Interesting developments in the world of social media in 2012. Just as Facebook prepares for IPO and appears “too big to fail”, it looks like we are witnessing the re-fragmentation of social with some serious new entrants, including interest graphs as a major threat. The question isn’t social graph vs interest graph, Facebook needs the interest graph to make money. But can Facebook merge the two graphs faster than a competitor can build a better interest graph?
Facebook’s social graph now includes almost a billion users. Most of the competing social networks to-date are built on some version of a social graph. But social doesn’t sell… at least not as well as search, or interests (which are related to search – they show intention). Facebook [only] makes somewhere between $4.39 and $5.02 annually per user. Many businesses trying to use Facebook for commerce have written the platform off as a disaster.
David Rogers explains The Fallacy of Social Web 1.0 as follows:
The fundamental stumbling block of the social Web to date is that it has conflated social graphs with interest graphs. But in reality, who you know does not always translate into what you will like.
For example, I have a particular taste in movies. But I do not share that same taste with most of the people whom I have friended on Facebook – a motley mix of high school classmates, work colleagues, PTA committee members, and fellow jazz buffs. Nor do we, as a large and heterogeneous group, all share the same taste in travel, or fashion, or much of anything else. So when Facebook attempts to improve my movie-viewing experience by revealing the tastes of everyone in my entire social graph, the value to me is quite low.
Facebook’s founder Mark Zuckerberg recently announced in a letter to prospective shareholders that:
“Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected… We hope to strengthen how people relate to each other.”
Perhaps Facebook’s founder is concerned with connecting people, as the company’s S-1 letter suggests, but prospective shareholders are banking on a more profitable outcome. Facebook clearly understands that a social graph without an interest graph is much less valuable. Facebook added “interests” into the mix in late 2007 when they introduced brand Pages. However, all the “social” stuff still gets in the way of generating revenue. Businesses on Facebook are competing for attention in the newsfeed with friends — friends are winning. Most Facebook Pages only reach 2-8% of fans in the newsfeed.
Facebook recently announced a revised ad program where the advertiser — as a Facebook Page — creates organic content in the form of Page posts and then amplifies the message by paying for more reach in the newsfeed. Facebook is trying to mesh social with interest seamlessly. This is not an easy thing to do, time will tell if users love or loathe a newsfeed with paid messages.
Why all the “social” foreplay… just get straight to the interest graph.
well… this is partly where the re-fragmentation is taking place. Pinterest, the wunderkind on the social media block, offers an interest graph unfiltered. How will they monetize? They already do… with affiliate links. From a business perspective, this appears to be a better platform for lead generation and discovery (all that top of the funnel stuff) as social noise takes a back seat. To be continued…
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