David vs Goliath in the Facebook Era – Again

A small town brewery was sent a cease and desist letter by Starbucks. Their hilarious response posted on their Facebook page went viral. ‘Nuf said!

See original article here.

The Dunbar Number Explained

The advent of Facebook and other online social networks has made the Dunbar Number a well known concept. This article provides a nice layman’s explanation of the Dunbar number, in the words of Robin Dunbar himself. The article also points out that recent research shows that while people can have several thousand Facebook or Twitter friends, the number of people with whom they have meaningful interactions remains at around 150.

Dunbar's Number in Twitter Conversations

Dunbar’s Number in Twitter Conversations (Photo credit: Cea.)

It seems as though the concept of a ‘Technology Assisted Dunbar Number’, which I had attempted to conceptualize 5 years ago has not found empirical support – as of yet. Hope remains that technology will one day enhance the limits of human cognition and thus enable us to evolve beyond this natural barrier.

 

Key passages from the article are highlighted below:

 

 

 

Over the past two decades, he and other like-minded researchers have discovered groupings of 150 nearly everywhere they looked. Anthropologists studying the world’s remaining hunter-gatherer societies have found that clans tend to have 150 members. Throughout Western military history, the size of the company—the smallest autonomous military unit—has hovered around 150. The self-governing communes of the Hutterites, an Anabaptist sect similar to the Amish and the Mennonites, always split when they grow larger than 150. So do the offices of W.L. Gore & Associates, the materials firm famous for innovative products such as Gore-Tex and for its radically nonhierarchical management structure. When a branch exceeds 150 employees, the company breaks it in two and builds a new office.

For Dunbar, there’s a simple explanation for this: In the same way that human beings can’t breathe underwater or run the 100-meter dash in 2.5 seconds or see microwaves with the naked eye, most cannot maintain many more than 150 meaningful relationships. Cognitively, we’re just not built for it.

—–x—–

Dunbar actually describes a scale of numbers, delimiting ever-widening circles of connection. The innermost is a group of three to five, our very closest friends. Then there is a circle of 12 to 15, those whose death would be devastating to us. (This is also, Dunbar points out, the size of a jury.) Then comes 50, “the typical overnight camp size among traditional hunter-gatherers like the Australian Aboriginals or the San Bushmen of southern Africa,” Dunbar writes in his book How Many Friends Does One Person Need? Beyond 150 there are further rings: Fifteen hundred, for example, is the average tribe size in hunter-gatherer societies, the number of people who speak the same language or dialect. These numbers, which Dunbar has teased out of surveys and ethnographies, grow by a factor of roughly three. Why, he isn’t sure.

 

Another link to the article is here.

 

 

Facebook offers free mobile talk time in India

Facebook is giving away Rs. 50 worth of mobile talk time (minutes) to new mobile users in India. This pilot scheme was launched last week and offers the give away as part of a referral program. Many have suggested that this may lead to a flood of fake Facebook profiles – however, it seems that there are sufficient preventive measures in place. Instead, this is a clear play by Facebook to increase its penetration of the nearly 1 billion mobile user population in India and comes on the back of earlier offers of free Facebook access. Will it work? This is a long term play – don’t expect a bump in share price due to this in the short term.

 

facebook free talktime offers

via fivepoint5.com

 

  • Scheme is only for new users and not for existing people on Facebook and is valid for registrations through mobile only.
  • New user has to registers himself/herself to Facebook through mobile using the URL – m.facebook.com/tt.
  • After registration he/she has to provide his mobile number on the Facebook Talktime page.
  • Once you sign up and confirm your accounta talktime of Rs. 50 will be credited to his/her account within 3 days.

via http://www.newstrackindia.com/newsdetails/2012/10/18/127-Register-on-Facebook-mobile-and-get-Rs-50-talktime-for-free.html

State of the Social Network War

Facebook might be the biggest social network, but LinkedIn is clearly the stock market’s darling. 

 

While Facebook has been in the news recently for its dropping share price (which perhaps is not a fair reflection of future possibilities as I write in this earlier post), LinkedIn has been quietly going about its job. It has been announcing a slew of features. These include  new company pages, notifications, new mobile features, and Outlook integration.

 

Launching today is our new notifications feature, which will keep you notified in real-time when someone likes what you’ve shared on LinkedIn, views your profile, accepts your invitation, and much more.

 

 

 

 

On iPhone and Android:

  • Get notified: We will keep you notified in real-time when someone likes what you’ve shared on LinkedIn, views your profile, accepts your invitation, and much more.
  • Company pages goes mobile: Find out which connections work at the companies you care about, see recent news and updates from the company, and learn about current job openings.
  • Don’t want your employer to know you’re looking?: We’ve recently added access tojob listings and jobs you may be interested in directly within your mobile update stream.

 

 

Clearly, LinkedIn is doing better on the mobile platform (23% of LinkedIn users use its mobile apps) and on its ability to monetize its user base (for now). This is reflected in the rising share price – this wonderful chart by statista.com clearly shows that LinkedIn is thriving, while Facebook crashes (see the original chart here).

 

Image via Statista.com

 

And what about Google+? Well, this comic by xkcd says it all.

 

Google+

Image via xkcd

Is it really doomsday for Facebook?

Several issues are depressing Facebook’s stock price, but there seems an upside that the market is not tuned in to.

 

Facebook’s plummeting market value has been a major talking point of late. Its share price recently fell to below half of its IPO level and the doomsday forecasts are arriving thick and fast. Most analysts suggest that this is due to a combination of factors – expiry of a moratorium means that insiders are flooding the market with stock; Facebook is barely meeting its revenue and profit guidance numbers; and, the market is adjusting to the ‘real value’ due to reduced future expectations .

 

This article, on TechCrunch, presents three reasons why the future is bleak for Facebook –

Decelerating growth in users, unfavorable change in user mix, and a question mark in ARPU. In the short term, Facebook is certain to grow, but the question of Inferno vs. Paradiso will take quite some time to sort out.

This infographic by statista illustrates the market saturation and user mix problems faced by Facebook:

 

Image via Statista

 

Facebook’s major user growth in the coming years will occur in developing markets – where average revenues per user are traditionally much lower as compared to developed markets. Another major trend is the the movement of users to mobile platforms.

This second infographic by statista makes this more clear:

 

Image via Statista

 

It seems clear that Facebook’s future (or at least future stock price) is dependent upon its ability to monetize its mobile and developing world users. Or is it?

 

A bigger upside depends upon Facebook’s ability to make itself a platform for commerce and creativity. If Facebook can set rules that protect the privacy and security of its billion plus engaged users, while providing an environment within which application developers and entrepreneurs can offer Social network driven, Mobile based, Location triggered services, it can potentially earn billions in revenues through commissions alone. A scene illustrating this viable future is:

 

You are deciding where to get lunch. You launch the FB app, and use the smartphone camera to view a restaurant. The image is augmented by a bubble which states that 78 of your FB friends have recently been to the place, 80% of whom rate it 4+ out of 5. The app also says that if you eat there today, you will get 10% off your bill in the form of FB credits.

 

How does Facebook make real money in the scenario? By taking a cut on the sales of FB credits (for example, $1 = 1 FB Credit, but you can buy 10 credits from Facebook for $11 and sell 10 credits back for just $9).

 

However, these are big IFs and THENs.

Zynga: Downward Ho?

Electronic Arts has accused Zynga of copying its long running ‘The Sims‘ franchise and thus is taking it to court. This bad news follows not so exciting Q2 results from Zynga. As this chart from statista shows, Zynga has a monetization problem (something that many had suggested during the IPO hype). Zynga’s average monthly revenues per user have been declining for the past year. Zynga’s stunted growth also reflects upon Facebook’s slowing revenue growth figures, due to their deep integration.

Or in the words of Statista

After crunching the numbers, we found that Zynga is still having trouble monetizing its ever-growing user base. Average bookings per monthly unique user are on a downward-slope, having declined year-over-year in each of the past four quarters. If Zynga doesn’t manage to turn this trend around, the company will have trouble justifying the hype that surrounded its IPO last year.

zynga-s-monetization-problem

Image via Statista.com

See the original infographic here.

Facebook Q2 Earnings

This infographic, by Statista, presents Facebook‘s Q2 earnings report. The bottom line – revenue growth is slowing as more users access Facebook via mobiles. The sinking stock price reflects investors’ concerns about the lack of a clear mobile monetization strategy.

 

Image via Statista

 

See the original infographic here.

What Facebook knows about you

The fact that Facebook keeps a record of all user data does not come as a surprise. Facebook has admitted to this in its ToS as well as through various media releases. However, the implications of this fact – how much data Facebook has on each of its users and what it knows about them – come through only when one can actually ‘see’ the data for oneself.

An Austrian law student, Max Schrems, asked Facebook to send him all the data it had stored about him – he received a CD with 1222 PDF files. The below video visualizes what Facebook knows about him.

The Case of Orabrush: Building a multi-million dollar company using Youtube

Google’s blog tells the story of how an entrepreneur used Youtube based video ads to market millions of Orabrush – a tongue cleaner. After the failure of a $40,000 traditional ad campaign, the firm spent $500 on making a Youtube video (see the video here or below). After 2 years of increasing success (reflected in sales of over a million Orabrush), they approached Walmart. Again, when a $20,000 TV pitch failed to catch the attention of Walmart execs, the firm spent $28 on targeted FaceBook ads. Today Walmart and CVS carry the product at over 10,500 locations, making Orabrush the “first product to go from no sales online or offline, to nationwide retail distribution just using YouTube. “

Image via Google

Their first ad is below:

Read more at Official Google Blog: The Orabrush story: How a Utah man used YouTube to build a multi-million dollar business.