Is Apple becoming evil?

November 19, 2007

Apple has a reputation of being a fair and open company and has acquired a massive die hard fan base thanks to this approach. They are seen as one of the good companies compared to others such as Microsoft (and sometimes Google).

However, they’ve not been doing themselves any favours of late…

First they crippled peoples iPhones when they tried to update, hack or unlock them. I can understand the desire to do this but it’s fairly narrow minded and unnecessarily antagonises the types of customers they rely on as a tech company.

Now they’ve committed what to me is a cardinal sin. According to Techcrunch there is a feature in the iPhone which sends data back to Apple all the time. This data includes IP address, stock quote preferences and other preference data, worst of all though it sends the IMEI number for the users phone back as well.

Now an IMEI is one of those rare bits of data which can instantly be linked to a person, unlike things like IP address which are more transient and changeable. This means that Apple could be building a profile for all it’s iPhone users with more than just who they are and the fact they own an iPhone. This could contain data that would be hugely attractive to advertisers around the globe.

So could Apple be planning a Facebook? Possibly. Are they harvesting information on their users? Undoubtedly, yes they are. What they plan to do with that data is anyones guess at the moment but Apple should expect to receive some backlash from their customers for this as it seems a breach of privacy to me.

Update – 20th Nov: The latest from Techcrunch is that this isn’t 100% true, apparently the iPhone doesn’t send an IMEI back to home base.

Part of Facebooks game plan seems to have been to create an illusion of openness while at the same time ensuring that their platform is actually closed to anyone who could tread on their toes in the areas that drive their revenue. Now admittedly they don’t have much revenue right now but that is going to change very soon with all the new advertising options available to brands who want to be promoted on the social network. So with this increasing revenue should come an increasingly closed approach as they try to prevent others from stepping on their toes. Right?

Well, it seems Google may have a way in to the Facebook platform, and it may be something that Facebook can’t do anything about.

Bring forth OpenSocket; a Facebook application that allows you to run any OpenSocial application on your Facebook profile. Now, as OpenSocial gains traction I can very well see developers looking for ways to monetise their efforts on this new platform. Of course, with Google at the helm one of the obvious options would be to carry Adsense adverts on your OpenSocial app. So that is how Google can potentially make advertising revenue out of Facebook without striking any sort of deal.

Will this happen? Well, I’d imagine Facebook will try to block Google ads from appearing, but if a lot of developers start using OpenSocial the demand to allow this may be overwhelming and actually more in Facebooks interest to allow this than to try to block it.

A study from PQ Media shows that word-of-mouth marketing has grown by 35.9% in 2006 (to $981m) and is expected to be well over $1B in 2007 (maybe as much as $1.3B). Now, over 90% of word-of-mouth marketing is offline still but that’s changing and with the new opportunities for communication and engaging your customers on the web I’d expect the shift from off to online to be pretty dramatic over the next year.

In 2006, word-of-mouth marketing was still the smallest of the main segments of marketing activity, however it grew almost five times faster than the overall marketing services sector, demonstrating that this is a market segment that is maturing rapidly.

I wrote some time ago about the power of word-of-mouth and how it had been rated as the most trusted form of advertising by consumers. Recommendation is highly valuable to any brand and likewise getting the wrong kind of PR from consumers who don’t like your product or service can be extremely detrimental to a brand.

The rise and rise of social media and networking on the web is going to help the online medium become the biggest platform for word-of-mouth marketing in my opinion. There are a multitude of ways you can interact with your consumers and they can feedback to others on your behalf. Facebook is proving to be huge for word-of-mouth, getting a strategy to utilise this new exposure is really important for brands right now as if they don’t control this themselves to some extent it will happen anyway without their input (which could be bad news for some).

Good news for the viral industry as well! I expect viral to take off in a massive way in 2008 as agencies and marketers work out how to integrate a good viral campaign with platforms such as Facebook and OpenSocial. This will open virals up to a much larger audience and facilitate much larger community conversations about brands.

Brand protection has never been more important so I hope you have your social media monitoring in place?

The European Union regulators have said they will be thoroughly investigating the Google DoubleClick deal after their preliminary investigations found that the deal could raise competition concerns. A deadline of 2nd April 2008 has been set to make a final recommendation.

Google has said it will work with the Commission to demonstrate the value a deal like this will give to publishers and advertisers alike.

With all the other deals happening in online advertising I’m beginning to think they should just let this deal go through. Every major internet player has had a deal go through with an ad network apart from Google, and with the likes of Facebook now launching advertising networks it is actually beginning to feel like Google is the one being hurt by this being stalled for so long.

I wonder whether Google might pull out of the deal if they can get OpenSocial moving quickly and use the demographic, social and behavioural data that they will garner from it to create their own network (or extend Adwords/Adsense)?

For the first time the new darlings of the web (social networks) have overtaken the old darling (web based email) in the traffic stakes. Hitwise have a report showing the upward trend for the social networks and the rate at which they have caught up the likes of Hotmail, Gmail and Yahoo Mail.

So, are users now using social networks instead of email? Well yes they are , naturally, they are a quick way to converse with close friends especially to groups of friends. And they’re more fun to use, something email providers will have to address (OpenSocial and Gmail perhaps?). However, email still has it’s place and the demographic data from Hitwise shows that unsurprisingly it’s the younger users who visit social networks more.

One factor we should also consider is that email is something that you visit a few times a day maybe (unless the web is your life) where as users tend to browse social networks for long periods so the traffic is bound to be higher.

Facebook news of the day

November 7, 2007

A few tidbits of insight from some of the webs best blogging reporters here today. As I’m busy I’m just going to link to them and let you read at your leisure:

The Facebook Ad Backlash Begins – an insightful look into the beginning of a possible backlash against the latest Facebook advertising announcements. My opinion; it will take time for users to understand the enormity of having their personal data in the hands of an advertising network of this scale. Expect to see the noise around this backlash grow.
Erick Schonfeld – Techcrunch

Why Is Google Afraid of Facebook? – a decent look into the reasons Google should be worried about Facebook. Traffic is only half the story, the main points are around the lack of access the Google spiders have to this data. Do Google feel shut out? Sure they do, otherwise why OpenSocial?
Om Malik – GigOM

Is Facebook Beacon a Privacy Nightmare? – a closer look at the reasons the new ‘beacon’ advertising tool from Facebook could be a privacy concern for users.
Om Malik – GigOM

I expect many more articles about the issues surrounding privacy and personal data with Facebook in the coming days, I’ll continue to post and comment on the best. I also expect the focus to switch back to Google as more news emerges about OpenSocial and it’s integration with Adsense and once the DoubleClick deal goes through it’ll probably be Google taking all the flack!

For development… Don’t get too excited as this doesn’t guarantee them dominance in the social networking world but Google have a bit of a coup as they’ve announced MySpace, Bebo and Six Apart are going to be working on Open Social too. Apparently Google have been in talks with MySpace for about a year on this (which explains the recent appetite to open up from MySpace). Techcrunch has more here.

Here’s the official announcement from Google on their blog, and here’s the link to the API’s which is now live.

And for an insight into why this is all happening, here’s a video from a Google event last night explaining more about why it’s good to be open.

The full list of Open Social members is pretty formidable (MySpace, Engage.com, Friendster, hi5, Hyves, imeem, LinkedIn, Ning, Oracle, orkut, Plaxo, Salesforce.com, Six Apart, Tianji, Viadeo, Bebo and XING). Should Facebook be worrying? Well right now all the announcements mean is that there will be an amazing amount of openness between the members of Open Social and there should be some pretty amazing development going on. It doesn’t yet mean that people will leave Facebook for anywhere else (although the chances of that will get greater).

There may be an opportunity here for an early adopter of Open Social standards to create an uber social network which features functionality and data from all the participating networks. It makes the evolution of the life stream much more important and likely to appear sooner. It also gives choice, no longer do you have to stick with anyones interface, you should be able to move away and go to other places while still keeping in touch with the networks.

As ever, Mike Arrington (of Techcrunch) has the scoop on Googles social ambitions (damn he must have good contacts).

OpenSocial is to be launched today, it’s the set of open social API’s that I discussed some time ago.

So what’s coming? Well according to Techcrunch (and as expected by me) it will be a set of common API’s open to developers, the applications created should be able to be used on any social network. So this isn’t a new social network, nor is it an upgrade of Orkut. Rather it’s a platform for extending those networks already out there, integrating Google properties into them and allowing cross communication. So this should be a way to create one app that will work across all the networks, rather than having to create a widget for each social networks codebase.

The details courtesy of Techcrunch:

OpenSocial is a set of three common APIs, defined by Google with input from partners, that allow developers to access core functions and information at social networks:

  • Profile Information (user data)
  • Friends Information (social graph)
  • Activities (things that happen, News Feed type stuff)

Hosts agree to accept the API calls and return appropriate data. Google won’t try to provide universal API coverage for special use cases, instead focusing on the most common uses. Specialized functions/data can be accessed from the hosts directly via their own APIs.

Unlike Facebook, OpenSocial does not have its own markup language (Facebook requires use of FBML for security reasons, but it also makes code unusable outside of Facebook). Instead, developers use normal javascript and html (and can embed Flash elements). The benefit of the Google approach is that developers can use much of their existing front end code and simply tailor it slightly for OpenSocial, so creating applications is even easier than on Facebook.

Applications can have full functionality on profile and/or canvas pages, subject to the specific rules of each host. Facebook, by contrast, limits most functionality to the canvas page, allowing a widget on the profile page with limited features.

OpenSocial is silent when it comes to specific rules and policies of the hosts, like whether or not advertising is accepted or whether any developer can get in without applying first (the Facebook approach). Hosts set and enforce their own policies. The APIs are created with maximum flexibility.

Sounds like just what’s needed to me! As well as working with Orkut the API’s will allow developers to work with Salesforce, LinkedIn, Ning, Hi5, Plaxo, Friendster, Viadeo and Oracle. That’s a pretty formidable set of services to be able to play with through API’s! And the great thing for developers is that it’s using common development languages rather than proprietary like Facebook and some other networks, this will get massive take up straight away.

This puts Google in the unique position of not owning the networks but rather being at the centre enabling them to control and push forward the usefulness of them. Something that sites very well with their company mantra.

The OpenSocial API’s should be available at this link later today.

Both Techcrunch and Venture Beat have posts about the forthcoming (still rumoured though) ad technology from Facebook. Word is that it will use cookies to track users data and activity on Facebook and then serve them ads based on that data when they leave the social network and browse other web properties.

Sound idea! Facebook profiles carry a wealth of data that could be of use to ad serving technologies.

Now, this won’t work unless there is a third party cookie involved which is tied to the ad network and not Facebook. Otherwise the cookie would only be of use to serve ads while on the Facebook site. So will this cookie be part of Microsofts ad serving technology, another third party ad network who Facebook could sell the data to or will Facebook go it alone and set up an ad network?

It’s an opportunity for Facebook to make some serious money, although I really doubt the valuation touted by Venture Beat. $100 billion will not be seen from an online company in the near future I’d be willing to bet. The ads served through this technology will be very targetted though (potentially more than ever before), great news for those of us in online travel who suffer high CPM’s and low clickthroughs due to the lack of targetting data available currently.

Only issue with this is the prevalance of cookie blocking technology. Any ad network using this cookie will get listed on all the blocking sites and software very quickly and also the knowledge that this is happening could turn off a large amount of Facebook users very quickly.

It’s supposed to be announced on the 6th November, so I’ll reserve final judgement until then. Perhaps Double Click will be the partner of choice ;-)

Compete.com have released some stats listing the top 50 website domains by unique visitors on their blog today. It makes for some interesting reading:
Yahoo is still the biggest domain in terms of unique users. Not surprising given their huge coverage, surely they have to come up with a way to make a success of all these eyeballs? They may lose out in search to Google but with such a vast web real estate finding a way to leverage that is key for them. Google however coming second is amazing considering their core is still search!

Facebook at number 21 is a bit of a surprise, I’d assumed they’d be higher given the buzz but perhaps they’ll position much higher next year (if their bubble doesn’t burst).

The growth figures in the blog post are most intersting, showing sites such as YouTube, Flickr and Digg as some of the biggest gainers (bigger even than Facebook). This certainly is the time of sharing content, something Facebook has yet to get right (they started off well but it’s lately disolved into MySpace’esque profile vanity).

Adult dating still a major growth area it would seem; the person who launches a Facebook for this domain will win big!

Of the losers, most intersting for me is the losses experienced by Expedia. This can only be down to the emergence of much better sites that give users more intuitive ways to search for flight & hotel availability. Online travel is much more competitive in that arena this year and with the move from tour operators to embrace dynamic packaging I can only see Expedia losing more eyeballs if they don’t make some significant functionality changes soon.

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