Archive for the ‘Facebook’ Tag

Facebook’s CEO: Damn the Customers, We’re Doing it My Way

image courtesy of ideagrove.com

image courtesy of ideagrove.com

Seems like Facebook has been on a redesign binge lately and with every iteration, you can hear the increasing sound of users who are unhappy with the results. Last month, after Facebook’s redesigned Terms of Service debacle, Zuckerberg promised to be much more “democratic” about future changes.  Of course that was last month and based on the track record, it’s just about time for an other customer “disruption”.  In his latest move, following a failed attempt at acquiring Twitter, CEO Mark Zuckerberg decided to give Facebook users a very twitter-like, steady stream of updates.  The problem is that the change is almost universally disliked, and that includes Facebook employees.  Valleywag recently reported on the story based on an insider tip:

Zuckerberg sent an email to Facebook staff reacting to criticism of the changes: “He said something like ‘the most disruptive companies don’t listen to their customers.'” Another tipster who has seen the email says Zuckerberg implied that companies were “stupid” for “listening to their customers.”

There are only alleged statements, but if that’s a part of Facebook’s longterm strategy, then I think young Mr. Zuckerberg may face some problems down the road.  Perhaps this thinking comes from the 24 year old’s lack of business experience .  Maybe he feels that the people who place advertising on the site are the only “customers” he needs to listen to.   Either way, I can think of no competitive business which has been successful in the long run without listening to its customers.    If people stop liking your product, they will look for alternatives in the marketplace (just ask MySpace).  When they start leaving, so will your advertisers.  There’s probably a couple of college students sitting in a dorm room right now dreaming up the Facebook-killer.

Update:  Robert Scoble has an interesting take on this over at Scoblizer.  He makes a case in favor of Facebook ignoring the complaints in the interest of achieving a longer term objective.  He says people will complain but they won’t leave.  Perhaps not at this point.  Too many people are joining facebook as their first foray into social media and are invested there.  I would compare their position to where Twitter was when the Fail Whale was a common occurence.  People didn’t leave because of the value and the investment there.  Still, I think Scoble and I are looking at this from two very different perspectives.  Perhaps Facebook is like mobile carriers.  It’s market position allows them to grow despite doing things that customers dont like.  Most competitive businesses cannot operate like that.  Don’t use Facebook as your model.

What do you think?

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Companies Without Conversation

This past week gave us several great examples of companies demonstrating their obliviousness to the changing world around them.

scrabble_v_scrabulous.jpgHasbro / Mattel

You know Scrabble. Created in 1933, the classic wordplay board game has been a favorite worldwide for decades. So when Calcutta-based developers Rajat and Jayant Agarwalla created a Scrabble knock-off application called “Scrabulous” for the social networking site Facebook, people started signing up like crazy. As of today, Scrabulous has 600,000 daily users but that’s only a quarter of the number of people who have signed up to play it. You’d think Hasbro & Mattel, who together own the world-wide rights to the game, would see an opportunity here and find a way leverage these social media passionistas to further promote their product. Sadly, they don’t see it that way and have issued a cease and desist order trying to get Facebook to take the game down.

From a legal standpoint, Hasbro / Mattel are well within their rights and in fact, as Shel Holtz points out in a response to Matt Dickman’s excellent post on this topic last week, companies must consistently go after intellectual property infringement cases to make future charges stick. Moreover, if the Agarwallas had simply printed a copy of Scrabulous and sold it as a board game, there would be little controversy about whether it constitutes a copyright violation.

Back in the days before consumers had a voice, there were really only two parties to consider in these types of cases: The IP owner and the IP infringer. The lawyers would shut the infringer down and that would be the end of it. Unfortunately for companies like Hasbro / Mattel, the world has moved on and, as demonstrated by the Scrabulous case, the consumers now have a seat at the table. They can’t impact the legal outcome of the case, but they can make the PR fallout into a big deal. Hasbro / Mattel either didn’t see that coming or felt it was not as important as defending the IP. What I and many other observers are suggesting is that a little creative thinking between the lawyers and the marketers could have resulted in an outcome that both satisfied Hasbro / Mattel’s legal requirement and managed to tap into the 2.5 million potential evangelists playing Scrabulous. This case is far from being closed and it will be interesting to see where it goes.

Target

Amy Jussel is a blogger focusing on media & marketing’s influence on kids. She sent a letter to Target’s Corp Communication dept regarding a billboard in Times Square that some people have found offensive. The good news is that target responded. The bad news is that this is what they said:

Good Morning Amy, Thank you for contacting Target; unfortunately we are unable to respond to your inquiry because Target does not participate with non-traditional media outlets. This practice is in place to allow us to focus on publications that reach our core guest. Once again thank you for your interest, and have a nice day.

target.jpgTarget “does not participate with non-traditional media outlets”?? Huh? Then what are they doing on Facebook and what’s that Rounders program all about???? And just who do they think their “core guest” is. I shop Target at least once a week and I bet millions of other people who “participate with non-traditional media outlets” do too. Perhaps if Target understood who their “core guest” really was, they would know that some of them can be quite vocal. Word of this “policy” spread like wildfire through digital communities and bloggers like Julia Roy quickly responded. With one sentence to one person, Target managed to offend an important segment of their customer base. What’s astonishing to me is that Target, which portrays its self as being cool and hip, is apparently clueless about how to engage with the “non-traditional media” segment of their customers. They don’t understand the brand evangelism opportunity that can be had from engaging with them (and I don’t mean in a Rounders sort of way). There will likely be some PR backpedaling on this one, just as there was just a few months ago with the Rounders debacle, but whether Target will make some fundamental changes in their approach is yet to be seen.

In a follow-up to his post on Scrabulous, Matt Dickman wrote about engaging with “non-traditional media” types. He asked:

When you look at your brand’s social media universe, are you looking for criminals or evangelists?

I think the first question for many companies should be Are you looking at your brand’s social media universe?

The Web 2.0 Videos Worth Watching

During my multi-hour marathon on Twitter last night, someone shared this video. Very entertaining, but for anyone who’s portfolios lived through the last Web bubble, it does get you thinking. Thanks to Greg Verdino and Karl Long for re-sharing.

On a much more serious note, you may have heard about the controversy surrounding Facebook’s Beacon. Valeria Maltoni shared this video on her blog this morning. Raises lots of questions to think about if you maintain a Facebook account.

What Do You Get For $240Million?

facebook-gates.jpgOn Wednesday, Microsoft announced that it will spend $240 million for a 1.6 percent stake in the #2 social networking site, Facebook. As part of the deal, Microsoft is now Facebook’s exclusive advertising partner worldwide until 2011. Facebook is expected to earn $30 million in profits on $150 million in revenue so $240 million sounds like a really big chunk of change for 1.6%. To put it another way, that deal effectively values the privately-held Facebook at $15 billion (that’s billion, with a “B”). As with similar deals in the past, there will certainly be those that scratch their heads and say this is crazy.

If you are in that camp, I recommend that you read Jeramiah Owyang’s post, “How Microsoft Got Their Passport Afterall“. Facebook currently has 50 million users and a userbase that doubles every 6 months. Those users voluntarily provide all sorts of detailed information about themselves. Owyang writes:

  1. Facebook knows who you are: your name, your gender, where you live, your martial and political status, sexual preference, age, where you work, the list goes on. The funny thing is, you’ve voluntarily given that information up.
  2. They also know who you connect to, who you talk to, and what you say to them (you don’t own those private message ya know).
  3. Sure, up to one third of all profile information is bogus, but what about those unsaid gestures: What people do is more important than what they say. What apps you use, how frequent, what and who you click on.

Forget the fact that Microsoft was desperate to beat Google at something. Microsoft wants to be a player in the lucrative on-line advertising business.  This new partnership gives them access to goldmine of personal data with which they can potentially build highly efficient advertising vehicles .  Owyang reminds us that advertising is all about accuracy and margins.  The more accurate an ad is at hitting the target group, the lower the cost.  He also points out that where “Google sells ads based on keywords, FaceSoft can now sell ads on something far more accurate: people“.

Owyang goes on to discuss what the next generation of on-line advertising might look like, suggesting that it will become much more targeted and much more social, and with that comes the risks associates with giving up control.

I think Jeremiah nailed it.  What do you think?

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