell stories about.

The challenge is how do we socialize objects online without having to create yet another social network?

OpenSocial designed to do this. OpenSocial is one API that works with many websites. Just now getting through gartner technology hype cycle over the last 3 months. OpenSocial is now on version 0.7

Core OpenSocial services include people, activities and persistence. After a tour through some of the code used to make the API work, Kevin Marks described two open source projects designed to help build appliations – Caja is project designed to help prevent things from going bad. Caja is an optional Javascript sanitizer for use by developers. The panel recommended using Caja or at least tesing using Caja.

The second project is Shindig. Shindig is a reference implementation of the OpenSocial and Gadgets stack that is designed to accelerate development and deployment. The panel said that now is the time to start developing.

Update: Here is the slide show:

| View | Upload your own

And a post by panel member.

[tags]gspwest08, graphing social, opensocial[/tags]

Fast, easy, open, and everywhere are key reasons why cloud computing wins. The cloud is about getting the computer out of the way so that we can be more productive.

How does this matter in the social cloud? Getting the computer out of the way so that we can interact more easily and be more productive. People are the killer application of the web. This is not new. Getting me to the information I want has a long history. email, newspapers, bookstores, ftp, gopher, bbs all were the beginning of this. Social used to be spelled c-o-l-l-a-b-o-r-a-t-i-o-n.

Need to get the accidental barriers out of the way.

When Google thought about social they started by asking where would it be better to do things with friends. ie add “do it with friends” to end of sentence such as – You will plan a trip with your friends.

Hard problems still out there. These are accidentalt barriers.

Fragmented authentication is a problem. Different logins across sites cause people problems. OpenID is a good start, but has a ways to go.

Fragmented social connections. Too many places to set up friend.

Fragmented applications across sites – not the same everywhere my friends are.

Goal is tomake the social web better. The end result any app, any site, andy friends without having to think about it.

First step is to share the pain.

OpenSocial’s goal is to allow you to

• Invent it
  • xxx with your friends
• build it
  • standard web app (html/javascript)
  • new JS APIs(who I am, who I know, what I do)
• Run it
  • on any social site that runs api

There were a number of surprises from launching OpenSocial:

1. Breadth of interest. Classic social networks wanted to use it, the business oriented sites wanted to use it, enterprise software wanted to use it, communities wanted to use it. Lots of different types of uses, all with the same basic use case.
2. Open source is a good idea. Shindig in Apache incubator was set up, thanks to Brian McCallister at Ning. Clear mission, open license, engaged community and real world use.
3. Execution is hard. The idea is ahead of the execution. This is what’s next.
4. Questions about can you also help with… connections across networks that extend the solution to other aspects of connecting people, apps and sites.

What’s next?

1. Get the spec and build apps
2. Contribute to Shindig
3. Join the group and grow the spec

[tags]gspwest08, graphing social, OpenSocial[/tags]

Group One – Facebook Apps

• Who Has The Biggest Brain? Facebook App, 600k downloads, 4 minutes per session – 2 million minutes 22%
• Just Three Words 7 minutes on site with lots 2 hours per day three weeks to write two weeks to rewrite 3 million words, 60k stories, average size 200 words, created for public – 2%
• Puzzle Messages – simple hybrid between puzzle and messenger have total of 27 apps and 12 million users – 1%
• Ski and Snowboarding – 1200 resorts in the world – Where have you been? Show off where you have been, share photos etc. Users have geocoded where the resorts are, correcting a lot of what had been poor data about location. -9%
• Dipity – Wikipedia for timelines in Facebook – takes all the data and connects other people and publishes the results in a timeline. Allows you to add other RSS feeds to timeline. -22%
• Developer Analytics – Analytics for Facebook Apps. There’s an analytic tab that’s hidden right now. Virality(install as a result of some one else installing), Engagement(return uses), Revenue. Rolling out to private beta in next few weeks. -40%

Group 2

• Know your neighbor – Written for Orkut – Twitter for your community and neighbors on steroids. Sorts neighbors by distance from you and lets you send messages to your neighbors – 6%
• Reading Social – built on OpenSocial sharing about books across platforms. Also showed dining social, drinking social, music social – 41%
• Going Places – connecting people and places – social travel application. “Smart Travel Layer” connects to Facebook, MySpace, Orkut. Take test – match with friends on compatibility basis. Add places you’ve been. 400,000 places in database. You can see who has been to places you want to go and see how they rated that place. – 8%
• ChirpScreen – photo sharing app using a screen saver. Facebook, Twitter and Flickr accounts all feed the app. Has comments back to photo owner. – 43%

Note: final votes will be updated tomorrow.

[tags]gspwest08, graphing social, GSP AppNite[/tags]

DiSo is a project founded by Steve Ivy and Chris Messina, built on top of WordPress. The project aims to explore the design of a distributed social network using many of the building blocks the blog software already supports, while leveraging technologies like XMPP and XFN for friendslist federation and message delivery.

Social networking is not all about the add. It’s not about stupid apps. It started out with niches, MySpace – bands, Facebook – college students, LinkedIn – professionals. They were all system centric views of social networks. This causes the view of system centric value, not people centric value. The internet is much bigger than any sytem out there. We should not consider users to be customers.

We need to move from system centric view to a citizen centric view of the world. Who are web citizens? They have identities, they have provenance, they have friends, they have agency.

What are the aspects of a distributed social network. It has a home for your data. It has the ability to manage the data. Systems should subscribe to me. I should not have to subscribe to them. There needs to be flexible permission systems.

Benefits from a distributed model. Cross pollination of value from different systems. A more up to date profile that makes it more valuable to other systems. Permission for everyone to build based upon the profile. Easier upgrade path.

Components of a DiSo site. Activity feeds are proliferating. Ability to publish friends list and ability to move it around. Messaging and notifications are critical components. Filters to handle flood of messages. Standardization of terms and permissions. Groups, grouping and events that put the user in charge. Identity consolidation and rel-me.

Technologies that are available: OPenID, Microformats, OAuth, XRDS-Simple,ATOM/APP, Jabber/XMPP

Current status: Starting with WordPress because it’s PHP and there was an existing OpenID plugin they could use. You can find out more at Diso-project.org

Update: Here are the slides

| View | Upload your own

[tags]gspwest08, graphing social, DiSo, Chris Messina[/tags]

Dan Farber (CNET Networks), Joseph Smarr (Plaxo), David Lavenda (WorkLight), Allen Hurff (MySpace), Ben Metcalfe (Swordfish Corp / DataPortability.org) discuss managing privacy and data portability for social networks.

Where are we on data portability?
We are still in a walled garden environment. I may be a Digg user, but finding all the other people I know is a pain. People keep scraping your contact list to find other people. We need to get both the technical and the human side of this to work.

Discussions about online reputation, who owns comments etc need to be taken into consideration with respect to how you support data portability and still manage privacy.

What do we need to do to bring intranet data to social sites?
On the data side is the primary issue is how to manage security and access to data. On the work flow side, control over data and data security is a big issue. Secure Enterprise 2.0 initiative is just now getting up and running to focus on the issue.

Where are we on the Data Portability Initiative?
Companies recognize it is a big problem. It has taken time to pull the group and organization together. A number of start-ups will announce when they release products. Across the board there is support, but it is taking time. Are companies still protecting there data or will those that go open gain an advantage? Still an open question, but these large companies want to be involved to help shape how this concept will scale.

How do we get consumers to grok this?
Build real use cases that the consumers understand. When you show them in a way that makes sense to them. Who gets to see your photos etc? Once consumers see it working the right way somewhere they will point to it as an example of what they like.

[tags]gspwest08, graphing social, data portability, privacy[/tags]

Jeremiah walked through the challenges facing developers as it relates to monetizing apps and walked the panel through how they view these challenges.

One word description of the business models of the panelists:

Forrestor – library, Clearspring – connector, newsGator -Kitchen, Widgetbox – Color Me Mine, Gigya – Spine for Social Media

Measurements and ROI
Not well developed today. How do we measure in a distributed world? Technically we can collect the data, but real communication gap in connecting web data and ROI. Do we get sales bump? Can we measure that like we can with coupons? Need to start with monetization strategy to decide how to measure so that we can structure data collection and measurement correctly.

Brand protection
How can we make sure Pepsi ad does not put next to Coke ad? You can’t. Consumers own the brands and they decide what’s relevant. Give consumers tools to market and evangelize on your behalf.

Distribution
How do we get widget distribution? Well known brands will get picked up, but problem for the remaining 99.9%. One option is to put the widget into ad units, but that might not have contextual relevancy. Getting close to the community may be the best option.

Monetization
How to make money? Everything that’s new, is not so new. There’s the social apps that are view/impression based. Starts with CPI (cost per install) basis. From a publisher prospective, extension of your content. This gets into revenue sharing deals that need to be worked out. The challenge is to get both parties to agree on the split. For advertisers, they want distribution they can pay.

We will learn a lot from the entrepreneurs out there about how to monetize.

Widget Strategy
How do we build a widget strategy? Need to understand full scope of process. need to define end to end success: conceptualization up front, distribution, measuring success on the back end. Start with objectives, for example, awareness=distribution, insight=installations. Take the top one or two things they come to you for and let them take it away with them. If its search, let them take your search with them. Really identify with your audience. Respect them. If it’s not popular on your site, it won’t be popular as a widget. Think of a widget as an extension of your website. Link it to your web monetization strategy.

Mistakes
What are the biggest misconceptions? Assuming it will be viral. eBay created a Facebook widget that doesn’t get used as compared to a third party widget that gets used on websites. The eBay widget doesn’t get used because Facebook is not about shopping, but the website widget gets used because it can be used to drive traffic to auctions.

Confusing information like a news feed with being social. To be social, it needs to be interactive, engaging and make my day. Really social apps that deliver value get lots of clicks.

Questions:
Can revenue be derived from utility as opposed to advertising? Look at Widgetbox – they make money. Lead gen applications like credit apps can be very profitable.

How do you work with a client to budget for widgets and media distribution? Costs can be anywhere from $5,000 to $150,000 for development. For distribution, look at online marketing campaign for examples.

[tags]gspwest08, graphing social, widgets[/tags]

Oren Michels (Mashery), Seth Sternberg (meebo), Jessica Alter (Bebo), Jeff Roberto (Friendster), Chris Damsen (Netvibes) discussed some of the different social networking platforms.

To add to the competition, Chris, from Netvibes, announced that Netvibes was releasing its platform. Code name Ginger.

We have a lot of competing platforms beyond Facebook and OpenSocial. If you look globally, different platforms have very different penetrations of different geographies. It presents challenges for application developers who must publish on different platforms and opportunities for other developers to make their versions of popular apps for other platforms.

It’s still really early as we are only 8 months into this platform API proliferation, so there is still time to get involved and innovate.

Every platform wants to embrace every application, but also wants to differentiate their APIs to expose unique features of their networks. This makes it tough for developers to really scale across different platforms. Seth, from meebo, talked about how the IM networks have competing standards and how it would be “way” better to have a write once standard for developers and users. The issue is who sets the standard and what risks does this pose for the others.

Jessica, from Bebo, points out that each of these companies would like to have healthy and well developed ecosystem, and that they have different functionality so one standard may not fit across all the networks. Bebo which has embraced the Facebook standard as part of it’s API, and it takes a few hours to port a Facebook app to Bebo. To port to Friendster, it could take hours to days.

Question: Most surprising group to join network:

Meebo – Librarians
Bebo – US community very engaged and younger
Friendster – expats moving around the world
Netvibes – well distributed user base

[tags]gspwest08, graphing social, platform wars[/tags]

What’s social about feeds? Feeds help you keep track of what you friends/family are doing and can also be used a social filter for new content discovery.

The panel discussed what’s public and what should be private. A concern was raised about how the norm with a feed is sharing, unlike email where there is somewhat of an understanding that it is not something that should be public. In reaction, it was important that there should not be surprises. The user should have control over what information gets shared and with whom. Facebook doesn’t allow user activity to be shared via a feed and the panel felt it should be open.(applause)

The very public is easy, the very private is easy. It’s the middle ground that’s hard. The balance is where the focus needs to be.

The other factor is to be a good partner with the content providers. For aggregators of feeds, sending traffic back to the site that generated the content is really important. The challenge is to drive enough value back to the source to make sharing worthwhile for everyone.

When focused discussions happen within a friend based network the discussion can be much higher quality than a wide open public conversation like those on YouTube. It was observed that as more and more content flows onto the social networks and into feeds, we will see an increase in the need and value of filtering.

Clearly feeds are valuable, but there are some real business model issues to be resolved as more and more mashups integrate content from across the web.

[tags]gspwest08, graphing social, feeds, lifecasting[/tags]

Rodney views it s frictionless WOMA, facilitates customer acquisition and drive low cost customer acquisition with specific demographic targeted marketing.

He describes how Facebook can be used for Lead Generation, brand extension, exposure and loyalty.

Suggests that marketers start experimenting.

8 ways to market on Facebook: Apps, groups, paid groups, tarted ads, newsfeed ad buys pages, beacon, and guerilla.

Scrabolous is the new golf – a new way to micro-touch and communicate. Where I’ve Been – good example of how a brand can sponsor an app and is aligned with Orbitz. Firefox group is an example of sponsored group. Facebook Ads is a self service ad solution that allows you to target demographics networks Social Ads with personal relevancy. CTR is low(my experience with CTR is 0.02%). Pages are another way to market. What’s the difference between groups and pages. News feed $100k to buy the banner. 1 ad per page. Third party ad networks like Cubics and Zynga (game network) have emerged to advertise on applications.

Rodney describes steps to success that include a clarity about end goals and a willingness to experiment.

Questions:

What about forced invite numbers? Tested forced invites with greeting card application – forced invites worked, but now growth remains.

[tags]gspwest08, graphing social, facebook marketing[/tags]

They start by running through the background to the class and the founders of the class. They call it the Stanford Facebook Class and describe how they were making it up as they went. They thought they were going to have each student make 3 apps each, which may have been over ambitious.

Thought they would get 20 students, and 120 showed up for the class. They ended up with 80 students. BJ, Dave McClure and the TA’s aught 2 classes per week.

Four or five applications were really successful, such as KissMe. They got lots of press coverage, some of which was good, some not so good.

Students independently set up a Sunday group meeting that is still going on. The final was an open expo with over 500 people attending to see demo’s of the applications. You can find the student presentations at bayCHI

$500,000-$1,000,000 revenue generated by class, three companies formed, 2 companies acquired, lots of job offers and a few drop outs.

Phase 2 – 2 month experience to try again eg Oregon Trail (sp?)

Takeaways:

• Never too late to build new app
• Simple apps won
• Speed and iteration matter
• Community cooperation leads to success – more sharing, more success
• Individual opinions are worthless, need the crowd to judge
• Copying success is cheap/fast way to succeed
• Metrics matter, but today’s tools are weak – had to build their own
• This is a learnable skill
• Success comes from chaos/control cycle
• Mass interpersonal persuasion is finaly here

[tags]gspwest08, graphing social, Stanford Facebook Class[/tags]