Kids On Facebook – Facebook Briefs Parents in Palo Alto: Where does Facebook’s Business Model Fit into Protecting our Kids?

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My kids have Facebook accounts and we have a Facebook policy in our house. I guess that you’d put me in the camp of “parents for Facebook”. As a new and avid user of Facebook and someone keenly interested in social science and child development, I attended a Facebook meeting last night with parents in Palo Alto with great interest.

Every social media network is searching for the best method to create large audience leading to large amounts of advertising revenue. With over 200 million users and increased R&D budget to develop 35 new foreign language interfaces….I would say that Facebook’s goals are clear … to increase the social graph as quickly and dramatically as possible. It is working. 70% of Facebook’s users are outside of the US. Every day new members are added. Friends of friends become friends of friends…and so on and so on. Facebook is our children’s present social communication culture. Bravo to Facebook.

How many of those “friends of friends” do you want your child interfacing with…regularly, publicly & not in the real world? Being the inquisitive parent I am, I attended a local high school Parent Ed meeting last night.

The event l was billed as an event to increase your knowledge of your kids’ cyber culture on Facebook. The Facebook employee panelist was informative enough, but I couldn’t help feel that he really didn’t “get it”. His youth was indicative of the Facebook employee culture, but I am guessing he has never worried about a child getting home safely or being stalked on the Internet.

Questions were answered relating to privacy settings & Facebook procedures for blocking inappropriate posts and or members. The slide show was informative, but didn’t really reach the heart of the matter. The high school principal spoke with us about how the administration disciplines kids who post inappropriately in the high school network. The two high school age panelists spoke to their methods of protecting and sharing their information on Facebook. Yes, interesting, but I still left the event feeling hungry for more parenting tools.

I was left wondering, who is monitoring cyberspace outside of school hours? Whose responsibility is it? Should Facebook default to the most restrictive privacy settings for minors? Wouldn’t restrictions to spreading networks be highly counter to their business goals. Is Facebook’s sharing and connecting utility and business growth plan in conflict with the best interest of the kids?

Some parents felt that the school needed to become more proactive in teaching our kids to be safe, and even went so far as to suggest a mandated course. Others indicated that the cyber businesses which interact with youth need to take more responsibility.

My take: This is a new parenting frontier – an opportunity. We are two steps behind our kids, even if we think we know what they are doing online. It is a parent’s responsibility to discipline (Latin root = teach) our children how to protect themselves. Many kids balk at the idea of sharing their online communications with parents. Until my children are 18, I am the authority. We need to set expectations for our kids & walk them through this uncharted territory with guidelines. Parents: require your children to share passwords with you. Set time aside to see what your children are doing online. Invite them to browse through their accounts with you. Ask questions and really listen.

It is only with the cooperation of the businesses, schools and parent communities that we can hope to enjoy the benefits of social networks AND keep our kids smart & safe online.

Discovery, Navigation, and Collaboration – Hello Holy Grail – Facebook Is Soaring – They Will Be Huge – Trust Me

I am a big believer that Facebook’s massive growth is bigger than most people think. They are pushing a utility that delivers big time value. Over the past year I have been studying the utility of Facebook and can tell you that it’s not about just sharing and throwing sheep – It’s about people in a new paradigm. Facebook has the opportunity to take a very strong value proposition and evolve how users discover and navigate (the core principles of search) BUT more importantly they are in the exchange position of real value – actionable value transfer. Simply put: they broker transactions from finding lost friends, staying in touch with existing friends, making new friends, to finding and buying products and services. They can be a hub of collaboration of all sorts. All of those elements make them poised to make it big time. If they continue to keep their eye on the user experience (utility) ball then they can get there. Their numbers are just too big to be dethroned. The only way Facebook will miss the opportunity is if they screw it up on their own. Facebook as they say is ‘gold plated’.

Here is a post from Facebook’s CEO Founder Mark Zuckerberg.

Today, we reached another milestone: 150 million people around the world are now actively using Facebook and almost half of them are using Facebook every day. This includes people in every continent—even Antarctica. If Facebook were a country, it would be the eighth most populated in the world, just ahead of Japan, Russia and Nigeria.

When we first started Facebook almost five years ago, most of the people using it were college students in the United States. Today, people of all ages—grandparents, parents and children—use Facebook in more than 35 different languages and 170 countries and territories.

The full potential of the web is to make the world more open, so everyone has a voice and can share what is important to them. With 150 million voices and counting, we can’t wait for the rest of 2009, and we look forward to offering even more ways for you to connect with the people who matter most.

Silcon Valley Story: Twitter Please Don’t Be Web 2.0 Pointcast – Don’t Pull a Pointcast

Twitter was offered $500 million from Facebook as reported by Kara Swisher (who has an accurate reporting record).

Let me get this on the record: I love Twitter. From the day that my friend Dan Bricklin showed me Pyra I’ve been watching Ev and his team at Pyra, Odeo, and then Twitter I have been a big fan of those product guys.

Twitter has been a ‘whale of a hit’. I remember when I started PodTech we moved the needle with Twitter at SXSW in 2007 not only was it fun, but it was effective. Since that time in early 2007 Twitter has gone and continues to go mainstream. Many people use Twitter as a way to communicate to peers and friends while some use it to promote their wares (PR firms and social media wannabees).

Here’s my point: I hope that Twitter doesn’t become the Web 2.0 version of Pointcast. For all you not familar with the storied company they were a big Web 1.0 company with massive hype and viability. In fact their product paradigm was awesome. Except for some minor fatal flaws – like price of bandwidth and massive changes in clients software (browser) – it was a great product.

The final nail in Pointcast’s coffin was their blatant turn down of a $300 million+ offer from News Corp. Pointcast’s hubris reject the News Corp offer. Why? They were drinking the Web 1.0 kool aid – they thought they were on the verge of riding the wave of the Dot Com gold rush. That bubble popped and Pointcast was sold for like $2 million (mainly IP) a few years later.

Now here we have Twitter having a ‘whale of time’ enjoying their success and constant outage. Facebook offers $500 million and they turn it down. I love Twitter but I think that you’re on the verge of pulling a Pointcast.

Facebook COO Sherly Sandberg Desperately Looking For An Ad Model

Here is an AdAge story about Facebook and their need to find the revenue model.

Rob Hof Editor-in-Chief at Businessweek comments and links to his view (he was there) below that Sheryl Sandberg main point yesterday is not what AdAge was reporting. It seems that Sheryl was saying that the only thing around today is demand gen. Thanks Rob. Rob also points to Mediapost which has a followup. Apparently the real twist in this is that the Advertisers want a solution. This sounds familiar – I feel like I’m in early 2000 again. Search went through this growing pain. Whoever delivers the solution will ‘mop’ up the revenues. THANKS ROB

Over on the metarand blog there is a good post on this by Randal. I like his analysis but would disagree with Randal on the monetization focus and his reference in Jeremy Liew regarding to online advertising growth. Online advertising is a growth sector and will NOT slow down in the medium to long term. Maybe short term yes but long term massive dollars are going that way. If you look at the IAB stats from 1999-2001 there was gloom and doom. Then look at 2002-today. Massive growth. As Diller says no one has the answer yet.

Facebook’s latest attempt to finally get some real ad revenue has shown early signs of promise, Chief Operating Officer Sheryl Sandberg told an audience at the American Magazine Conference in San Francisco yesterday.

“The results were really positive,” Ms. Sandberg said. MTV not only got some attention for its awards show, it learned a little about what viewers wanted to see. It and other networks have subsequently said they want to try using the product earlier, to make the most of that feedback, she said.
“The monetization question on the web is a very big and open one,” she said. …Ms. Sandberg a former Google executive, noted. “What no one’s figured out how to do is demand generation,” she said.
“We need to find a new model and new metrics,” she added.
“Walled gardens don’t work,” she explained.
“People are using our product to protest our product,” she said, noting that a protest group is now the fifth largest on Facebook.

These quotes speak volumes about Facebook’s lack of awareness to how online advertising works. Pesonally I don’t think that they have to produce the monetization answer right now but instead just focus on the product leadership and key business development deals. I have no idea why Sandberg even entertains the monetization question at all.

Here is my favorite line from the Barry Diller interview on online advertising..
On Internet advertising: “You really want to get a headache? Try to understand Internet advertising. Social-networking advertising is being discounted because there is so much inventory [of available ad spots], and because methods have not yet been found to make it very effective. Will that get figured out? I absolutely believe it will. What form will it take? Absolutely unknown.”

Sheryl you have nothing on the ad side yet just admit it and work with advertisers to get the right solution in place.

Silicon Valley’s Private IPO Market – Eric Eldon Confirms Facebook Getting Liquid

Eric Eldon editor at Venturebeat has confirmed his investigative story on Facebook. Yesterday Eric broke the ground on the story that Facebook is letting employees sell some of their shares.  Hey it’s all about getting liquid 🙂

In a turn of events Eric also reports LinkedIn is doing the same.

What we have here folks is a mini or private Silicon Valley quasi-IPO market.  In the absence of any liquidity option the Silicon Valley VCs and private capital markets need an outlet.   This is self preservation of the Silicon Valley way.

I wonder what the implications are on a sort of mini-liquidity market?  Personally I think this is a good thing to fuel some innovation and reward.

All this is a pre-text to the posturing that Facebook will stay private and not be sold. One poison pill to take is keeping early employees happy and rich.

Lets hope that Facebook doesn’t cause the wealth problem being experienced at Google – the haves and have nots.   As Google approachs thousands of employees who are underwater in stock verses the handful who have FU money.    Facebook better be careful to make sure that new employees don’t feel alienated by the early guys getting rich in a private quasi-IPO.

Overall I’m a fan of liquidity.

Facebook Manufactures Liquidity for Employees – Good Move

Eric (on a roll) Eldon is reporting that Facebook is going to announce that it will let employees “cash out” at an internal valuation of $4b.  This amount is well under the valuation that Microsoft placed on the company.

Facebook has an internal valuation of $4 billion, as Venturebeat previously reported. It will begin letting current employees sell 20 percent of their fully vested stock options at that valuation, starting this fall.

Ok I think that Facebook’s engineering of an liquidity event for their employees is a good thing.  I’ve said on this blog that Microsoft’s run at buying Facebook was their IPO.

My sources inside Facebook and at Microsoft both admitted that employees at Facebook were getting restless given that an IPO is not in sight.   The opportunity for employees to sell some of their vested shares in this deal is great for employees and good for the company.

Web 2.0 Walled Garden – It’s Facebook – Please Do the Opposite of AOL

Walled garden is a bad word in Web 1.0, but maybe not in Web 2.0 web services. In Web 2.0 and Unified Communications “presence” is a big concept and a battleground for the convergence play – the real Web 2.0 opportunity. Over at GigaOm Om writes about his views on Facebook Connect announced yesterday at the F8 2nd annual developer conference.

Walled gardens conjure up memories of AOL. No user value with vendor lock-in. Is Facebook creating a ‘virtual walled garden’ for their lock-in?. Absolutely. What is a virutal walled garden – a place where users originate and let apps and information come to them. It could be the best user experience (one of user choice) a kinds of safe harbor from the clutter on the web that we are seeing today. I think that the Facebook developer story is moving to an approach where apps and information come to the user by design. Where users have a choice to leave at anytime, but the value of the experience creates a comfortably numb user experience that makes them stay.

If I can have my presence sit at Facebook and it can let value come to me via intelligence then I like that. Facebook could be a personal agent for me using my data, their data, machines, and developers apps do all the work. Letting Facebook and my social graph do work for me can be a good thing. This is the original Google value proposition. However, it’s the opposite of Google. It’s discovery and navigaiton in reverse. It’s automated reverse navigation. The social graphs work for me the user. No silos, no requirements, no extra steps, time savings just value.

This line is very telling from Om’s story: Each service adds a few more data points about you inside the Facebook brain, which is quite aware of your activities inside the Facebook ecosystem. The brain can then crunch all that information and build a fairly accurate image of who you are, what you like and what might interest you. With all that information at its disposal, Facebook can build a fairly large cash register.

In my view Facebook is land grabing the presence component of what is looking to be a paradigm shift that will disrupt the Web 2.0 and Unified Communciations sectors (covered at

Other Web 2.0 services like Twitter et al have a unique presence component as well but they might just be a feature not a company. Silo’d platforms might not make it going forward.

Facebook might just force a defacto standard in presence by their dominate position at the user level (90 million and growing).

Could presence be ripped away from the emerging segments like Unified Communications platform and converged into an environment like Facebook? To me user value will win and if users prefer environments like Facebook where information and applications come to them then that might just force some massive change across the board.

Vertical silos might be demolished by open horizontal networks. Interesting development if that happens.

Is it the walled garden of Web 2.0?