October 29, 2007

Facebook Consumerism?

Microsoft's recent $240 million investment into Facebook.com has resulted in a valuation of over 15 billion dollars for everyone's favorite social networking app. Why so much? Do we honestly believe that the company has a business / revenue model that would warrant such a price?

Many people have speculated that Facebook's advertising announcement on November 6th will pave the way to revenues for this darling social community, but what are they thinking? Are they planning on leveraging all of the profile and demographic information to allow advertisers to send targeted advertising messages? If they are, so what? Are people really open to advertising messages when their primary goal on the site is to communicate and "SuperPoke" their friends? Look was happened / is happening to Myspace.com, once the site became saturated and cluttered with advertising, it started to loose its key influencer user base and their growth stagnated.
What about add on apps, or widgets? There has been a lot of corporate buzz about buying your own widget, and companies such as Tripadvisor, eBay, Zoho, Jobster, and Blue Nile have all created or purchased existing apps. These widgets are used to complement the user experience on Facebook and to have banner ads or links back to the corporate site. But this whole process still needs to have a long tail marketing approach, users are there to communicate, if you don't facilitate that, then your app will not survive.

How does this relate to the travel industry? Can a connection be made between travel experiences and face book? Would users be willing to share their experiences in a non-travel related site? How can a travel company effectively advertise or promote using this media?

There are 197 applications that attempt to bridge the gap between travel and the general online community. The sad thing for travel industry companies is that the most popular apps have the least functionality. The most active widget is one that allows you to have an image of a car on your page, and your car gets better with more points. This is followed by a number of apps that show a dot on a map or a flag from the countries that you have visited. You may speculate that this is a result of Facebook apps being in their infancy, and that greater functionality will follow, but that is not the case, there are some apps that are not popular that have a great list of features, one app Travel Map can:

"Plot your travels with this quick and easy tool and show the world how well-travelled you are. Brought to you by Travellerspoint, where you can also upload photos, start a blog and get all the travel help you need."

This sounds mightily impressive until you realize that there are only 388 daily users.

What is the point?

If you are thinking about creating a widget for Facebook, keep it simple, complement the communication process, and give friends something to chat about. Have a soft ad, and link to your site through the widget. You may want to finish your development before November 6th, as there are going to be some BIG changes.


Peter Daams said...

Hi Philip, the way I see it, the primary problem facing our app on Facebook is that we were simply too late. By the time we had put it together there were already a few others on there that had gained a lot of popularity. The trick with Facebook really was to get in there before anyone else. As a result, simple apps that took a day to build gained great popularity. Now that the platform is flooded with apps, it is much harder to gain users.

That said, we do still generate over a hundred new members a day from Facebook, so even being a relatively minor app is not so bad. :)

With OpenSocial about to launch, we'll have to try and get our app together faster and see if that works better. If that doesn't work, maybe you're right that we need to go for the boring "I've coloured in all the countries I've been to" option instead. :)