JIN-522 -- Facebook's new walled garden is Asia's SNS opportunity

[jin at mailman.japaninc.com]

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J at pan Inc Newsletter
The 'JIN' J at pan Inc Newsletter
A weekly opinion piece on social, economic and political trends in Japan.
Issue No. 522 Thursday, April 22, 2010, Tokyo

Much like the ill-fated rollout of Facebook's Beacon initiative (an ad
system that sent user data from partner websites back to Facebook in hopes
of harvesting marketing information), the global social networking
powerhouse has just unveiled plans that will, at best, sink its long term
future in privacy-first, non-U.S. markets, and at worst open the field for a
new global social networking player to emerge, sans the overreaching for the
control of one's entire Internet experience.

The company's founder, Mark Zuckerberg, took to the stage yesterday during
Facebook's f8 tech conference in San Francisco to outline Facebook's plan to
wrap Internet websites within a framework of "Social Plugins" and as well as
an "Open Graph Protocol."

What this means is that a site can now embed code that will allow any user
logged into Facebook to instantly click on a page to indicate that s/he
likes that page. That "like" notification will immediately be displayed when
that person's friend accesses the person's Facebook profile (while logged
into Facebook), or the associated website.

According to Facebook, none of the data sent to Facebook in this new
framework will be shared with the original site--which begs the question,
other than occasional traffic bumps, what's really in it for sites to embed
this code? Testing out the new framework, I signed into Facebook and visited
a couple of the external partner sites (The Washington Post and ABC News).
The system worked as advertised, but the one thing I noticed after about 20
minutes is that I still had not been prompted in any way to sign into The
Post's own registration system located at the top of every page. Using The
Post as an example, it seems the participating sites will likely get the
benefit of sporadic traffic bumps, but only Facebook will enjoy the
potential stickiness of user interaction.

While some have called this move on Facebook's part a shot across the bow of
Google's plans to occupy every part of your Internet experience, the first
thing that came to mind for me was the notion Steve Jobs presented a couple
of weeks ago when introducing Apple's new iAds platform. Jobs laid out a
vision of an Internet driven by apps rather than search. The apps-driven web
is a place in which the user's experience is highly curated and controlled
by the content sites' mobile app (basically, a mini-walled garden) rather
than through the brand's website (a dynamic that allows the user to control
how s/he consumes the brand's content and ads).

By rolling out the new website plugin and social bar, Facebook is attempting
to reinvent itself as a ubiquitous kind of "web app," rather than just
another popular website. Unifying this framework with Facebook's mobile apps
could essentially give a frequent Facebook user--perhaps too lazy or unaware
to log out of the site daily--a view of the Internet wholly framed and
driven by Facebook's network tools and advertising inventory.

In addition to framing your entire Internet experience, Facebook also hopes
to upend our the current paradigm of hyperlinks driving user attention with
social recommendations, wrapped in contextualized advertisements based on
your confirmed interests culled from your, and your friend's, Facebook
account.

Sure this is a tall order of Orwellian proportions, but it's an entirely
realistic enterprise. If these initiatives had been launched by a lesser
player, it would be easy to label this plan DOA, but with over 400 million
registered users worldwide, any move Facebook makes to change the overall
web experience of users must be examined and taken seriously.

The other issue at hand is that of privacy. Above all, this is probably the
most important aspect of Facebook's new initiative that could stymy the SNS
leader when it comes to international adoption. Considering Google's
problems with the EU and Japan regarding privacy concerns, it seems
Facebook's latest move will probably be a hard sell for Japanese websites as
well as local users.

Adding to Facebook's uphill climb is the fact that future of the world's
most popular social network is already looking a bit dim in Japan. According
to NetRatings Japan, at the end of 2009, Facebook had logged just 1.39
million unique visitors per month, compared to Japan's SNS leader, Mixi, at
9.2 million unique visitors per month.

The opportunity here--while Silicon Valley firms navel gaze and ponder the
English Internet--is for other SNS heavyweights like Japan's Gree, Mixi and
China's Renren.com (formerly Xiaonei.com) to cast their gaze abroad and ply
their substantial wares to a Western audience primed for something new from
the East. Recent history says this isn't likely, but if it somehow comes to
pass, the new competition will ultimately benefit those who fuel all SNS
sites: the users.

-Adario Strange

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