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How Facebook Is Crushing Search

2 Feb
2012

by Jeff Berman

This is the second in a series of 10 posts about the future of the media industry contained in a report titled: Rebooting Media: The Digital Publishing Revolution for a Fully Social Web.

Q:  How does the rise of Facebook change the relationship between media and its audience?

Radically. The conversation has historically been pretty much one way – media to audience or audience to audience. And it hasn’t been at scale. In the new world, however, the conversation is scaled and omni-directional. Since Gutenberg, or at least since Marconi, media has had a massive megaphone. But the audience hasn’t had real power. Thomas Paine and his patriotic pamphlets may be the exception; Paine had a voice and a platform, but it wasn’t a scalable model and it lacked speed. Today, everyone is a publisher, and there can be millions of Thomas Paines, reaching tens of millions of people instantaneously. Everyone who wants to create compelling content, or a movement, now has the tools. This is a very different world from even seven years ago.

 

Q: What’s changed fundamentally about media with the rise of the social Web, and what do publishers need to do to adapt?

First, if you’re involved in a one-way discussion, you’re not taking advantage of the social Web opportunity, and you’re leaving a ton on the table. Another advantage if you’re a legacy media property – let’s say The Wire or The Godfather – is that you now have a chance to stay in the conversation and continue it, so you’re alive and you remain active in the culture. You can keep the property and the franchise in front of new and existing audiences, thanks to the new digital tools. If the show is taken off the air, for instance, it can still be all over Facebook. Audiences are empowered today, and folks want to participate in the conversation. No one may be able to control the conversation, but people do want to shape it – and they can. The social Web gives them choices, and it provides options and alternatives for publishers and media players, too.

 

Q: We’ve gone from SEO (Search Engine Optimization) to SMO (Social Media Optimization), so how will search change as the Web becomes more social?

Here are some powerful numbers from a recent Forrester report. In 2004, 83 percent of Internet users deployed search engines to find content. That was before the rise of Facebook. By 2010, it was 61 percent. So, we saw a drop of a quarter in a six-year time frame, the same time frame in which social media took off. This isn’t a coincidence; it is, however, a causal relationship – and it makes sense, given what we know.

On a more sweeping level, we’ve historically learned about shows to watch and diapers to buy because we’ve spoken to friends and family. Now we’re taking these word-of-mouth conversations to the digital networks. And we’re not just using Google to search for the answers; we’re going to our friends’ Facebook pages (and, increasingly, to Twitter, particularly for real-time multi-platform engagement). This is trusted referral at scale, and it’s fast and reliable. That’s why Facebook represents such a monumental shift.

But let’s not forget that Facebook is just seven years old; You Tube is six years old; Groupon is three years old; the iPad is 18 months old – so anyone who proclaims a clear vision of the digital world even five years into the future is either a prophet or a fool. Broadly speaking, you will see evolution in SMO, and a continued deep integration of social functionality. The key point here is that Facebook is a part of today’s Internet operating system, so the efficiency and reliability of social sharing and peer reviews is going to increase big-time. In other words, the 83 percent, which fell to 61 percent, will fall even further as the social Web grows.

Finally, I’m especially interested in what Apple does with TV, and what will happen when Web TV is connected at scale and social functionality is built into the experience. The ability to share in real-time straight from whatever screen you happen to be viewing will meaningfully change the way we choose what content we engage with and how we engage with it.

 

Q:  How do you build a brand in publishing when, with greater frequency, media is distributed through social channels?

There’s an apparent conflict out there right now. The brand world has never been more crowded than it is today. And yet it’s never been easier to build a massive new brand. The reason? As the universe gets more crowded, brand-building tools are being disintermediated. Spotify is a good example. All of a sudden, it’s skyrocketing, in no small part, because its offering is social. The same is true for LivingSocial and Groupon. These businesses have exploded like we’ve never seen before largely because of social functionality. People find it easy to share their experiences about the products, and they like having others show them the way to the marketplace. This is authentic social content.

 

Q: What are the critical success factors in publishing as we look to 2020; and who will be the winners?

The old axiom that you have to fish where the fish are holds true so it starts with platform ubiquity. We’ve seen this already with the explosive growth of mobile, and it’s just going to intensify as a necessary success factor over the next decade. For the vast majority of publishers, you will have to empower your audience to experience your content where, when, and how they want.

For startups, this is in their DNA. But the recent history of media suggests such change is not easy for mature publishers. You simply may have to cannibalize profitable (but declining or soon-to-be-declining) businesses to build for the future. That, or risk watching a newcomer come along and eat your lunch.

 

Jeff Berman is the General Manager of Digital Media for the NFL. He previously held a series of positions at MySpace, ultimately serving as President of Sales & Marketing. Prior to entering the digital media space, Berman was Chief Counsel to United States Senator Charles E. Schumer and a public defender representing children charged in the District of Columbia’s adult criminal courts. He also held an adjunct professorship at the Georgetown University Law Center.

To download the complete report, please click here:  “Rebooting Media: The Digital Publishing Revolution for a Fully Social Web”

Introducing Rebooting Media: The Digital Publishing Revolution for a Fully Social Web

1 Feb
2012

by Ben Elowitz

This is the first in a series of 10 posts about the future of the media industry contained in a report titled:  Rebooting Media: The Digital Publishing Revolution for a Fully Social Web.


As Don Graham, Chairman and CEO of The Washington Post Company, recently remarked on-stage at a conference of leading CEO’s, the media industry as we have known it for the last 100 years is collapsing. The basic structure of our industry – content creation, packaging, distribution, and monetization – have shifted so substantially that the rug has literally been pulled out from underneath media’s business model.

A new model must be created – and the DNA of the medium itself has been irreversibly altered so that it is now innately social.

And yet, in the midst of this upheaval, I’ve found that even the brightest and most well informed strategies are able to tap only part of media’s new nature and capture just a slice of the industry’s remaking.

At a time like this, to get a complete picture of the territory ahead, there is nothing wiser than integrating perspective from the best and brightest people in the publishing world.  And, over the course of the last several years, I’ve been immensely grateful for those leaders’ intelligence and vision.

So, I thought it was only fitting to help create the ultimate social network – one that will enable our industry to share the smartest ideas as it remakes digital media.

That’s what this compendium is all about.

Rebooting Media: The Digital Publishing Revolution for a Fully Social Web brings together eight of the most thoughtful influencers and offers their most cogent assessment of the new online relationship-building that is helping to connect people in absolutely unprecedented ways.

Together, these eight contributors reinforce three dominant themes:

Building a media brand on the new social Web means that publishers have to meet consumers where, when and how they want. It’s all about user-driven pull, and publishers need to offer experiences and establish relationships that may not be on their own terms.

Facebook is a transformative platform driving new personalization and connectivity across the upstart social Web. We are still waiting to see all of what Facebook ultimately becomes, but we know it represents a once-in-a-generation paradigm shift.

Any way you look at it, search (as we know it) is declining. The open sharing of social networks, and the power of social endorsement, are seriously altering what consumers look for on the Web, and how we’re engaging with content. The search algorithm has lost out – big time – to the will of the audience.

But the most powerful insights are in the essays that follow from each of our eight contributors.

Jeff Berman (@bermanjeff), General Manager of Digital Media for the NFL and Buddy Media board member, talks about how Facebook is eclipsing search.

Greg Clayman (@Clayman), Publisher of The Daily, explains why Facebook is taking sharing to a whole new level.

Jason Hirschhorn (@JasonHirschhorn), Curator of Media ReDEFined, considers the element of surprise in social media.

Lewis Dvorkin (@lewisdvorkin), Chief Product Officer at Forbes Media, discusses how he’s tearing down the walls that traditional media built.

Anthony Soohoo (@anthonysoohoo), Co-Founder & CEO of Rumpus and former SVP & GM of Entertainment at CBS Interactive, focuses on the way that the people-powered Web is changing innovation.

Wenda Harris Millard, President of Media Link LLC, advances the notion of a new personal recommendation engine on today’s Web.

Erik Flannigan (@butterking), EVP of Digital Media at MTV Networks Entertainment, shows how to build great relationships with social media fan bases.

Theresia Gouw Ranzetta (@tgr), a Partner at Accel Partners, zeroes in on the way that ecommerce is blazing a trail for social Web publishers.

I have already learned a lot from each of these people and their pieces, and I hope you do, too – not only to build your own ideas, but to help our industry move forward. To that end, I invite further conversation with me, and with our contributors.

The digital dialogue is so essential as we all work to re- invent publishing for 21st century audiences. 

 

To download the complete report, please click here:  Rebooting Media: The Digital Publishing Revolution for a Fully Social Web

Google Search Plus Your World: An Offer You Can’t Refuse

27 Jan
2012

by Ben Elowitz

This article was published as a guest post at XConomy, and is republished here for Digital Quarters readers.

I’ve been taking in Google’s recent release of “Search, plus your world” (or SPYW as the cool kids say) over the last several days, reflecting on what it means for Wetpaint and other media companies; but perhaps even more importantly, deeply understanding what it indicates about Facebook and Google themselves. As we all know by now, these most recent changes are meant to make its search more personal by up-weighting social activity in its algorithm, and using each person’s own position within their circles to determine relevance.

You might think that I would be one of the first to jump in the game with Google. After all, my company Wetpaint has been making a massive investment in distributing our content via other social channels, particularly Facebook. We’ve been seeing massive returns. And, I’ve even gone on a limb to predict that Facebook should be implementing its own Web-wide search this year.

Still, when it comes to playing Google’s social games, so far I’ve advocated staying on the sidelines of all their social venues—even their recent business pages. That’s been because even though the stadium lights are on, no one is on the field. More specifically, even though Google has 90 million registered users of the service, we see very little activity of significance among our target audience. But with its new SPYW changes, the question is: Has Google indeed forced companies’ hands?

Unfortunately, they have. And, in doing so, it marks a milestone in the changing mentality of Google. The search company’s great innovation—using the signals of the Web to best determine what the audience really wanted—has now been subverted. The company’s originally unshakable-seeming ethos of mechanistic neutrality has slowly, slowly, slowly, and now all of a sudden given way, and the new precedent is to favor its own business interests over those of the audience.

The result, like it or not, is that companies that rely on search for traffic must hear and obey loud and clear Google’s message that Google will favor those that favor it. It’s a dirty truth, and one far more chilling than the other more technical biases of its algorithm before.

Google has already started infusing search with the content that’s been blessed via Google+. Do a search for “New York Times” and you’ll probably find the New York Times plus.google.com page as the second search result. Search for “Mark Zuc” and you’ll likely see Zuckerberg’s Google+ page (despite the irony) populate as an option in the Google Instant choices.

I haven’t seen this bleed over to news stories yet, but I believe that it’s coming. Soon you’ll do a search for the latest headlines and your search results will be chock full with musings from your friends and non-friends inside Google+.

Google+ may not take off as a real social network, but Google has indicated that it’s throwing its full weight behind it anyway to make the best of what it’s got. Even if consumers don’t adopt it en masse, whatever activity is present will pepper the famous algorithm’s search results.

The irony here is that Google’s pivot toward a social search belies how important that social data is. The company is putting its lock on search at risk to gain a chance at a foothold on social. But what really comes through to me is that a great social search can be a winning product—if it’s populated with the right social data. So far, Google’s is not.

The question is—if that’s what I’m after—won’t I still just go to Facebook, where all my friends actually are (and which Google has adamantly cut out of SPYW)?

While SPYW does force publishers to support Google’s social network, fortunately it will be a temporary sacrifice from publishers during this period of transition from these days of search to a socially wired world. And that forthcoming world looks increasingly like it will be wired not by Google, but by its arch-enemy Facebook. Indeed, by corrupting the quality of their search product, Google may have just opened up a clear product entry into search for their rival as well.

What We Learned This Year About Creating Successful Media Properties Online

19 Dec
2011

by Ben Elowitz

This week, we made some announcements about our achievements at Wetpaint, and it has prompted me to take a look back at 2011.  It’s easy to be proud of the 6.4 million unique visitor audience we have built at Wetpaint Entertainment monthly.  It is a significant accomplishment in just 15 months since we launched, and the Wetpaint team has worked passionately to get us here. But even a number like that is, well, just a number. The real value of what we did in 2011 lies in the all the learning we had about how to build, run and monetize a successful media property online.

And that learning makes me feel grateful – because as successful as we have been this year, it’s been against a context of upheaval in the industry.  Media is not easy.  Old formulas from print and broadcast are no longer working.  And even the just-minted generation of seemingly successful digital companies, from Demand Media to Zynga to Facebook itself, are having to constantly innovate to stay on top of the wave that they’re on as they hope to catch the next.

Clearly, the most important keys to financial success in media are building audience and monetizing that audience – and we’ve made significant progress on both here at Wetpaint.  Our greatest strength has been the data engine we’ve built to acquire, assimilate, and apply every possible insight about our audience.  We learned that smart and targeted analysis can improve everything we do; that lots of rapid experimentation is critical; and that social traffic is far more valuable than search.

We also learned more about the Kardashians and the people on the The Bachelor/Bachelorette than anyone in this world should.  Our editors did a bang-up job capturing the liveliness of the entertainment industry and they definitely deserve plenty of credit.

But while all our great content and social mojo would succeed in delighting audiences, it wouldn’t be enough to make a strong business without excellent monetization.  And so I’m equally excited to note that as we get ready for 2012, we’ve found that our formula of great content and social mojo is just as valuable to advertisers as it is to our audiences.  I’m pleased that we will be working with the team at Cambio Group via their joint venture between AOL, Jonas Group and MGX Lab.  Together, we will be  serving outstanding advertisers with some of the most innovative offerings around.

With this partnership in place, we are able to turn amazing traffic into amazing financial results. It will mean strength for our model and our company into 2012 and beyond.

But the implications are even broader for the industry, and that’s because we are setting a model that others can follow as well.  And that is what I’m most excited about:  What media needs most is a model that can be scaled and repeated – and our latest results make it clear we are on the right track to build it.

Can Social Drive As Much Traffic As Search?

13 Dec
2011

by Ben Elowitz

I’ve projected before that within the next couple of years, social can drive as much traffic as search to major media properties – especially those that are driven by real-time news.  But I hadn’t expected it to happen so soon!

Yesterday was a milestone here at Wetpaint:  social for the day drove over 45% of our audience visits; while search brought in about 30%.

Now consider this:  Layer on the ~150% higher lifetime value of our social audience (our social users stay longer, come back more frequently, and bring additional viral referrals), and social was responsible for over 60% of the value of our audience yesterday.

It may start as an outlier, but it’s going to get more common.  We are on track to be the #1 social publisher within a short time.  Want to know where you stand too?  Stay tuned for the updated media industry social leaderboard, which I’ll be posting in the next few days.

6 Lessons For the Key Players In New Media

2 Nov
2011

by Ben Elowitz

This post was originally as a contributed piece to Fortune.  It is republished here for Digital Quarters readers.

Tech’s top firms — from Apple and Google to Amazon and Netflix — are vying to reshape media with different game plans. Here’s what they each need to know.

Digital media has the power to change the world. Actually mastering this 21st century business (and art) is unbelievably hard, however. That begs the question: The top media companies all know they need to make changes — but how do they find the right change and execute well? Let’s look at this question through the lens of six key players in the digital media revolution.

Apple (AAPL): Transform the rest of our digital experience.
It may seem arrogant to give advice to the one company that has surprised everyone again and again by being light years ahead of the industry — as well as the consumer. Yet, in a new era of leadership, the most important thing for Apple will be holding on to Jobs’ core values and strength. As corporate leaders go, Jobs was always the best change agent on the planet, and he was never willing to accept the status quo. That’s why Apple is a perennial leader when it comes to devices and distribution for premium media content like music and movies.

The Apple crew must extend its golden touch to the rest of the digital media device world. It’s time to supply the living room with a first-class TV experience; and to seamlessly flow all entertainment between the mobile, iPad, TV, and desktop worlds. AirPlay, iCloud, and AppleTV aren’t all the way there yet. Apple’s next challenge is to make devices that leap forward and bring entertainment and applications wherever I am, and to know me as one person across all of these environments. To do so — and to do so well — will take a huge imagination. And, even without Jobs himself, it’s clear that if anyone can do it, it’s still Apple.

Facebook: Be everywhere the consumer is.
More than any other company on the Web — even Apple — Facebook has changed the nature of digital experiences. It’s already established itself as the dominant social operating system for consumer audiences. And yet it has the potential to go much, much farther. If you need more proof, just this month Facebook announced that it will be facilitating the spread of mobile applications, not to mention linking into them — finally bridging the gap between Web and app. It’s invading Apple iOS’ and Google Android’s territory, providing the cross-application linkages that have always unequivocally been the job of an operating system.

Increasingly, Facebook has the opportunity to wire consumers, applications, data and devices together. But for Facebook to do this, Mark Zuckerberg will need the kind of imagination that Steve Jobs had. Indeed, Zuckerberg will have to imagine a whole new ecosystem, this time one where Facebook facilitates all connectivity. He’s proven he can execute already. But can he take on a vision this big?

Google (GOOG): “What got you here won’t get you there.”
This trademark phrase from Wetpaint COO Rob Grady is particularly apt in Google’s case. Google is the undisputed king of finding answers to questions — as long as they’re being asked from desktop and laptop computers. But when it comes to applying its great search strength to mobile environments, tablet devices and communications, Google is still lost. While the Android operating system is clearly one of the winners, it doesn’t give Google the essential financial success in mobile that it has on the desktop. Google needs to reinvent itself. It needs to make a bold “burn-the-bridges” move, adopting a Reed Hastings-like philosophy that the company cannot rely on search alone. Only, in Google’s case, it’s even harder.

Here’s why: Hastings had already clearly identified the next wave’s product at Netflix (NFLX) — streaming video over the Internet — but Google has to find a new vision altogether. This is not to say that Google needs to exit the search market by any means. But, instead, it must reinvent its own search portfolio, the way Intel (INTC) reinvented the microprocessor generation after generation, always allowing its newest chip to put the last one out of business, before the competition did. Indeed, Intel’s sustained success was built, in part, on destroying what worked and replacing it with something that worked even better. Google’s new vision should surely have three components: mobile, search and social. The good news is that, thanks to Android, Google already has A+ platforms to build on the first two.

But search needs to get beyond the query box, and the mobile device can be more than a phone plus PDA. Google’s challenge — and its opportunity — is to reinvent it as a completely connected device that is woven into the fabric of daily living. It should know where I am, who I’m with, and what I’m doing — or at least have some educated guesses. It should make the next interface leap that helps us leave the thumbs behind. And, it should be a digital companion that picks up on environmental cues and helps me live my digital life. Siri has opened our imagination; but Google has amazing voice recognition, algorithmic and platform strength to accomplish these things. Now it sorely needs to understand people. That’s the most pressing — and most problematic — task for Larry Page and his team in 2012.

Amazon (AMZN): Fully bridge digital media and commerce.
If Facebook is the ultimate platform for social connectivity, it’s pretty clear that Amazon should be the ultimate platform for media and commerce. Amazon has already made amazing progress in redefining itself. It started as a bookseller, became a retailer, began representing other retailers and, most importantly, has morphed into a media and device company. And, as if that’s not enough, its Web Services power tons of other companies that make the Internet fascinating.

That said, a scattershot approach won’t help Amazon become the single defining platform that bridges digital media and commerce. Amazon has tremendous assets in its catalogue, in terms of both physical and digital goods. And it also has devices that give it a unique channel to the consumer — for the time being, at least. But to fulfill its true potential, Amazon needs to extend its platform all the way to commercial transactions, wherever they happen.

Beyond digital goods, Amazon should be working on digital currency and customer management; an acquisition of Square would be a tremendous accelerator here, and it would ultimately help Jeff Bezos and his team power transactions wherever in the world they take place. What Facebook is to our social transactions, Amazon should be to our commercial ones — an OS for commerce. Indeed, Amazon has the opportunity to provide OpenTable-like services, for all commerce, not just for the restaurant industry. It’s already got the goods and the customer relationships. <ow it just needs the focus on the bigger opportunity.

Yahoo (YHOO): Decide what the brand really stands for.
On one hand, Yahoo is the most impressive all-digital media company there is. It has tremendous access to a huge audience of consumers, a broad product portfolio, an unrivaled heritage as a first-generation superstar and a unique reach into Asia. And yet, it’s also the most disappointing digital media company in the marketplace, so much so that its brand increasingly stands for nothing in particular to most of its audience.

Of late, attention has been focused on Yahoo from a financial point of view. But whoever eventually buys the company must look beyond integration, splitting and cost cutting. Instead, the acquirer will have to figure out what to do with Yahoo’s core. And it all comes down to one key question: What can Yahoo provide to its audience to earn their attention every day?

To date, the hook has been email. Yahoo Mail is responsible for about 75% of Yahoo’s media traffic. But Yahoo Mail isn’t growing. In the last year, it shrank slightly (<1 %), according to data from comScore. So, for Yahoo, the choices are to innovate in communication to leapfrog Gmail, Skype, and the lot; or else to do the hard work and start figuring out again what Yahoo really stands for. The company has great roots. It has a natural brand for serendipitous discovery, for fun and interesting news to make your day. The bottom line is that Yahoo should be able to execute on both the options listed above, hopefully without waiting for the financial dust to settle.

Washington Post (WPO): Re-inventing media’s most ravaged category.
If we had to name the most ravaged sector of media, it would certainly have to be newspapers. Don Graham recently said the industry is “collapsing.” But, he’s not just watching it happen; he’s actively and energetically intervening. I’ve been incredibly impressed by the way Graham and his team are up for re-inventing the category, especially as I’ve talked to other organizations that are nearly paralyzed. Instead, WaPo is applying the greatest growth trend of the Internet — social media — to its business. With its inordinately valuable and trusted brand at stake in the Washington Post, the risks are clearly high. Rather than acting out of fear, Don and his Chief Digital Officer, Vijay Ravindran, are taking aggressive advantage of opportunities to engage, grow and retain their core audience. At the same time, they’re downshifting to the younger audience that just isn’t buying newspapers. The Washington Post Social Reader is the flagship example, and it’s a bold move to jump ahead of the consumer and create a new experience for people that they didn’t know they needed, all on the social Web. [Full disclosure: My company Wetpaint works with the Post.]

We will see other awesome and amazing talents emerge in digital media over the next decade. These greats-in-the-making will help build on the staggering changes that technological change has wrought.

Why We’re Not Using Google+ To Reach Consumers – So Far

26 Oct
2011

by Ben Elowitz

This article was recently published as a guest post at GeekWire, and is republished here for DigitalQuarters readers.

Since Google+ launched in June of this year, two questions have been on everyone’s mind in the digital community:  1) Can it become a huge success for Google? And 2) Can I use it to make huge success for me?

Much has been written about the first question; but very little about the second.

And so, because we’re obsessive about knowing the social Web, my colleagues and I at Wetpaint have looked long and hard at the second (and unanswered) question.

After a good deal of analysis, I can report that the answer for us as a media company (so far, at least) is “no.”

Here’s what we’ve found:

The lights are on, but no one is home – Google has been quick to point out that 40 million users have “signed up” for Google+. That’s because the product is deeply bolted onto every product inside the Google empire, including Gmail, and they did a nice job of making it easy to invite everyone you know. People checked it out, but they haven’t been back, and I’d bet their active user rates are in the single digits. Every time I log in, there’s almost zero activity among my “circles.” Even with 40 million, that pales in comparison to the reach of Facebook’s worldwide audience of 800 million (200 million in the U.S.), who are far more active (500M per day!).

Users can manage one social network, and no more – Mainstream users have demonstrated that they reach saturation after managing one social network when it comes to their personal life. First, it was Friendster; then MySpace; now Facebook. People don’t have the time and attention span to manage overlapping networks of friends and conversations.

It doesn’t solve a consumer problem – There hasn’t been a migration to Google+ because it doesn’t solve a real consumer problem. Facebook has an entrenched audience with deeply embedded habits. In order for a migration to take place, Google+ needs to do something massively new that addresses a consumer pain point (which it doesn’t – at least not yet), or Facebook needs to make a massive blunder that drives people away (for example, around privacy, which I don’t think most users really care about).  Overcoming this is even harder for Google, largely because it’s viewed by most as a utility, not a place to facilitate stronger online connections / community.

That said, there are a few things I’ll be watching as Google+ moves ahead in the short term:

Influencers – The people who are using Google+ now (the single digits mentioned above) are industry influencers / luminaries / connectors.  They’re using it as a less restricted version of Twitter, because Google+ can share longer, deeper messages than 140 characters will allow. I’ll be curious to see if there’s a migration of these folks from Twitter to Google+. I tend to doubt it, however.

Business pages – Google has encouraged businesses and brands to sit on the sidelines until they release business pages as part of Google+ later this year. These are akin to “fan pages” on Facebook. If these solve a new consumer problem, then they could trigger some migration. But, again, I attach low odds to this possibility.

Search impact – The most convincing argument for embracing Google+ is its potential impact on search. It’s too early to say, but there is speculation that Google will tune its search algorithms to overweight those who “perform” well with Google+. For example, if a brand gets lots of +1’s (Google’s version of the “like” button), then that brand’s share of search volume could be dramatically increased to encourage broader adoption of content providers. This is something I’ll be evaluating after business pages launch, which should take place before the end of the year.

There is no question that the crew at Google is brilliant.  And they will clearly be looking to improve their service for consumers and make it relevant as a premier social operating system for the Web.  But what I will be watching is whether they can solve these core issues to make it a must-have for consumers.  And, if they do, then it will become a must-have for publishers as well.

Prediction: Facebook Will Enter the Search Market Next Year

26 Aug
2011

by Ben Elowitz

This article was recently featured as a guest post at TechCrunch.

Next year, search advertising will be a $15 billion market in the U.S. alone, growing by 14 percent, according to eMarketer.  And, if Facebook can capture half the share of that market that Google has today, it could easily add an extra $25 billion or even far more to its value.

For most any CEO who could have even a modest chance of succeeding at it, that payoff would be reason enough to take a serious look at entering the search category.  And yet, while I’m sure he wouldn’t scoff at the extra revenues, profits, or valuation, I suspect that Mark Zuckerberg finds something else far more motivating than just increasing the financial value of his company.

And that’s what will propel him next year to make a completely disruptive entry into the search category.

So if it’s not for the financial value, then why am I so certain that Mark Z. will make a play for Google’s home turf?

It’s because it’s so irresistibly good for his users.  And that’s the most important principle that seems to guide his product development.

 

The Five Reasons For Facebook To Enter Search

With that in mind, here are the five specific reasons why Facebook should enter search next year:

1)      To make Facebook the ultimate home page. Consumers make Facebook their home base.  Half log in every day; and users come to Facebook 70 percent more times per day than even to Google. They stay twice as long as even users of Yahoo’s vast network of email, content, and more.  Facebook has become the Connected Web’s de facto operating system.  But right now, its “start button” is limited to what other people put in your newsfeed.  Part of being home base is being a launching pad to go anywhere you want.  So Zuckerberg will need to give users a great connection to the rest of the Web – whatever their intent.

2)      To fix a broken feature. Facebook has a search feature today (powered by Bing); and a few people already use it for Web-wide search, even though it isn’t very good.  It needs significant upgrading, and Zuckerberg knows it.  Having a feature this important be this incomplete creates an unacceptable user experience.  It must be fixed.

3)      To improve people’s life online. Facebook has an enormous data set that it can use to deliver better search results than anyone on the planet.  Facebook can see everything that Google can see in terms of pages and links, but with a whole extra dimension of human connection that is impenetrable to Google.  Facebook knows what your friends like, and what people like you like.  And it knows the difference between real interest and spam.  Translating that knowledge into great results will improve online life for his users.

4)      To fully connect the world. More than anything, Zuckerberg and his company’s DNA are all about providing services to connect users to each other and, increasingly, to the world at large.  Serendipity and sharing aren’t enough: sometimes people know what they want to find.  Facebook must have a search feature to fully enable connection.

5)      To add to his immense data set. Search will not only help users; its users will help Facebook. Specifically, it will provide Facebook with even more data about what people want so Facebook can further personalize itself for everyone.   Go ahead and cue the creepy privacy music, but remember that so far most users have been happy to make a privacy tradeoff to get valuable personalized service.

With Facebook Connect, Open Graph, and Like buttons, Facebook has already shown its vision to fully connect to the rest of the Web. The next step is to help people better access it.

 

Facebook: The Social Operating System For Connected Lives

Facebook began as a social application, but it’s now in the process of becoming a Social Operating System for the Web at large.  Offering world-class search is the next step in its evolution as that “Social OS.”  The Web is now organized around connected people, not documents – and Facebook is the OS that links those people together.

Once fully connected, can you imagine how Zuckerberg must think about a Web all wired-in through Facebook’s central hub?  He’d know the time spent on every page; the usefulness of every link; the patterns of every user.  He’d have a real-time system that provides feedback on every recommendation.  You know what’s cooler than a billion connections on the Web?  How about a quadrillion!

The value of that data will be immense in making recommendations to users, serving advertisers, refining search itself, and enabling next-generation social applications.  It will give Facebook a competitive advantage over every other Internet company in building a map of where the gold is buried – in the form of the content each individual user wants – among the trillions of pages on the Web.  But more importantly, it will allow Zuckerberg to serve his users.

 

“Social Search” Is More Than Just Links From Your Friends

The idea of a socially-powered search is not brand new for Facebook.  Bing and Blekko have both incorporated features that bring your friends’ Facebook content into the search results.  And while that is one modest way to improve the search, its impact pales in comparison to the full potential of what Facebook can do to help you by fully exploiting its social data set:  It can individualize search results just for you, by using not only data about you and your friends, but by using the full dataset of people you haven’t even met yet.

Let’s look at it competitively.  Google and Bing have, with limited exceptions, held themselves to the standard that the results should be the same for everyone because they work in an anonymous environment.  A friend from Microsoft tells me that Bing has a rule that, with the exception of bucket tests, the top ranked result must be the same for everyone.  This rule, he says, was copied from Google – where it fits well with Google’s increasing positioning of itself as the great defender of identity control, compared to Facebook’s ethos where everything is public.  But that differentiation hands Facebook an incredible opportunity:  in the Facebook environment, it’s not only accepted but expected that everything you do is customized for you alone.

Can you imagine the power of combining Amazon-like personalization with Facebook’s deep dataset to offer better results?

 

Facebook Can Redefine Search in a Social World

That’s why beyond just improving a search algorithm, Facebook’s greater opportunity is in redefining the category.  The last decade of Web use has been defined by Google’s clean white splash page with a single query field, and the 10 blue links which follow. But just as that approach from Google displaced the prior generation’s directory pages, it’s time for a breakthrough experience.  And Facebook is the natural player to provide it.

I’m sure the engineers at Facebook are already visualizing what search could be in a fully connected world. Searches could be proactive, prompted by items shared by friends, rather than awaiting a text field completion. Searches can favor brands and publications that you like, or your friends like. But most importantly, searches can be predicted based on people like you, people who are located where you are, or people with similar interests, profiles, and behaviors, without you ever even knowing them.  All of these are ways that Facebook can fundamentally redefine search, thanks to its knowledge of each user’s identity, interests, and behaviors.

 

How It Could Happen in 2012

But building a search engine that takes (a difference-making) advantage of the social graph takes lots of time and money, as does building a new operational infrastructure, Web crawler, and advertising engine to support it.  And, even more significantly, this is one where Zuckerberg will need to get the privacy implications right from the start.  Facebook is currently building its rep with major advertisers on its social network – and that’s a great start, because that will provide a captive customer base to transition into its search engine right at launch.

A competitive search engine is one of the most ambitious projects you can imagine – the degree of difficulty is mind-boggling, and the cost is hundreds of millions or more.  For Facebook to best Google, it would need to catch up in substantial ways before it could shoot ahead of the leader, even with its valuable dataset. But that’s only an impossible challenge if it has to do it all alone.

And Facebook doesn’t have to.

It already has an alliance with the #2 player in search, Microsoft.  And – in the way of “the enemy of my enemy is my friend” – it has a common interest in outperforming Google.  And Facebook and Microsoft have enough separation between their businesses that they could complement each other rather than compete.  Indeed, Facebook’s increasing strength in its advertising engine could be a huge lift to Bing’s struggling monetization – offering hope of raising Bing’s monetization toward Google’s levels.   The two truly are more valuable together, and it’s no surprise that smart people have begun to speculate on a Bing-Facebook combination, a step beyond a partnership.  Working with Bing for its search entry could save Facebook billions of dollars of initial R&D and speed its entry into the category by years – and by many dozens of engineers.   And any agreement they’d sign would likely still give Facebook the option to create its own search engine down the road.

 

The Chilling Threat To Facebook’s Enemy

Regardless of how Facebook structures its efforts – and with whatever degree of help it gets from Microsoft – it will be able to create a search capability that will be significantly different from anything we’ve ever seen.  And it will shake the tectonic plates underneath Google’s Mountain View headquarters, even as it vies to earn users’ adoption with better, more personalized results.

Google will not perish in the digital earthquake without a fight, though. Its recent Google+ launch, for example, shows just how boldly Google intends to enter Facebook’s home territory. That, of course, makes it even more imperative for Facebook to counter-invade by pushing into search.

Looking forward, it’s clear that search and social won’t always occupy separate spaces. Indeed, for consumers, over time, they will converge; and the blended (or, just as likely, reimagined) product that emerges will serve as a home base that will serve as a jumping-off point to everything that’s important and relevant on the 21st century Web.

It’s fascinating, and it’s all about to unfold. In the meantime, while Zuckerberg quietly forges ahead, and readies Facebook’s game-changing search entry, Eric Schmidt, Google’s former CEO, is publicly lamenting lost opportunities to catch Facebook. The diverging fortunes of these two digitally defining companies could not be more apparent right now.

Does Search Limit Us?

20 Jun
2011

by Ben Elowitz

I just read a provocative review of a provocative new book – “The Filter Bubble: What the Internet Is Hiding From You,” by Eli Pariser.

The board president of MoveOn.org, Pariser muses about the perils of excessive personalization on the Web. He’s also concerned that technology companies are narrowing our digital experiences.

“Personalization filters,” he writes, “serve up a kind of invisible autopropaganda, indoctrinating us with our own ideas, amplifying our desire for things that are familiar and leaving us oblivious to the dangers lurking in the dark territory of the unknown.”

This point of view echoes that of legal scholar Cass Sunstein, who worried about Internet users getting stuck inside “information cocoons” in his book, “Republic.com.” 

Pariser has a solution for this, and he calls for greater openness and diversity when it comes to search results and recommendations so that unfettered and serendipitous discovery can take place.

My opinion is more intricate. I believe that personalization lives on a spectrum, as opposed to an all-or-nothing scenario. At one end, overdone personalization can produce an unhealthy bubble of self-ignorance as Pariser and Sunstein suggest. But at the other end of the spectrum, where no personalization exists, things are equally bad. The key is determining what’s best for the individual customer experience.

Taking search as an example, the future of personalization is getting the right resources or results to answer your needs as effectively as possible. But personalization doesn’t mean that we have to change the answer. Rather, it means having – and using – much more context about you than what’s available in technology and user interfaces today.

Personalization done well will generate the results you want, without forcing you to sift through the results you would have ignored anyway. And personalization still leaves room to access diversity and alternatives: done right, it will center the bullseye of its results right on your most likely interests; but that doesn’t mean it needs to block out the rest.

In fact, as long as we are interested in diversity, search engines and other content discovery engines will deliver it – because they are in the business of serving our interests. And if they stop doing so, the reason won’t be the technology’s preferences – it will be our own preferences.

In the meantime, the best companies will enable users to have control on the privacy front. And even with those controls, most consumers will almost certainly trade personal information for spot-on content and the right kind of delivery.

So, once again, I come down on the side of Web users. I’m in favor of personalization done well, and I’m all for letting consumers decide for themselves what works and what doesn’t online.

 

How Facebook Can Put Google Out of Business

3 Jun
2011

by Ben Elowitz

This article originally appeared as a feature on TechCrunch.

I was surprised to hear former Google CEO Eric Schmidt publicly lament lost opportunities and missed chances to catch Facebook the other day.

I used to envy Google and the vast digital empire that Schmidt commanded.  Google had one of the most intricate monopolies of all time. It had the most impressive dataset the world had ever seen; the most sophisticated algorithm to make sense of it; an audience of a billion users expressing their interest; and more than a million advertisers bidding furiously to reach those consumers at just the right moment.

What’s more, it had captured the ultimate prize: increasing returns to scale. Only Google could spread such huge R&D costs among an even more humongous query volume, all while offering advertisers the chance to reach most of the population with one buy. Google had earned its success.

It competed on being smarter.

It was.

And it won.

Google’s business strength was simply taken for granted; so much so that even deep-pocketed competitors like Yahoo and Microsoft stopped trying to outdo Google’s massive scale and core algorithmic know-how.

And that’s why I used to think that Google was unstoppable.

Until I realized one very important thing: despite the fact that Google goes to great lengths to keep its index fresh by indexing pages that often change every hour, or even every few minutes, and despite its efforts at realtime search (including searching the Twitter firehose), its dominant dataset is dead, while the Web is—each day more so than the last—vibrantly and energetically alive.

Indeed, Google’s revered and unparalleled dataset is increasingly dating itself as an ossified relic akin to the Dead Sea Scrolls—outshined by the freshness of the living, breathing organism that is the social Web.

Like dusty and determined archaeologists, Google’s massive bots crawl the Web looking for the artifacts of digital civilization. And what they find is fossils—in the form of pages and links: the leave-behinds of writers, contributors, and casual end-users who have deposited traces of themselves in the skinny crevices and dark recesses of the Internet. Google analyzes these remains, and yet it has almost no first-hand knowledge of any of the users who created this content—or those who are searching for it.

Enter Facebook.

Since its founding in 2004, Facebook has focused on enabling social connections, not on search. And yet, in the process, Facebook has created a platform that knows more than 600 million people, complete with identity, interests, and activities online. The company’s relentless and organic expansion—from an application to an emergent social operating system—has enabled it to know its users, not only on the Facebook.com domain, but also on other sites, as they travel throughout the Internet.

While Google has amassed an incredible database consisting of the fossilized linkages between most Web pages on the planet, Facebook possesses an asset that’s far more valuable—the realtime linkages between real people and the Web.

What does this mean, and what are the implications here?

Well, in a nutshell, Facebook has stored a treasure trove of distinctive data that, if fully utilized, could put Google out of business.

Yes, put Google out of business.

Here’s why.

Facebook’s data allows it to do more than just guess what its customers might be interested in; the company’s data can help it know with greater certainty what its customers are really interested in. And this key difference could potentially give Facebook a tremendous advantage in search when it eventually decides to move in that direction.

If Google’s business has been built on choosing which Web pages, out of all those in the universe, are most likely to appeal to any given (but anonymous) query string, think about this: Facebook already knows, for the most part, which pages appeal to whom—specifically and directly.

And, even more powerfully, Facebook knows each of our individual and collective behavior patterns well enough to predict what we’ll like even without us expressing our intent.

Think of it: Facebook can apply science that is analogous to what Amazon uses to massively increase purchase likelihood by suggesting and responding to every minute interactive cue. Whereas Amazon relies on aggregate behavior, Facebook adds in the intimate patterns of each individual—along with their friends and the behavioral peers they’ve never met all around the world. And each of them is logged in and identified as a real person.

When Google was born, its advantage stemmed from its ability to collect and analyze superior data. While other publishers looked myopically at each page on the Web as a standalone realm, Google found that the link relationships between those pages held more valuable relevance data than the pages themselves. All of a sudden, the isolated views of players like AltaVista and Yahoo began to look one-dimensional. And ownership of what is now the $20-billion-plus search advertising market was cemented.

In the last several weeks, Google has indicated how important Facebook-like social networks are to its still-vast ambitions. One proof point is the launch of the new +1 product; another is the company’s internal announcement that bonuses will be tied to success on the social Web.

It may seem that this is about capturing a new market opportunity. But, trust me, it’s not. In reality, it’s Google’s recognition that Facebook has the same kind of advantage over Google that Google is used to having over its competitors.

And Google is smart to be scared.

Very smart.

But, if the truth be told, it will take far more than +1 to measure up to the whole new human dimension of the Internet. After all, the human organism is home territory for Facebook and utterly foreign turf for Google’s algorithmic machine.

Photo credit: flickr/Ken and Nyetta


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