MarketMe 2.0

Dear Plaxo member,

We are excited to announce some of the biggest news in the history of Plaxo. Plaxo has signed a definitive agreement** to be acquired by Comcast, the nation’s leading provider of entertainment, information and communications products and services. We’ve got at least a few months to go before the acquisition is completed, but we wanted to send you this note to let you know what’s coming up and how it affects you and your account.

Plaxo will remain an independent brand, organization and entity. We’ve been busy at work on our networked address book service and our next-generation social network, Pulse (if it’s been a while, please come back and check out all the new features). And, through additional projects with Comcast, we’ll be able to take these services to a lot more users and places than we could on our own… including the TV, phone and more.

If you’d like to read more about some of the great new things we’re planning, please read our official announcement.

So, what does this mean for current Plaxo members like you? The services you know and enjoy from Plaxo will not only continue to exist, but will also continue to evolve and improve. We will continue to make our basic services free, and we will continue to serve customers in multiple languages across the world. But, we’ll now be able to invest even more in our services, and we will enhance them with more users and more content available across a wider array of devices.

We will also continue to protect your privacy and give you control of your information. We will continue to protect your data with one of the strongest privacy policies, which will remain in effect even after the transition. And, we’ll continue to be a strong advocate for the open social web.

We’ve put together a quick Q&A about your privacy, account and your data.

Last, we’d like to extend an enormous thank you. Whether you’ve been a Plaxo user for a long time or just recently joined Pulse, we’d like to thank you for making Plaxo a vibrant network. We are excited to open a new chapter today and look forward to helping you keep in touch with the people you care about.
Sincerely,
Ben Golub, Chief Executive Officer
Cameron Ring, Founder and Chief Architect
Todd Masonis, Founder and Vice President of Products

**We are not releasing financial details of the transaction. The acquisition is subject to the satisfaction of customary closing conditions and regulatory approvals, and is expected to close in the near future.

This weekend has been a weekend of data portability discussion among a number of blogs. It has become a hot button topic for a few of us. On Saturday, I even turned against some of the data portability evangelists. I still stand by a lot of what I said including the fact that data portability evangelists cannot articulate themselves effectively. Sometimes I can’t articulate myself as well though. We aren’t perfect!

What I’ve come to realize over the past weekend is a number of things:

Data Portability is Inevitable
I am a strong believer in free market economies. They are highly efficient systems and in the end, the consumer usually gets what they want. Currently most users don’t realize that they are supporters of data portability but over the coming months they soon will be. Mike Arrington and the crew on Friday’s Gillmore Gang podcast will not suddenly stop talking about this topic. I won’t either.

Data Portability is Complex
Data portability is not a simple issue. If it was, everybody would be talking about it (well at least more people would be) and we would be further along in the process. Unfortunately the issues are not simple and once you start breaking down the nearly limitless ways that our data can interact, you finally begin to realize the scope of the project.

Data Portability Means Money
There will be an entire industry based around data portability. We have already seen some companies start to pop-up but we have only witnessed the beginning. Companies will race to acquire partnerships with large business to help them leverage their user base and embrace data portability. In turn, those companies will leverage those partnership agreements as assets during future negotiations.

There is still the whole question of how do we monetize the attention economy most effectively? This is something that Facebook is battling on a daily basis as well as other leading websites. While nobody has figured it out yet, somebody will soon figure out the answer to this billion dollar question. It’s at this point that the insane valuations being placed on attention rich websites will suddenly be justified.

Social Networks Have Value but It’s Not the Data
While there is a substantial amount of value in building up a user base, what’s more important is user attention. Creating systems that effectively drive user attention is critical in being successful on the web. The reality is that no effective monetization system has been designed so far that helps monetize attention. Social network sites are extremely efficient at driving attention.

For now though, social network sites will remain to be the emperor’s new clothes until someone can come up with the monetization solution.

There is A Lot of Work to Do
We are still in the very early stages of social networks and data portability. This is a space which continues to evolve and new thought leaders join the space everyday. What we don’t need is a small group of individuals plotting out how data portability should function. We need a group that can articulate available options effectively without getting in a mud slinging fight with each other.

I believe that this is the point of the Data Portability Workgroup. The changes won’t take place overnight but the changes can’t happen without the involvement of the people. While there are still a lot of problems to be resolved, the discussion is becoming louder and soon enough I think more people will take note.

Social News

AOL has announced that they’ve completed the purchase of Bebo, and as such, formed a new business unit called “People Networks” that combines the social network with AIM, ICQ, and other recently acquired businesses including Yedda and Goowy. Integration plans aren’t overly specific at the moment, but include “[letting] users merge AIM and Bebo profiles so they can use common screen names without re-registering.”

For AOL, this marks attempt #3 (or #4 or #5 if you go back to when AOL was the dominant ISP and everything took place inside AOL’s desktop software) at turning AIM into a major social network. First, there was AOL Journals, which tied blogging community features to AIM. Then came AIMPages, a web-based social network tied to AIM screennames. And now, rather than build something in-house, AOL has spent $850 million and will attempt to integrate AIM with an existing social network that reportedly has more than 40 million users.

I’ve long held the belief that IM is the ultimate social network – if you use it properly, you have your contacts sorted neatly into appropriate groups – colleagues, college buddies, family, etc. You have status updates (away messages), photos (buddy icons), and group options (chat). However, what has long been missing is the networking aspect – there is no easy way for my AIM contacts to see my buddy list and find out who they are, and hence, network. This is what AIM pages tried to do, and what I assume Bebo with AIM/ICQ will attempt to do, by combining a huge Web community with a huge IM community.

The problem is that the opportunity may have passed. The large social networks not only have their own integrated chat options (Facebook Chat and MySpace IM), but they also allow for third-party widgets and applications like Meebo that allow users to have their friends send them an IM directly from the Web. Additionally, IM as a medium now has a lot of competitors – private messaging on the social networks, free/low-cost calling via VoIP, and microblogging services like Twitter. Are there really tens of millions of AIM users out there who aren’t yet on Facebook or MySpace? That seems to be what AOL/Bebo is banking on.

As AOL alludes to in their press release this morning, there are lots of other cross-marketing opportunities across the AOL network that will provide ample opportunity to drive further adoption of Bebo. But my feeling is the “power AIM” users who would be interested in integration with a social network are already on Facebook or MySpace, and unlikely to switch just for the marginal advantage of having your screenname and social networking username one and the same.

A social network built around an instant messaging network was a great idea five years ago (and still a good idea two years ago when AOL launched AIMPages), but at this stage in the game, I have my doubts.

Mashable

Last week Facebook said that they would no longer support Google Friend Connect. Apparently there were a number of disputes between Google and Facebook behind the scenes but publicly Facebook claims that they won’t support Google Friend Connect due to privacy concerns. The reality is that it’s business strategy. Ultimately the new Google Friend Connect service acts as an intermediary between social networks and external social applications that reside on third-party websites.

It’s a great notion but the reality is that is reduces the ability of Facebook to track what is taking place on external sites. Tracking the applications on third-party websites is one of the most import features of Facebook Connect. Additionally, applications can update the Facebook newsfeed in turn helping those applications promote external websites. Facebook’s support of Google’s new standard will prevent information from being tracked via the Facebook newsfeed.

While it’s in the user’s best interest to be able to export their friends to other sites, it’s not in Facebook’s best interest to let you do that without them knowing. Why? Well if you go and use your data to participate in other activities around the web, Facebook isn’t able to keep track and in turn their newsfeed can be accurately updated. Is all information about your social interactions going to travel through Facebook?

Not necessarily but as Friend Wilson pointed out yesterday, it’s not the data, “it’s the flow of the data through the service.” If Facebook opens up to Google Friend Connect, it means that social activities will take place on the web under the approval of Facebook but without Facebook’s knowledge of what’s happening. We surely can’t have that happening!

Sure, people have figured out ways to export Facebook’s friend data but it requires a hack and is not technically allowed under Facebook’s terms of service. If you can figure out a way to get that data from Facebook, great! Facebook doesn’t want to openly let other people use data provided by its users to have interactions not under their control.

It’s an ironic position. Facebook opened up their platform and gave developers an almost equal opportunity to compete for user attention. They are about to do this for applications residing on third-party websites as well. In my opinion, Facebook’s concerned that opening up the data completely will somehow reduce their valuation. What I’ve come to realize over the weekend is that it doesn’t. We live in the attention economy and even if Facebook completely opens up, they will still have our attention.

That’s because as Fred Wilson puts it, “provides an incredibly valuable service.” The challenge that Facebook faces is one that many other sites (such as Twitter) face. How do we effectively monetize attention? The television used to place ads in between our television shows but that won’t work in an on demand world. I can’t believe I’m saying this but Facebook may turn out to be the emperor with no clothes.

Facebook has created one of the most valuable communication platforms on the web (outside of their horrific messaging system). This has led them to become one of the leading sites on the web globally. They still face the problem that many other web-based social services face: how do you monetize social? Earlier this weekend I argued that data portability kills social network sites. The reality is that it doesn’t, it just strips of those sites clothes.

That’s the only reason Facebook isn’t going to jump in and embrace total data portability. Would you strip naked for the world to see if you didn’t have to?

AllFacebook

Nick O’Neill over at AllFacebook reports that Robert Scoble has posted an interesting yet somewhat off the wall post suggesting that once Microsoft acquires Yahoo’s search technology, they will then acquire Facebook for $15 to $20 billion. The acquisition of Facebook has already been discussed among a number of people previously but Robert’s rationale seems a little bit ludicrous.

Why does Robert thing that Microsoft will buy Facebook? Simply because Google can’t currently crawl through Facebook’s website. Facebook can then use Yahoo’s search technology to search within Facebook once it has both groups under its control. While the combined forces makes sense, this is an old way of thinking.

Robert suggests that “we will never get an open Web back if these two deals happen.” Are we really going to turn back the clocks and pursue an AOL walled-garden strategy? It has been proven that this model fails and people end up going elsewhere on the web. Why would it suddenly work this time?

Robert’s apparent conclusion is that search is the killer feature missing from Facebook and once it has it, there is no need to open up. Noticing that Robert’s post was made after 4 AM, I think he may have stayed up a little too late while planning Microsoft’s world domination.

Last week Nick O’Neill over at Social Times had the opportunity to speak with Chris Cunningham of AppsSavvy. AppsSavvy is a company based out of New York which focuses on building monetization opportunities for social application developers and building custom branded experiences for companies. They do this by connecting brands with the application developers that have the proper demographics to match up with the client’s campaign.

They have successfully executed campaigns for movie companies, TBS, Adidas and a number of other large organizations. The company is heavily focused on providing sales support for the developers that don’t have the resources to reach out to brands on their own. I have spoken on a number of panels where I emphasized that the best ROI for application developers will come from reaching out directly to brands rather than relying on the traditional CPM model that most developers are currently relying on.

AppsSavvy is surprisingly the only company which is currently focused on providing branded campaigns for clients. As Chris says during my interview with him, there is currently limitless inventory on Facebook and not all of it is being filled. Companies that are focused on continuously building distribution won’t win in the long run because there are already plenty of distribution channels.

This goes back to the developer dilemma that I spoke about on Wednesday. Chris and the AppsSavvy teaming are helping developers that build valuable applications connect with brands and they have continued to see growth since their company launched. Listen to my podcast with Chris to learn more. I forgot to mention one other thing: Chris and his team are currently seeing average CPMs of $8-$12!

Interview with Chris Cunningham of AppsSavvy [15:37m]: Hide Player | Play in Popup | Download

Social Times

When Data Portability was first announced, it sounded like it would solve what had become one of the biggest problems in the social networking space: a seemingly endless array of new services, each of which required you to setup and maintain your own profile, friend’s list, photo albums, etc. With the support of just about every key player in the industry, Data Portability offered the promise of “being able to access [your] friends and media across all the applications, social networking sites and widgets that implement the design into their systems …” Problem solved, right?

Not quite. At first, it seemed like Data Portability was a lot of hot air, with everyone scrambling to put out a press release and associate themselves with “the open Web,” but offering little in the way of specific plans. But then last week, MySpace announced Data Availability. Finally, there was a real implementation of Data Portability on the horizon, that out of the gates promised us integration with Yahoo, eBay, Photobucket, and Twitter. But then, Facebook announced Facebook Connect. And then, Google announced Friend Connect. Facebook then decided it didn’t like Friend Connect and blocked it. So much for that idea. There’s a word to describe this, and that word begins with cluster and rhymes with duck.

The thing is, as we move to an environment where one profile essentially controls them all, all of the corporate interests want to be THAT profile, and for good reason. If I can make updates to MySpace and keep up with my friends that use it from Facebook, why would I ever login to MySpace if Facebook is my preferred network? In that scenario, MySpace loses page views and revenue, and gains what? Positive PR from a bunch of tech bloggers who push for open standards? Rupert says “No Thank You!”

So, What Are Consumers Left With?

For consumers, there will be marginal benefits from having at least 3 (and probably many more) big players in the social space offering portable profile data. The thing is, similar to what we saw on the application side of things, where developers needed to consider apps for Facebook, OpenSocial, Bebo, etc, developers will now need to consider which social networks they allow users to port data over from. So, if Twitter implements only MySpace Data Availability, but not Facebook Connect, new Twitter users will be out of luck. Of course, they can still do things the old fashioned way and just, you know, create an account.

So, What Does a Developer Choose?

Much like with the social networking application race, if you have the resources, you should support every big social network that wants to let you port over their profile data. Your competitors will, and if you don’t, you’ll be left behind in terms of gaining users and seeding your community with valuable data. However, if you don’t have the luxury of building to support every protocol under the sun, your best bet is to go with the one which has the demographics most similar to those you are targeting. Building a new flash widget company? Support MySpace. Building a new site for study abroad students? Support Facebook. You get the idea.

What About The Google?

Although Google might not be a huge player with any one social networking destination site (minus Orkut’s supposed popularity in Brazil and India), they have a huge advantage over everyone else (except maybe Yahoo): accounts. Between Gmail, Google Docs, Google Reader, Google Apps, YouTube, and so on, it won’t be long before just about everyone that’s anyone on the Web has a Google account, either by choice or as required (by an employer).

While you may not implicitly think of Google as a social network, the company has been aggressive (some might even dare say “evil”) with building your contact list behind the scenes, the most obvious example being the way contacts are added to your Gtalk and in turn Google Reader. The company is many magnitudes more mainstream than Facebook, MySpace, or any other social network could ever hope to be, and hence, as Friend Connect spreads its tentacles (and they will be spreading … 19,000 employees need *something* to do all day), it’s not inconceivable at all to think that the company could in the not-so-distant future be the one that owns your universal profile. After all, who do you think Middle America is more apt to trust? The company consistently voted one of the world’s most respected brands (Google), Rupert Murdoch, or a mysterious company run by mostly twenty-somethings?

So What?

Complicated? Yes, but only to those of us who eat, sleep, and breathe this stuff. The bottom line is we’re not moving towards openness at all, but we are moving towards a more manageable online social presence. The Internet behemoths will slug it out over who we use to manage it, but at the end of the day, there will be plenty of consumer choice and the free market will win – always a good thing in my book.

Mashable

There has been a ton of discussion surrounding data portability in light of Facebook’s decision to bow out of Google Friend Connect and go it alone with their own service. Mike Arrington accurately argues that data portability is the new walled garden. The current race for social networks is to open up their platforms so that they become the “centralized me”; a central control panel that enables me to distribute my information to other places on the web.

What Does This Mean?
While you may look at what is currently going on with social networks and think to yourself that none of this matters to your business, the reality is that it does. It has far reaching implications once all of these details are worked out. The battle that is taking place between social networks and users is the same battle that will be taking place between businesses and consumers. Right now the users are consumers and the social networks are the businesses.

What is being played out is the future of a consumer’s interaction with that business. In the future I want to be able to walk into a store and the sales people and computers in that store to know who I am. Why do I want this? Well, I want a better sales experience. Once I leave the store though, I don’t want that store to be able to contact me or store any of my personal information.

At the least, if they have a way to contact me, I want to be able to have the control to turn off their ability to contact me in the future.

The Conflict of Interests
While some businesses may live by the motto “the consumer is always right”, traditional businesses do not want to give up what was previously ownership of consumer data in perpetuity. The old sales model was to figure out a way to incentivize you to provide as much personal data as possible. The best example I can think of is the old boxes they used to put in restaurants that tell you to “fill out this form and get a chance at a trip around the world.”

Within days somebody would contact you and try to sell you a timeshare. Depending on what you said to the sales representative, your information would go into different stacks on their desk: hot lead, warm lead, cold lead. Would they trash the lead? Definitely not! A cold lead is always better than no leads at all. This is business. This is sales.

Contrast this with data portability. Imagine those leads simply disappearing off the sales representative’s desk because the consumer simply want s their data back. That means that the consumer has control over the sales cycle, not the sales team.

Data Portability Removes the Incentive
One of the primary reasons that you enter your personal information on Facebook or any other website is because it helps to provide a more custom tailored experience that’s personal to you. What Facebook Connect, MySpace Data Availability and Google Friend Connect does is enable some of your experience to be custom tailored without having to register.

This means that the incentive for a user to register is reduced substantially because they don’t need to register for your site to have a personalized experience. This is great for Facebook and MySpace because they become the center of your identity and get to own your most personal data no matter what. Google gets access to some of this data by default through their Friend Connect service.

While these new systems are great for organization’s sake, they don’t really help out the businesses that you currently interact with. Companies now need to try harder to get your personal information. While you could argue that the businesses still win because they get page views which help them earn more advertising dollars, the reality is that not all businesses simply make money from you visiting their website.

At some point you need to register because registering helps that company build their database and get value from the user. Could you see a sales guy who’s stack of leads starts disappearing from his desk because the users “wanted their data back”? That’s what data portability provides. While it makes a lot of sense for the consumer, it doesn’t make much sense for the business and that’s why businesses don’t want it to happen.

A Counter-Argument
While walking around a mall you can always walk into a store, take a look and walk out without ever having to interact with a sales staff again. On the internet you frequently are forced into registering for a site without being able to take a walk around and check out the goods. The new services provided by Facebook, MySpace and Google all help the consumer by enabling you to have a custom experience on the website without registering.

In essence you are checking out the goods before you buy. This empowers the consumer and it’s good for both parties. The business also gets access to data that they previously wouldn’t have had access to. At least now they can know who’s visiting their site (or store) while they’re visiting.

Conclusion
All consumers will one day have the power to control what businesses get access to what data.  Right now, Facebook, MySpace and Google are battling to be the companies that enable you to control that data. While this isn’t true data portability it is a step in the right discussion and at least the debate is taking place.

While you don’t need to be part of the discussion, it is a good idea to be part of it because one day data portability will be impacting your business no matter what type of presence your business has (virtual or physical).

Social Times

Yesterday afternoon Facebook announced that they would be leaving Facebook Friend Connect due to privacy issues. Ultimately the post sounded as though Facebook was concerned about users putting their personal data at risk. Well, Google has sent us a statement in light of Facebook’s decision:

We’re disappointed that Facebook disabled their users’ ability to use Friend Connect with their Facebook friends. We want to help you understand a bit more about what’s going on on the Friend Connect side with respect to users’ information.

User privacy is of the utmost importance, and Friend Connect was designed to strongly preserve it. The larger issue here is users’ control of their data. People find the relationships they’ve built on social networks really valuable, and they want the option of bringing those friends with them elsewhere on the web. Google Friend Connect is designed to keep users fully in control of their information at all times. Users choose what social networks to link their Friend Connect account to. (They can just as easily unlink it.) We never handle passwords from other sites, we never store social graph data from other sites, and we never pass users’ social network IDs to Friend Connected sites or applications.

For example, here’s what an application running on a Friend Connected site can access about a user, Joe, who has linked in his hi5 account:

7547238438 joe [picture] 9438265867 8348357012

Translation: Not much. A third party app has access to:
- Your Google Friend Connect ID. This is a number. It is not a name, and it is not your hi5 ID.
- Your friendly name that you entered into Friend Connect (or from hi5 if you didn’t).
- Your photo. And only if you’ve chosen to make that photo public on hi5.
- The Google Friend Connect IDs of any of your hi5 friends who are also members of this site. (NOT all of your hi5 friends. Not their hi5 IDs.)

That’s it. These apps have no knowledge of who these friends are. They have no access to additional profile data — yours or your friends’. No idea who else is on your friends list on your social network.

Google’s statement attempts to discount Facebook’s argument that data is insecure. What I think we are witnessing at this point is simply a battle of the PR teams at both companies. Google attempted to make an announcement that included Facebook for the soul purpose of discounting Facebook’s platform and making the playing field appear level.  At this point, it is now completely a PR battle which has been successful so far at generating a lot of buzz. We’ll see how long this lasts.

Surprise! Yahoo doesn’t agree with Carl Icahn’s assessment that “it is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer.” Those were the words used by Icahn in a letter he wrote this morning announcing his intentions to nominate a dissident board of directors at Yahoo’s upcoming annual meeting - presumably one that would be more than willing to accept a new bid from Microsoft.

In a letter/press release issued this afternoon, Yahoo Chairman Roy Bostock defends his company’s decision, writing “we do not believe it is in the best interests of Yahoo! stockholders to allow you and your hand-picked nominees to take control of Yahoo! for the express purpose of trying to force a sale of Yahoo! to a formerly interested buyer who has publicly stated that they have moved on.”

Bostock goes on to give a blow-by-blow account of meetings his company held with Microsoft, and how they arrived at the conclusion that going it alone was a better idea than accepting Microsoft’s $33/share offer. Unfortunately for Bostock and his Yahoo cohorts, it’s doubtful that they will win this battle through a war of words.