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Prying Open the Social Graph

Technology buzzwords come and go…virtualization, green, SaaS…and after sitting through the Google Friend Connect announcement, reading about Facebook’s Connect service and writing about last week’s MySpace Data Availability launch, “open” appears to be just the latest. But open is one of those words whose definition can be spun into a variety of meanings.

While Facebook isn’t yet releasing much detail on its efforts and may completely surprise me, Google’s Friend Connect program today highlights how open standards such as OpenID, OAuth and OpenSocial can be used to create a platform that’s pretty closed. The service, which will launch tonight and only expects to have between 12 and 24 sites participating while it’s in preview mode over the next few months, will allow site publishers to put some code on their sites. If a user visits a site with the appropriate code, she can get access, via an IFrame, to applications built in OpenSocial. A user can also share her activities on a participating site with her contacts, as well as through her news feeds on participating social networking sites.

Last week, I pointed out that MySpace’s Data Availability efforts were welcome in that they expand the number of sites on which a user can use her MySpace data, but that MySpace still had a lock on the user data since it hosted and determined who could display that data by approving site partners. If MySpace’s efforts were three steps forward in opening up user profiles, then Google’s Friend Connect represents two steps back.

The use of the IFrame means that site owners have no way to change or work with user data, they can only display it. MySpace doesn’t allow sites to store user data on anyone’s servers other than its own, but it does allow that data to be used directly in the outside site. For more differences among the three services, please check out the chart below.

While none of these services are entirely open yet — and may never be, given security and data abuse problems — the trend toward a more social web is clear. With broadband more prevalent than ever and voice fading as the primary means of communicating with people who aren’t in the room, enabling a truly open social web is the next big step in communication. But in order for that to happen, the user needs to be able to reach across walled gardens and gain granular control as to what he or she shares and with whom.

There’s open source (really open in that anyone with knowledge can participate in how the code evolves), open standards (open only in that anyone can participate using a pre-defined version of the standard), and open APIs (open in that anyone can take the pre-defined standard and build something for a closed platform such as Facebook). Knowing this, the efforts to open up a user’s data on a social network (their social graph, if you will) by these three companies falls somewhere between an open platform and an open standard.

Facebook Connect (not launched yet) Google Friend Connect MySpace Data Availability Standards Used Social Data That’s Shared Getting Access to the Data Time Frame Launch Partners Where Data is stored and displayed Privacy
unknown, but Facebook API is likely OAuth, OpenID, OpenSocial OAuth
basic profile information, profile picture, friends, photos, events, groups Applications built with OpenSocial, contacts, activities on participating sites published back to a news feed Profiles, friends, photos and videos
unknown Web site owners must apply to Google and be accepted Web site owners must agree to MySpace terms and conditions, but MySpace will allow anyone who doesn’t abuse the user data to participate
will launch within a few weeks First 12-24 sites will go live in the next few days and the rest of the web will take a few more months Launched on May 8 and adding more partners within the next few weeks
unannounced Plaxo, Orkut, Hi5 and Facebook Yahoo!, Twitter, eBay and Photobucket
unannounced On Google servers and displayed only via an iFrame On MySpace Servers, but can be displayed however the participating site wishes
A user’s privacy settings will follow him around the web Users opt in to Friend Connect and can limit their profile sharing to existing contacts only; a user can elect on which sites he wants to share his activities, can also instantly change privacy settings across all participating sites Users can control their privacy settings (right now, only which sites get access to their data) on a central page. Partner sites must accept changes in real time and sharing profile data is an opt-in service

Technology-News: GigaOm

Who Will Cache in on Cloud Storage?

As data moves into the cloud, storage companies are taking advantage of virtualization and adding more memory to the data center. Techniques such as storage virtualization can improve the usage of existing storage hardware and make provisioning easier, while adding memory to the data center can make accessing information faster.

Many companies are evaluating their use of memory in the data center as they try to strike a balance between easily accessible cache memory powered by flash and slower-to-access disk memory powered by hard drives. At the same time, they’re trying to make their storage easier to provision and more reliable by looking at some form of virtualization. Both trends will change the dynamic for large storage vendors in the years to come.

As you move along the storage technology continuum, you’re trading price for speed. Getting information stored on tape, which is cheap, can take hours or days while accessing something on flash, which costs a pretty penny, takes microseconds. Plus, solid-state drives using flash can’t possibly store all of the data people are creating. There’s also the question of how reliable it is.

Given this, most companies requiring huge storage arrays rely on expensive machines from the likes of EMC or HP. Or they make their own “storage cloud” using commodity disk drives and a proprietary layer of software. By allowing companies to allocate and provision the storage in a software layer, it virtualizes the storage array. It’s essentially the same model that underpins the storage services offered by Amazon S3 and Nirvanix.

Meanwhile, tier-one storage equipment vendors companies such as EMC, IBM and HP have recognized that cloud storage is the future of computing, and are attempting to ride that wave without cannibalizing their high-margin box business. For example, EMC is offering services for SMBs through its Mozy acquisition. IBM last year purchased XIV, which makes the software that can be used to virtualize storage. Large companies such as NetApp and 3Par are attempting virtualize storage as well.

But once the cloud is in place, there’s still the issue of calling up data and delivering it relatively quickly. For certain applications, such as those requiring instantaneous access to large quantities of data like seismic graphing or historical financial analysis, cloud storage may never replace a spinning drive connected to a sever via Fibre Channel.

But for many applications, including media delivery and most application delivery, tweaking storage for the cloud means adding faster cache memory or optimizing the storage infrastructure by geographic location. Nirvanix, the startup providing hosted storage in competition with Amazon’s S3, touts its multiple storage clusters as a way to deliver faster access to stored content. It’s also looking to provide nodes on the customer premise called “NAS heads” that will basically allow for frequently called up “hot data” to be stored there.

Alternatively, or possibly in conjunction with such a setup, a customer interested in amping up the speed of cloud storage might buy equipment from startups providing different levels of cache to aid in hasty data retrieval. We’ve covered some before, such as Atrato, which actually offers a box of disks attached to a controller that runs software designed to access and configure the hundreds of spinning disks. The result is the reliability of spinning disks with a faster information retrieval speed. Others that rely strictly on intelligently routing needed data to cache included Gear6 and Xiotech Corp.

Storage being served via the cloud is a forgone conclusion. It only remains to be seen if a startup like Nirvanix can grow to compete with the big players in storage or hosted computing, and how the larger storage vendors will walk the line of creating cloud products without jeopardizing their hardware business.

A far more interesting trend to watch will be how the growing amount of stored data is kept and delivered in the fastest amount of time. For proof that storage is relevant check out Facebook’s hardware. A little more than 8% of their servers are devoted to the distributed caching system, memcached. The entire purpose of those servers is to speed delivery of information for the social network. In this age of instant gratification, we may find that cache is king.

Technology-News: GigaOm

GigaOM Interview: Mark Zuckerberg, Founder & CEO Facebook

After the debacle of yesterday’s on-stage interview with Mark Zuckerberg at South By Southwest, I decided to take myself out of the process as much as possible by offering up a Q&A. The results below are heavily edited excerpts from my conversation with the Facebook CEO. Instead of grilling him too much about monetization and the company’s $15 billion valuation, we spent most of the time talking about infrastructure, scaling Facebook’s architecture and what the ad platform is going to look like. And I’ll tell you right now: When I asked about money, my questions were quickly shot down.

ME: What does the Facebook infrastructure look like right now as it supports more than 67 million users?

ZUCKERBERG: I can’t talk about the number of servers specifically, but I can say it’s not on the order of hundreds of thousands yet; it’s in the order of tens of thousands. Would you like to talk about how the architecture has evolved over time?

It’s pretty fascinating to see that the evolution of the network architecture pretty much reflects the evolution of the site. When we were in a few colleges one of the theories there was that most of the people would want to talk to people at their own schools, so we set up a network architecture based on the school. We had a Harvard database and web server and routed traffic to them through sub-domains. As time went on, and we reached a reasonable scale, we had to break out into tiered services.

In mid-2005 or so we also started relying heavily on memcached, and today it’s become such an important part of our infrastructure that we’ve actually become the head developers on one of the branches of the code.

At this point in Facebook we’re now running our networks and have multiple data centers across the country, one on the West Coast and one on the East Coast. So we’re working on problems of reducing latency in transferring data from one to the other.

ME: So as you expand internationally will Facebook need an international data center? When?

ZUCKERBERG: That will be something at some point.

ME: Do the applications running on Facebook affect the network? How much of that does Facebook need to support?

ZUCKERBERG: We have an API tier that serves the data requests, but the same servers serve the requests generated inside of Facebook and those form outside of Facebook. We’re trying to blur the boundaries of content created inside Facebook and applications created outside Facebook, and that’s reflected in the architecture.

ME: What challenges will you guys need to address as you scale?

ZUCKERBERG: We put a ton of focus into making sure going forward that our development speed will be very fast. But you know the phrase, “Premature optimization is the root of all evil”? If we spend our time trying to optimize our architecture it could end up being one that’s difficult to develop on and going forward, a big focus for us is making sure that’s not the case.

One of the recent places is internationalization. The infrastructure to do that is pretty fascinating but it has the potential to slow down future development as people ask if they need to develop an application in another language first, so we’ve basically built a wrapper for every string of text and the developer puts a wrapper around that text and we send it to users to translate. So that doesn’t slow down the development speed.

ME: How do you handle quality control?

ZUCKERBERG: In the three cases we’ve done so far (Spanish, German and French), the quality of the translations that we got was actually better. If you wanted to get professional translators it wouldn’t be scalable.

ME: Let’s talk about monetization. You said yesterday that you envision the social advertising landscape evolving over the next 10…15…20 years. How will those ads evolve and when will we start seeing aspects of them on Facebook? And where does Beacon, which you said wasn’t an ad effort, fall into this?

ZUCKERBERG: Beacon was a part of the platform. It was part of this while effort to blur the boundaries between what’s inside Facebook and what’s outside Facebook. Beacon was our first cut at a protocol to do that.

When it comes to social ads we really want to line up what people are trying to do on Facebook and the utility it offers with monetization. If you look at what people are trying to do on the site, it’s communicating and connecting with each other and sharing information, so the business model should be around people sharing information and staying connected.

In banner advertising, people who have developed a trust with the audience run a banner ad and the trust bleeds over to the ad so people pay attention to it.

ME:(making a skeptical face.)

ZUCKERBERG: What? You look like something’s wrong? People go to a content site to see a specific kind of content and will trust those ads relate somehow to it. On Facebook, people aren’t coming to see content from Facebook; they’re coming to see what other people are sharing, so the most natural analog would be having the ads be information shared among the people. Because so much of our society has some commercial component it seems like there will be a way to both share information and line that up with what advertisers want.

Some amount is happening as advertisers pay to accelerate that distribution of information. The amount they’d be willing to pay is proportional to how much it is accelerated.

ME: And before we leave I wanted to ask about revenue and the fact that you mentioned yesterday that you are operating at breakeven.

ZUCKERBERG: I said we’re operating around breakeven. In the past we’ve run at sometimes more and sometimes less, but as a private company we don’t disclose those numbers. A lot of people ask us what we’re going to do with that Microsoft money, but we have no specific purpose for it. We didn’t take that money to buy something.

Technology-News: GigaOm

Two Tech Events, Two Different Worlds

This Friday marks the beginning of South by Southwest in Austin, starting with the Interactive Festival. Every year, geeks galore descend on my hometown, only to be replaced by filmmakers and then musicians. The geeks are my favorites, but you knew I’d say that.

As a reporter I look forward to the event, and as a resident I bemoan the lack of parking downtown, the full restaurants and the deluge of hipsters alternately making plans to move here or dissing the place for its provincialism. This year’s interactive lineup has an impressive array of companies who have built their business on the web, from Yahoo and Google to startups such as Facebook and MOG.

And 1,700 miles away in the colder climate of Philadelphia, about 1,200 network engineers will gather to perform the less-celebrated task of making sure the Internet keeps humming along. The Internet Engineering Task Force is holding one of its thrice-annual meetings to talk about the transition to IPv6, the problem of building faster routers when there’s ever more routing information to take into consideration, and a host of other issues relating to the core of the Internet.

Listening to Jari Arkko, an area director for the IETF, talk about the goals at this IETF meeting, it struck me how much the Internet has changed technology. I’m very much a hardware geek, in love with data center infrastructure, networking and chips, so I am now amazed at what a technology company can do without this level of engineering.

In the early days of the Internet, many of these technology firms had to at least figure out their data center architectures and how they would deliver and support their online shopping sites or web auction houses. But thanks to hosted services, that’s less important today. You no longer have to be a techie to start a technology company.

This is great for the billions of people using the Internet to access services and content, and speaks to the maturity of the web. However, it’s important to give credit where credit is due. So while the technology companies attending SXSW are slamming down the drinks and hobnobbing with the digerati, let’s take a moment to toast the engineers who make it all possible. And for those network engineers in Philly, it’s Beer Week up there next week, so sneak out of those plenary sessions and toss one back. Hack into my online bank account, and it’s on me.

Technology-News: GigaOm

Looking Back: A Very Google 2007


googlestock2007.gifLooking back at 2007, we will remember it as a year Google finally grew up and showed its true colors. Sure there was Facebook and all the hoopla around its platform and privacy, but the big story of year was still Google. The Mountain View, Calif.-based company that still gets a majority of its revenues from advertising made moves that would help expand its reach into new markets.

Wireless, Voice and Applications were three areas of major push - and if that meant taking on the telcos, the FCC, Microsoft, Wikipedia and even Facebook, so be it. And along the way it is estimated to add $1.7 billion to its $10 billion or so sales in 2006. No wonder it commands a market capitalization of $217 billion. Here are some of the major developments of a very Google-y 2007.

Technology-News: GigaOm

Zuckerberg’s Mea Culpa, Not Enough

Update: Frankly, I am myself getting sick and tired of repeating myself about the all-important “information transmission from partner sites” aspect of Beacon. That question remains unanswered in Zuckerberg’s blog post, which upon second read is rather scant on actual privacy information. Here is what he writes:

If you select that you don’t want to share some Beacon actions or if you turn off Beacon, then Facebook won’t store those actions even when partners send them to Facebook.”

So essentially he’s saying the information transmitted won’t be stored but will perhaps be interpreted. Will this happen in real time? If that is the case, then the advertising “optimization” that results from “transmissions” is going to continue. Right!

If they were making massive changes, one would have seen options like “Don’t allow any web sites to send stories to Facebook” or “Don’t track my actions outside of Facebook” in this image below.

facebookprivacy.png

I think Facebook needs to clarify this point further, because currently, despite this mea culpa, I don’t think it’s easy to trust Facebook to do the right thing with the information they continue to collect. You can also share your thoughts on our Facebook Question of the Day Application. (Original post below the fold.)

Facebook founder and CEO Mark Zuckerberg, after taking it on the chin for nearly two weeks, is apologizing about the company’s Beacon advertising platform fiasco. In his blog post, in which he explains his side of the story and rationalizes his reasoning, there is one paragraph which says it all:

We’ve made a lot of mistakes building this feature, but we’ve made even more with how we’ve handled them. We simply did a bad job with this release, and I apologize for it. While I am disappointed with our mistakes, we appreciate all the feedback we have received from our users.

He goes onto say that while he thought Beacon was a great idea, the company might have gone overboard.

The problem with our initial approach of making it an opt-out system instead of opt-in was that if someone forgot to decline to share something, Beacon still went ahead and shared it with their friends.

No shit! I think they tried to push the limits, and got some push back, and that’s that. Regardless, had people not contacted them, as Zuckerberg puts it, they would have gotten away with it.

Instead of acting quickly, we took too long to decide on the right solution. I’m not proud of the way we’ve handled this situation and I know we can do better.

I think this is a good move by Zuckerberg and I hope his team learns from it. This is the second time they have tried to test the limits of their community and gotten some flack for it. It would be better if they asked — they are a social community — and being social means listening and talking with each other first, not after the fact.

Our entire coverage of the Beacon Gate

Technology-News: GigaOm

BeaconGate: Hey Coke, Don’t Just Blame Facebook

Coca-Cola’s decision to pause and rethink their involvement with Facebook’s Beacon advertising program was a big topic of discussion over the weekend in this corner of the Internet we call the blogosphere. It was a particularly shocking reversal given that Coke was one of the landmark partners of Facebook’s new social advertising effort. Coke, to put it bluntly, threw Facebook under the bus, essentially shirking away from their own role in the Beacon controversy, much like 44 other partners who teamed up with Facebook.

“We have adopted a bit of a ‘wait and see’ as far as what we are going to do with Beacon because we are not sure how consumers are going to respond,” Carol Kruse, Coke’s vice president of global interactive marketing, told The New York Times. She thought Beacon was an opt-in program. “That’s what I heard before as well as what I heard on the 6th.” Not sure about about you, but I ain’t buying Coke’s excuse. Kruse’s comments led me to these questions:

  1. Did Facebook lie to Coke?
  2. Did Coke get snookered?
  3. Or both?
  4. Did Coke really ask all the right questions about privacy, opt-in and automatic enrollment before signing on?

How did Coke or Verizon or Blockbuster expect this data would be collected? In fact, did anyone really ask the tough questions of Facebook? Because if they did, then they all were very well aware of what they were signing up for. And if they didn’t ask the right questions, well…why didn’t they? I guess big dollars signs clouded common sense.

Some potential partners Facebook tried to sign up before launching Beacon, asked the opt-in vs. opt-out questions, and in the end decided to stay on the sidelines because of concerns for the privacy of their community. All of the partners — everyone from Overstock to Blockbuster to Fandango — are equally complicit in this mess.

In the coming days, many of them, like Coke, will feign ignorance, show surprise and duck for cover. But the fact of the matter is that they were transmitting information about their customers to Facebook in hopes of earning more dollars via this new thing called frimping, i.e. pimping stuff to your friends. And if they want us to do that, well they should be held to the same standard as Facebook, and offer everyone an opportunity to opt in to this new kind of advertising program.

Update: Travelocity and  Overstock.com are stepping away from Beacon.

The video comes to us from Christopher Carfi.

Technology-News: GigaOm

2008: The Year of LinkedIn?

Now that Thanksgiving is over, it’s time to start speculating about what will be hot and what will be not in 2008. After all, 2007 was not the Year of the Widget, despite what Newsweek predicted. If anything, it was the Year of Facebook, as the social networking site won a $240 million investment from Microsoft for a mere 1.6 percent stake (plus the right to sell third-party ads on the Facebook network), valuing it a some $15 billion. But what about that business networking contender, LinkedIn? Could 2008 be the year of business networking?

Maybe — but only if LinkedIn doesn’t fumble its position by failing to address the worldwide Internet user base, about 80 percent of which resides outside of the U.S.

LinkedIn seems to have built some momentum while everyone was gawking at Facebook. LinkedIn CEO Dan Nye predicts the company’s revenues could grow to $100 million next year. News Corp. (apparently) wants to buy it. And on a year-over-year percentage basis, as of October, LinkedIn grew faster than Facebook.

Facebook’s sober cousin seems well-positioned for any economic weakness that could emerge in 2008, because it doesn’t depend primarily on advertising, but rather makes money by selling premium services to subscribers and their employers. And if people start losing their jobs, they’ll be all the more interested in LinkedIn’s services.

LinkedIn faces challenges, of course. I spoke with Konstantin Guericke, LinkedIn co-founder and Jaxtr CEO, not as an official spokesperson for LinkedIn but as an interested observer and investor. He said that English-only LinkedIn needs to push forward aggressively with internationalization and localization in 2008. It competes with Xing in Germany and Viadeo in France, both of which support multiple languages.

From an international perspective, Facebook doesn’t look so exciting. It competes with a vast array of social networks including hi5, Bebo, Orkut, Mixi, QQ and more. Besides that, it could have permanently offended many of its users with its ham-handed attempts at social advertising. For LinkedIn, advertising is a source of revenue secondary to providing services its users find valuable enough to pay for. On that basis alone, I hope that 2008 is the year of LinkedIn rather than Facebook, at least if we’re talking about networking online in one forum or another.

Technology-News: GigaOm

Facebook Beacon Revamp: Will It Go Far Enough?

Facebook may announce alterations to the Beacon social advertising system as early as today, according to BusinessWeek. Perhaps Facebook will now allow global opt-out of publishing third-party activities on the Facebook site — and this would appease many who have complained.

But that may not go far enough in protecting users’ privacy. Some people may also want the ability to stop Facebook not just from publishing information from third-party sites, but also from gathering that information at all.

Many Facebook users have complained that they shouldn’t have to opt out every time Facebook wants to publish transaction information from third-party sites. Besides, some critics say, the opt-out notices are so subtle that many people don’t even notice them.

Blogger and Wiley marketing director, Ellen Gerstein, discovered how subtle those notices were when she congratulated her babysitter on buying a purple ski jacket. Her babysitter had no idea that her Overstock.com purchases were shared on Facebook. Ellen said, “I cannot imagine I would want anyone on Facebook to know what I am purchasing.”

When Facebook announced Beacon, Om called it a potential privacy hairball, noting that even if you opt out of the information publishing, Facebook still knows what you’re doing.

Bokardo blogger Joshua Porter highlights this same problem:

Most people are worried about what happens when the shared information gets back to Facebook, and their Facebook friends see their outside activity… My main concern was that Facebook and Blockbuster were talking at all.

So when the Facebook announcement comes out, we should be looking not only for the ability to opt out of publishing transaction information to Facebook, but the ability to opt out of sharing any information outside of Facebook as well.

Technology-News: GigaOm

Coming Soon: A Small Move by Facebook, with Big Implications

So a lot has been made of the Facebook vs. Google fight, whether it be the fight over talent or potential advertising revenues. The reality is that if Facebook needs to keep growing, it needs Google. Mike Arrington yesterday pointed out that Facebook was advertising on Google to get, well, advertising. Now I have some skinny on a recent development that could have long-term ramifications, among them Google sending more traffic to Facebook.com.

The company will soon announce that some application canvas pages (ones that don’t require a special login) will become publicly indexable by search engines like Google. So for instance, our GigaOM Question Of The Day app can be indexed and made available in some limited form to people not logged onto Facebook. Apps get a public-facing web presence of their own.

Facebook has just recently started talking to app developers about this. Back in September, Facebook launched a “public listings search” feature that allows anyone to search for a specific person. The public indexing of apps would be a way for Facebook to attract more users to their domain and thus goose up their page views. I wonder what kind of pagerank dilemma it will pose for Google. Let’s say, for example, there’s the “iLike page” and the “iLike on Facebook page” — which one would get preferential treatment?

More on this as I dig up more details.

Technology-News: GigaOm

To Save Its Bacon, Facebook Weakens Beacon

Update: Three weeks is a long time on the Internet. It was on Nov. 6 that I raised the question: Is Facebook Beacon a Privacy Nightmare? Three days later, my next post, Facebook’s Cruel Intentions elicited some response from the Palo Alto, Calif.-based company, which responded and clarified their position. But soon after, the situation got a bit out of control. MoveOn.org got involved and the whole thing started to look like a major PR disaster.

In a classic example of marketing doublespeak, the company saw privacy concerns as an issue in the minds of pundits. (Never heard them complain about pundits praising their “innovations.”) A few hours later, the Palo Alto-based company outdid John Kerry when it came to flip-flopping and announced what are being perceived as big changes to the Beacon system. Why? Because it was not the pundits, but instead Facebook users who were up in arms about it. Facebook finally backed down, more or less acquiescing to the demands of those concerned about its seemingly blatant abuse of privacy of its fast-growing user base. Now you are explicitly asked whether to publish or not publish the information that is being innocuously called “stories.” There doesn’t seem to be a universal opt-out, however.

Regardless, I think it is laudable that Zuckerberg’s crew is at least listening to its community and responding accordingly. [FAQ on New Beacon] Of course, the cynical take on this would be: it isn’t the last time they are going to test the outer limits and see what they can get away with. And how much of these changes were instituted to ensure that the potential advertising partners don’t get scared, putting the future revenue streams at risk? (Maybe the Beacon flip-flop was influenced by the fact that Facebook was negotiating to get a $60 million investment from Li Ka-Shing, the Chinese tycoon who has previously made a killing with his tech investments.)

There is one issue that remains unanswered. During my initial inquiries, when I asked the company executives if Facebook continues to collect data even if that data (stories if you may) wasn’t published. They assured me that is not the case, and gave me written and verbal assurances. Those doubts have resurfaced, largely because of the language used by Facebook in their statement regarding changes to Beacon.

If a user does nothing with the initial notification on Facebook, it will hide after some duration without a story being published. When a user takes a future action on a Beacon site, it will reappear and display all the potential stories along with the opportunity to click “OK” to publish or click “remove” to not publish.

Following their argument, unless they are storing information being sent to Facebook from the partner sites, it is unlikely that “all potential stories be published at a later stage.” It can’t be auto-magically recreated from thin air.

Users will have clear options in ongoing notifications to either delete or publish. No stories will be published if users navigate away from their home page. If they delay in making this decision, the notification will hide and they can make a decision at a later time.

If you decide to opt out completely, you are in the clear, but if you forget to do so, and take no action, then the Facebook system will keep collecting data. In other words, Beacon continues to do its job — collect information from partner sites and also fine-tune the advertising system. From that perspective, nothing has really changed. Except perhaps the public perception that Facebook listens to its community.

(Dan Farber’s take on changes in Beacon is smart and worth reading.)

Update: CA Security Advisor Research Blog has tangible proof and details on information flowing back to Facebook from partner sites.

Technology-News: GigaOm

Who Needs Facebook? MSFT Thriving on Its Own

This will be good news or bad news depending on how you feel about Microsoft, but the software company seems to be roaring back. And it has nothing to do with its overpriced, over-hyped 1.6 percent stake in Facebook.

Instead, it has more to do with the earnings report it delivered Thursday afternoon for its fiscal first quarter that ended Sept. 30. Beating the Street by six cents a share (its biggest earnings surprise in a few years), while showing $1.2 billion more in revenue than analysts had expected and a significant improvement in its operating margins (to 43 percent from 41 percent a year ago).

Not only was that good, it was way better than Wall Street seems to have been expecting. The stock was up at $35.50, as of this writing, in after-hours trading — surging 11 percent in less than an hour after Microsoft (MSFT) reported earnings. Here’s why I think that performance is so impressive.

First, it launches the stock back to a level it hasn’t seen since July of 2001 — more than six years ago. Microsoft reached as high as $31.84 on July 19 of this year. But the last time the stock closed officially above $35 was back when the tech bubble was still deflating. If Microsoft closes above $35 Friday, it will mark a six-year odyssey back to that level.

But that doesn’t mean Microsoft will necessarily be overpriced again. Its net profit for the last 12 months total $14.9 billion, or three times its net income six years ago. In other words, Microsoft’s stock may soon be back at its 2001 level, but its profits have tripled in the meantime. Its after-market market value of $333 billion is only 22 times that profit.

Second, Microsoft had a $300 billion market cap at the end of Thursday, before its earnings report, about 150 percent of Google’s (GOOG) and roughly double that of Apple’s (AAPL) on the same day. That’s a lot of market cap, and to get it to rise 11 percent means pumping in $33 billion dollars.

As the chart from Google Finance shows, Microsoft’s stock rose to $35.81 from $32.04 in 45 minutes. In that frenetic three-quarters of an hour, when tens of millions of shares were traded, the value of the stock was rising an average of $12 million a second.

So this is a bigger vote of confidence for Microsoft from Wall Street than the headline figures may indicate. Everyone was expecting a pretty strong quarter from Halo 3 and Xbox 360 sales, but the actual numbers were even stronger. Improbably, 85 million copies of Vista have been sold.

(One weak spot remains online advertising, which thanks in part to investments in aQuantive and other properties, posted a loss of $264 million.)

This quarter may mark a turning point when investors stopped looking at Microsoft as an aging, arthritic giant that could at best hope for maintaining slow and steady profits with the occasional if beefy dividend thrown in. After all, EPS grew 29 percent, to 45 cents a share.

That profit growth rate may be a league below Apple and Google. And Microsoft is still far from being an innovation powerhouse like either of those companies. But it marks a significant improvement from the Microsoft of a few years back, when it would have sounded odd to say what we know today: Microsoft is alive and well, and still in the race.

Technology-News: GigaOm

Facebook ‘Grants’ Devotees a Disappointment

Somewhere in San Jose, Calif., devotees of all things Facebook have gathered to celebrate the cult of Mark Zuckerberg and the little company he started. Dave McClure might call it his Graphing Social Patterns conference, but we all know it’s all about Facebook, Silicon Valley’s Furby. And while the fanboys gather and rejoice, they should also pay heed to some of the red flags fluttering in the hot air.

The company apparently sent out an email earlier this month informing all those who applied for grants via the fbFund to start over. We emailed Facebook to check the authenticity of the email, but had not heard back from them at the time of posting. (Given that there is a Facebook app for the application process, we take that as a confirmation.)

The fbFund was unveiled at the TechCrunch 40 conference last month, and as part of the announcement, Facebook backers Accel Partners and Founders’ Fund earmarked $10 million in new funds to give out to app developers as “grants” of between $25,000 and $250,000 each.

“It has become clear that we will receive proposals which contain similar or even identical ideas. As a result, and in order to protect other developers and us from claims that we or anyone else copied material without the creator’s permission, unless we agree otherwise in writing, we can’t promise that any materials or information you submit here will be kept confidential, or specifically that we or others might not develop similar or identical products or services. To make sure that everyone understands the conditions of submitting a grant application, we will not review any materials you have sent via email, and any materials you may have sent have been deleted.”

However well-meaning their intentions are, if the email is indeed authentic, then let me point out the obvious: the Facebook brain trust didn’t think through the implications of their announcement, and rushed to the podium, literally and figuratively. That deserves an “F,” especially for a startup that promises to be social operating system.

Is this a one-time oversight, or part of a pattern? The latter seems to be the case. Previously, the much hyped start-up botched up the launch of a smart feature (news feed), that caused a ruckus and a short-lived backlash. Luckily they dodged the bullet that time. Similarly, at the launch of the Facebook platform, the company showed its organizational ineptitude, keeping partners on tenterhooks.

Launch partner companies have been struggling to deal with uncertainty and last-minute changes to the tools and services made available by Facebook, multiple sources have told GigaOM.

Remember that when Facebook was subpoenaed a few weeks ago by the New York Attorney General Andrew Cuomo over issues of “safety,” what got the political opportunist riled up was that the company “ignored” complaints from undercover investigators about “inappropriate sexual advances to underage users.”

The veracity of the charges is up for debate, as commentators in response to my previous post let me know, but regardless: you don’t just ignore complaints from an AG. It was a huge tactical blunder. Add in the fbFund fracas – you can feel that something is not right here.

These repeated botch-ups are signs that the wheels on Facebook, arguably one of the fastest growing startups in Silicon Valley are starting to wobble. Or maybe the autocratic Zuckerburg is a cat with nine lives.

Two Facebook-related blog posts I recommend:

Technology-News: GigaOm

Comcast: Growth Through Convergence

By Sramana Mitra

Comcast Corporation is the largest cable operator in the United States and one of the leading communications and entertainment companies in the world focusing on broadband communications and content. In this segment, we will evaluate how Comcast is leveraging the evolving convergence phenomenon in its growth strategy.

Comcast’s operations can be broadly categorized into three segments:

The cable operations of Comcast served approximately 24.2 million video subscribers, 11.5 million Internet subscribers and 2.5 million phone subscribers. The Company’s networks covered 39 states in the US and approximately 45.7 million homes in 2006. Comcast’s average cash flow per subscriber is $435.

Comcast is focusing on Cable, Internet and VoIP to grow its business. Digital Broadband is the key and the Company is betting big on its Triple Play (Cable, Phone, Internet) service. Comcast has been talking about the potential of Triple Play for the whole of 2006. Triple Play provides subscribers with cable, high-speed Internet and phone services in one convenient package for $99 per month.

In 2006 Comcast increased its RGU (Revenue Generating Unit) additions by 69% to 5 million users from 3 million users in 2005. The Company is bullish about RGU additions and hopes to grow RGU additions by 30% to 6.5 million in 2007 on the wings of Triple Play.

The Company is also acquiring other Cable operators and rebalancing its portfolio (Patriot Media, Adelphia Communications, division of Insight) in the US to consolidate its position in the market. It recently invested in San Mateo-based Vyatta, an opensource router company, indicating it has as yet undisclosed designs.

Comcast has taken the lead to grow the VoIP industry rapidly. Comcast’s VoIP subscriber base is growing faster than the industry and the Company is expected to be the largest VoIP provider in the US by mid 2007. Comcast added over 500,000 VoIP subscribers in the last quarter of 2006 and surpassed 2 million subscribers in February 2007.

Comcast formed Comcast Interactive Media (CIM) to grow its online media business. CIM manages Comcast.net, portal for high-speed Internet subscribers, thePlatform, a company that provides technology to manage digital content, and other new online businesses in development. CIM is focused on developing interactive services that offer video, entertainment and information to consumers across multiple platforms.

Being a cable company, Comcast’s CIM venture is too little too late. However, Ziddio, a online and on demand channel for the entertainment enthusiast and GameInvasion, a online gaming site, with cutting-edge games and video-rich interface are good verticals to start with as they are hot properties on the Internet and attract significant eyeballs. TV Planner is also an interesting offering.

Ziddio recently entered into a partnership with Facebook to create and share user-generated videos and become part of a new television series titled “Facebook Diaries.” This partnership will aid in increasing the quantum of video and traffic to Ziddio. The selected videos will also be available on Comcast’s on demand service. Comcast will sell advertising for the video inventory and in the process, hopes to maximize its revenues.

Comcast has also launched FEARnet, a new advertising-supported, multiplatform network delivering the best of modern horror films, streaming video and original content - on demand, online and to mobile devices.

Comcast has delivered 26 straight quarters of double digit cable cash flow growth and with its Triple Play and Interactive ventures taking shape, 2007 could be a strong year.

Sramana Mitra has been the founder CEO of 3 startups, Interim VP of Marketing of 7 startups, and has consulted for over 70 companies including public companies such as SAP, Cadence, Webex, and others. This post first appeared on her blog, Sramana Mitra on Strategy, and has been syndicated with the consent and permission of the author. 

Technology-News: GigaOm

Iminlikewithyou: Love in the time of Facebook

This past weekend I got a chance to hang out with Charles Forman and Dan Albritton, the twenty-something, fast-talking co-founders of New York-based Iminlikewithyou, a new web-mobile hybrid service, that is going as addictive and as powerful as Facebook. And just as Mark Zuckerberg reinvented the Yearbook, Charles & Dan are going to reinvent the art of flirting.

Iminlikewithyou has emerged from the YCombinator program, and has been in stealth mode for almost six months. Charles and Dan bootstrapped this operation, and are using Amazon EC2 and S3 services as part of their infrastructure.

iminlikewithyou.gif

The company, based in a decidedly unglamorous part of Midtown Manhattan, has recently closed a Series A round of funding from pretty high powered angels, whose names the two co-founders are keeping close to their collective vests.

Unlike a lot of Web2.0 start-ups that simply automate all the fun out of dating, Iminlikewithyou has stepped back, rethought the whole courtship process. Instead, Iminlikewithyou uses technology to amplify the most organic form of human interaction: flirting. What they have come up with is a web service that can be described as luscious, simple and elegant. Did I say, addictive?

Flirting, or the art of flirting, one of the few joys left in these politically correct, over sanitized times. It is the aspect of dating that allows a man or a woman to not only display wit, but also makes innuendo acceptable. It is the sheer unpredictability of flirting – will the date ever happen? - that makes it a delicious delight. On the flipside, as French poet Victor Hugo said, “God created the flirt as soon as he made the fool.”

Iminlikewithyou captures all that and bottles it in its web service, which is equally at home on your mobile phone as it is in a browser. It has taken flirting and turned into a game that is inspired in part by eBay-styled auction process. More importantly, it captures what could be the next big Internet trend: an intent-based web ecosystem.

Here is how it works:

You sign up for the service, by answering very basic questions: email, location, age and gender and what is your flirting preference. It takes about 10 minutes, and you are in the network. You add your photos and some other personal information, and you are rewarded with 500 points. Now this is where the game begins.

iminlikewithyou1.gifYou are interested in someone, say a lovely lady from New York, you start the flirting process by basically bidding some of your 500 points on her, say 50 points. The bid indicates your intent to woo the young lady. Unfortunately for you, if you’ve made a wise choice, there will be others who will want to date her as well. They will try to outbid you and, well, the process goes on, till the young lady is convinced that you are the one to reward with her attentions. You get SMS and MMS alerts all through the bidding process.

Since the service is in closed beta, you are not penalized for being a loser, but when the service launches, be careful what you bid for.

If you happen to lose, you are not just out of luck with the lady, but out of those points, too. In the future you lose a percentage of your bid amount. The percentage may be quite large, to discourage too much ‘reaching’ on the part of guys who can’t reasonably get the girl.

This is why you need to be economical about how you bid your points, and judicious in indicating your intent. (Not so different from the triage we men use when doling out dollars in singles a bar, either.) And if you come up empty, don’t take it personally. As François de la Rochefoucauld put it - “What we find the least of in flirtation is love.” (You aren’t looking for love anyway, remember?)

The good news is you can recharge your points by answering random questions that pop-up on the screen. Every time you sign-in you get some points, and you can build up your points-balance.

Each question you answer gets you 5 points, and those questions help the company build a better profile of you, something that can be used for highly targeted advertising. A classic question: do you like gin and tonic? Answer is no, but you bet, I will see a vodka ad sometime in the future.

The service has built in communications features like instant messaging, and also has the ability to upload photos and videos. It also has anonymous calling features built into the service, again giving the ladies control over who can talk to them, without giving out their phone numbers.

One of the reasons this service is going to be successful is because it puts ladies in charge. A lot of my friends have said that they are sick and tired of getting emails from guys, which are obviously canned and rote. They all currently use the traditional dating sites, and were quite thrilled by the prospect of Iminlikewithyou.

iminlikewithyou2.gifBeing an old fogey, I perhaps have forgotten that when you are in your 20s, flirting is more exciting that the prospect of finding a life partner. And yet I found myself spending ungodly amount of time on the site, collecting points and of course bidding. Nevertheless it would be foolish to suggest that it is a service that is targeting the gray-hair set.

Iminlikewithyou is a service for the Facebook generation, and its easy integration with Facebook tips their hand on which demographic they are focusing.

Technology-News: GigaOm