When I began work as a Social Media Developer for NC State a little over 12 months ago, many websites were vying with Facebook for supremacy of the social networking world. Facebook’s strongest international competitor, Orkut, boasted 67 million members, located primarily in Brazil and India. Orkut’s popularity in these two countries seemed well established as late as 6 months ago. But it now appears that Facebook is making major inroads in these markets as well.
From TechCrunch, Facebook has shown appreciable year-over-year growth of 225+% in India, while Orkut has only grown by 38% in that same period. Even worse for Orkut, their growth actually declined between July and August, in a sign that users are migrating over to Facebook. The analysis from TechCrunch includes many reasons for this shift, not least of which is Facebook’s increasing market share, as well as the availability of Facebook in many Indian language dialects.
Meanwhile, Facebook has eaten into Orkut’s advantage in Brazil as well. While ultra recent data isn’t available, this blog post dated July 1st from inside Facebook suggests the same trendline in Brazil as in India.
As Facebook aggressively pursues international markets and continues to add to its already enormous user base, dont’ expect these trends to stop. Facebook is already the dominant platform in America and Western Europe (nearly every Dane I meet has an account, including many adults), and that has major drawing power for non-users because if all of my friends are there, I want to be there too.
Since its inception in 2004, Facebook has struggled to find a way to make money. The social networking giant may have found its remedy. Bloomberg has the story:
The company is testing a payment system to gain a cut each time an online-game player buys a digital tractor, weapon or hat on the site. That would give Facebook a piece of the hundreds of millions of dollars that are being pulled in by Zynga Inc., creator of “Farmville” and “Mafia Wars,” and Playfish Inc., maker of “Pet Society.” The social-games market will almost triple to $2 billion by 2012, estimates ThinkEquity LLC.
Skimming the microtransactions that make up the social games market could be the answer for Facebook. I’ve long thought that eventually Facebook would need to go to a fee-for-service model of some sort to generate a steady revenue stream and positive cash flow, but then they would face a huge backlash from their user base. Now it appears as if Facebook has a way out, particularly if they can figure out the credit system discussed in the article.
Yesterday morning, I posted about the coming Google Wave and how it will be critical for businesses to keep up with the pace of change. After spending a bit more time thinking about it, I wanted to unpack this idea a little bit, and make an argument about the vitality of having a robust method for employees, managers and executives to communicate with each other.
There is no doubt that the last 20 years have produced incredible advances in our ability to facilitate the spread of information, knowledge and data through technology. It’s become almost mundane to say that the internet has changed the world. We see technology impacting office communication at every turn. In the workplace, e-mail is ubiquitous, instant messaging is common, and Facebook is at least tolerated, if not encouraged.
Right now, “Web 2.0″ (blogs, social networking sites, video sharing sites, hosted applications etc) is a huge buzzword. McKinsey has a study out reporting that companies who use Web 2.0 are reporting positive effects that include:
- More innovative products and services
- More effective marketing
- Better access to knowledge
- Lower cost of doing business
- Higher revenue
In other words, companies who get on board with Web 2.0 and the social media revolution will do better.
However, most of Web 2.0 is a global forum, and this is a key distinction between social media and social communication. Media is a public outlet (think Twitter, Facebook, YouTube) to express ourselves. Communication is more Web 1.0: e-mail, instant messaging and the like. Web 1.0 is that direct contact we have when we actively seek and talk to one particular person. This is very different from Twitter, blogs, etc. where you simply speak to the world and see if anyone responds. And as of right now, we are still waiting to see Web 1.0 make the leap that Web 2.0 has made in terms of connecting people.
Google Wave seems like it has the potential to be that advance. This could have a profound impact on how businesses communicate internally. Google Wave could have the power to render e-mail obsolete. Instead of hundreds of daily updates which we don’t need or read, we will simply have conversations open on our computer screen that also include the ability to work on documents and projects simultaneously from anywhere in the world. Now, I’m pretty sure I might be wrong on some of these predictions, but I don’t think anyone would dispute the assertion that we can communicate better than we do now.
Implementing improved communication methods will be especially important for large, multinational corporations, where using intellectual capital efficiently is an ongoing challenge. There is simply too much information to manage, evaluate and act upon for something as slow and burdensome as e-mail. Even if Google Wave bombs, some new and better form of internet-based conversation will come along.
There is also a strategic element to this discussion as well. I’m currently taking a Strategic Risk Management course, and we are in the process of studying Enterprise Risk Management (ERM). One of the arguments against ERM is that there is simply so much unknown information and uncertainty in the world that it makes no sense to waste money and time trying to make sense of it all. What will be will be. The counterargument to this says that more information is better. While we might not be able to make sense of everything, we can make sense of a lot of things and better prepare ourselves to deal with those eventualities if they happen. I happen to subscribe to the latter school of thought, and I think most people who run publicly traded Fortune 500 companies do too.
Ineffective communication means less information filters its way to the top. The right people do not get the right information at the right time to make the right decision, and this could be a huge strategic threat to companies that grow inflexible because they rely on e-mail instead of faster, more effective communication methods. And it comes back to those large, multinational, matrix-style organizations that are most at risk to this possibility.
Google Wave and its followers are the future, and the future is now. Firms who recognize this will be in an advantageous position to take advantage of their intellectual capital for strategic and tactical decision-making.
Posted in
Economy,
Networking,
People,
Social Networking,
TechnologyTags:
Communication,
Corporations,
E-Mail,
ERM,
Google Wave,
McKinsey,
Strategic Risk Management,
Web 2.0
Via TechCrunch… Myspace’s new CEO doesn’t even have his own Myspace. I don’t know where the blame ultimately lies here, but this is a PR fiasco, and yet another indicator that Myspace as a company is losing touch. You’re the newly-hired CEO of a company that’s quickly losing ground to your main competitor, and you don’t even have a profile? As my Grandma would say, “Oy vey!”
That’s terrible, and it’s not a positive sign that this guy will have any idea how to fix what ails Myspace.
“I don’t feel like getting picked up on by 55-year-old men,”
So said one of my classmates yesterday when we were talking about Myspace. And that in a nutshell describes why Facebook is now crushing Myspace in terms of total number of users and page views. Myspace is viewed as the land of creepsters and stalkers. Most people just don’t feel as safe on Myspace as they do on Facebook. I blew up my Myspace account a few weeks ago, and don’t have any regrets about it at all.
In contrast to Myspace, Facebook is clean, elegant and simple to use. It’s the equivalent of a plug’n'play system. Sign up. Enter information. Add friends. Go. Facebook also has amazing privacy settings, and as a result of these features, Facebook is now experiencing massive growth with older demographics. While I don’t have the hard data, the anecdotal evidence is everywhere. I saw a recent status message from a friend that read, “I’m a little worried when on my ‘People You May Know’ feature I don’t see two of my best friends… I see their Mom’s”
Facebook has now become the dominant design for social networking websites. Its user base is so massive (rapidly approaching 300 million worldwide) relative to other sites that it will continue on this hockey stick pattern for the foreseeable future.
Seems these days that everyone is talking about Twitter, and for good reason. The social networking site is experiencing explosive growth at the moment. Twitter experienced 1,382% year-over-year growth from February ‘08 to February ‘09, according to Neilsen. That’s an incredible jump in usage, and these days it seems like everyone is talking about it (link to funny Daily Show video).
So what is the attraction to Twitter? Why do we feel the need to communicate our thoughts/actions 140 characters at a time to a sea of followers? Don’t we already have facebook status messages, individual text messaging, and blogs to do all this for us?
Yes, yes, and yes to those other outlets. But Twitter does offer a unique value-add. It opens the door to providing direct, immediate feedback, and it breaks down yet another barrier between the masses and the elite in our society. Political reporters such as Karen Tumulty (@ktumulty) and Jake Tapper (@jaketapper) are on twitter and engaging their audience in coversations about the White House. And fans can tweet messages to their favorite basketball players (@THE_REAL_SHAQ, @CV31, @JBay4). If they’re lucky, they might even get replies.
Major corporations will also have to seriously consider adding Twitter to their social networking repetoire. Twitter should be another tool in the belt for tech-savvy companies because of its low cost and ease of use. There are all kinds of creative ways for companies to use the site for customer outreach and support. Retailers could let customers know of sales. Manufacturers and distributors could solicit immediate feedback on new products. You get the idea.
As I’ve been typing this blog post, I have my TweetDeck open and have received tweets from two of my favorite basketball bloggers, a quick blast from my cousin in Portland and a link to a hilarious video about people who follow Twitter too much 
. Additionally, Twitter has now made it possible to link your tweets to other social networking sites such as Facebook, Myspace and Orkut. I have my Twitter account (@RyanMills1) hooked up to my facebook status. Twitter is here to stay, and as more people continue to join the conversation, the site will accrue more relevance.
