Thoughts from the Shelf

The long awaited update to social networking site Facebook, aimed at making it easier to receive update on the activities of friends that was first announced on The Shelf in ‘Facebook Plans A Facelift‘ back in May, was unveiled today.

As part of the redesign Facebook users will be able to see the activity of users they are networked with through a central interface, which is intended to give the site a tidier look.

At the end of 2007 Facebook was reported to have recorded its first ever drop in users figures, with an additional 5% also recorded in the UK through the first three month of 2008. The loss was estimated to account for up to 400,000 users, and many suggested that users were growing tired of the increasing number of third party applications that resulted in congested profile pages with longer loading times.

By tidying up the site and combining several different menus into a single navigation bar, and adding together features such as adding photos and videos to one single tab called ‘publisher’, Facebook aims to have a cleaner and less cluttered look, and essentially win back the users it started to loose in early 2008.

Social networking rival MySpace also launched a new cleaner look last month after it had experienced similar drops in user activity.

As part of the new look Facebook has launched, users will still be able to add a range of third party applications, however these will now reside under a new tab away form the user main profile.

If you would like a sneak peak at the new Facebook site then visit new.facebook.com

For some detailed user statistics on Facebook and other Social Networking sites read Social Network Stats: Facebook, MySpace, Reunion

Today a new report has been released that cites there are now more reasons to justify buying a PlayStation 3 than there are to buy rival gaming console the Xbox360.

In 2007 the Sony console lost out to its rival in terms of sales, however 2008 sales statistics show that the PS3 is gaining significantly on Microsoft’s offering. In the first five months of the year Sony have put the increased sales down to new games released exclusive to its platform, such as that of the popular title ‘Metal Gear Solid 4’.

The Sony console has also seen a rise in sales thanks to the victory of Blu-ray as a dominant high definition DVD format after Toshiba’s HD-DVD was dropped by a series of Hollywood studios early this year to be replaced by its Sony rival. (The Blu-ray vs HD DVD Format War)

“For the first time since the console launched, I really think there’s more reason to buy a PS3 than the 360” - Todd Greenwald, Signal Hill Capital Group analyst.

The rivalry between the two console formats will be sure to heat up later this week as console makers and game publishers meet for the E3 Business and Media Summit in LA. At the conference Sony plans to demonstrate the DVD capability of the PS3, as well demonstrating ‘Little Big Planet’, a social-networking game that can be played online through the two-year-old console.

In an effort to increase the appeal of its console Microsoft plans to triple the storage capacity of the Xbox360, selling 60 GB consoles in August, whilst keeping the starting price the same at $349.

Being introduced a year prior to the PS3 and Wii in 2005 gave the Xbox a 12 month head start, however it is the case that over the last 15 months, 14 of them have seen more Wii consoles shifted than Xbox 360’s or PS3’s.

With each console sold also comes hundreds of extra dollars in revenue of boxed games, downloads, and royalties from third party game developers.

“This battle (between the PS3 and Xbox360) for second place is quite relevant, they lose revenue stream for years ahead based on what people buy.” - Wedbush Morgan Securities analyst Michael Pachter

In the first five months of 2008 Nintendo sold 2.8 million units compared to 1.2 million PS3 unit and 1.12 million Xbox360 units.

That said Sony doesn’t see Nintendo as a competitor as the console doesn’t offer the broad range of services its console does, such as the ability to watch movies and access the internet.

“I don’t see it as a competitor. It’s more of an expensive niche game device. We’re selling a lot of PlayStation 3s now and it’s still the best way to buy a Blu-ray player.” - Sony Chief Executive Officer Howard Stringer

Users of photo sharing site Flickr will now be able to make money from pictures posted online after a deal was made with Getty Images the world leading photo library.

As part of the deal Getty Images will invite Flickr users to join a social group on their website that will be co-branded with Flickr. The handpicked photos will then be sold by Getty Images with photographers earning a commission on each sale.

The deal marks the first commercial licensing deal made through the Getty Images site.

The service will remain strictly invite only, with each member having an opt in/ out clause.

The deal is said to be part of Getty Images objective to increase its level of regionally relevant content.
“Flickr’s philosophy of personal sharing and immediacy has already impacted commercial photography,” said Getty’s Andy Saunders.

He went on to add that “The new Flickr collection will expand the definition of stock photography by making it even easier for our customers to find and license imagery that works in the full range of traditional and digital media.”

Owned by Yahoo, Flickr has a customer base of around 54 million users each month hosting 2 billion pictures. In the hour of this post being written alone, over 4,000 file uploads were made, and this deal with Getty Images is seen as an way of bringing licensing expertise to customers who want to bring their images to a global customer base.

Getty Images itself is only ten years old, but has aggressively bought a range of online and offline rivals in that time, until private equity firm Hellman & Friedman for $2.4bn in February this year, bought with the intention of turning Getty Images into a global digital media operation.

Talking to the New York Times about the deal with Flickr, Getty Images said it expects that rights-managed images should earn the photographer around £75-£121, whilst non-exclusive image should earn them around £25.

Social networking site and regular feature of The Shelf Facebook.com is due to have a face lift four years after it was first launched.

Having grown rapidly in popularity since its launch with a vast expanse in the number of applications available on the site, for those who adopt each and every new tool into their profile Facebook has itself changed from a simple user friendly interface into an un-navigable mess.

A result solely of its explosion in popularity over the four years it has been live, the amalgamation of endless applications on user profiles has recently be touted as a reason many have been switched off from the site.

Currently there are over 25,000 different pieces of software available ranging from dating games to music players and time-wasting quizzes.

The facelift plans are due to include several tabbed section that will effectively hide all the ‘super wall posts’ and silly gifts that users can send to each other, often resulting in an cluttered interface more associated with rivals MySpace than Facebook.

That roll out of the new design is planned for next month and Facebook has been consulting users over its plans. 85,000 Facebook users around the world have been able to comment on new features as they are proposed.

Screen shot of plans from BBC

Facebook currently leads the social network market in the UK with 8.9 million members according to Nielsen Online, but a significant proportion of these are threatening to leave if it become a victim of over commercialisation. A delicate balance is needed between the traditional clean interface users expect and the third party add-ons that have driven its vast growth.

Google has developed it OpenSocial platform by introducing a series of tools aimed at enhancing the way in which users interact with friends over the internet.

The service called Friends Connect is aimed at allowing sites that are not part of the social network scene, to provide a more social experience for their users. This can be done through the provision of various social gadgets created by Google and OpenSocial.

It works by providing social gadgets through a Friends Connect administration site which can then be used based on the needs of an individuals site. The site owner simply copies across the necessary code across to their site providing a range of social features without the need for sophisticated programming.

As part of the service site owners can then link to a range of sites for various functions, including Facebook, Yahoo and AOL. Users can also user the Google talk instant messaging system.

With this a list of contacts and friends can be imported from other social networks, where you can see names and photos of friends who are members of a specific site.

“Google Friend Connect is like giving Webmasters a salt shaker full of ’social’ that they can sprinkle on their sites to add social capabilities,” David Glazer, a director of engineering at Google told a conference call of reporters Monday.

One of the early advantages to sites is that Friend Connect provides a means of user identification through an existing log in on AOL, Yahoo and many more from the emerging OpenID standard.

The Friends Connect service is based on the OpenSocial platform that up until now has remained a way to write applications for a range sites across the partnership.

Recently MySpace announced plans to loosen its hold on data of an estimated 200 million personal profiles that currently use it’s site, a deal that would enable members to share information to be shared with four partners, Yahoo, PhotoBucket, Twitter and eBay.

The user would be tied to MySpace as a central profile for use across all sites, encouraging users to store all their data needed for a complete web experience at the site to begin with.

Facebook also entered a deal a day after the MySpace announcement with its 70 million users, allowing profiles to be shared with any site wanting to host them.

“It’s a smart move by Google which is trying to play the role of United Nations secretary general by making sure everyone talks nicely to one another, getting the data to where they want to move it back and forward, and participate in open standards.” - Charlene Li, principal analyst at Forrester

Currently 99% of sites are not socially enabled so there is a huge market for the Friend Connect service, and the user data flow through the service is a lucrative offering.

In these early stages however there are things that are yet to be decided. One major decision is how Google intends to share the information that is collated through the Friends Connect service with web publishers. Currently user details of those who log into a site through Friends Connect will not be given to site owners. This may change in the future, but there are issues residing as to how sites like Google, and Facebook or MySpace have very different privacy objectives.

As can be seen with the Facebook and MySpace data sharing announcements, existing social network sites are looking to make their networks the place for a central profile from which users will adopt a complete identity across the web. Google on the other hand is not currently prioritising these social network profiles, instead focusing around small web publishers harvesting the flow of data with its AdSense advertising network which is already serving millions of sites.

With Google expected to approve a few dozen more sites to the Friends Connect service, and MySpace and Facebook due to roll out their offerings over the next few weeks I guess we will have to wait and see how this one develops.

Microsoft today launched their new Messenger TV service (Screen shots of which are here), an add-on to their popular MSN instant messaging service, allowing users to watch videos online whilst exchanging messages.

Through the Windows Live Messaging console these videos can then be easily shared amongst friends in your IM community, creating what is said to be a unique social experience and opening up an untapped advertising market.

The service will provide a range of TV clips several minutes in length, provided by companies such as UK based Channel 4. Channel 4 will provide clips of shows including Peep Show, Property Ladder, Father Ted and Shameless, whilst other content producers will include ITN, Reuters and National Geographic as well as record label EMI.

Other content tipped to be played on the service includes South Park and Pimp My Ride, as well as music videos from Kylie to Britney Spears. The service will run adverts ahead of the clip as well as an advertising banner throughout the duration of playback.

The service is initially being launched in 20 countries, many throughout Europe, which is home to 95 million Windows Messenger users. Microsoft has around 14 million monthly unique users of Windows Live Messenger in the UK alone. It will also launch in New Zealand, Australia, Singapore, Brazil, Canada and Mexico but not the United States.

“We see Windows Live Messenger as media in its own right, one that has been somewhat untapped as an opportunity,” - MSN UK exec producer Peter Bale.

Channel 4’s director of new media technology John Gisby commented on the deal with Microsoft.

“Our core audience is spending increasing amounts of time online and expects to be able to watch its favourite Channel 4 shows this way.”

John Mangelaars, the vice-president, EMEA, of consumer and online for Microsoft said “Online video has exploded in popularity over the last year, but to date it has been something people watch on their own. Messenger TV is set to change all that,”

The move by Microsoft comes less than a week after they pulled out of a long run take over approach for Yahoo, aimed primarily at its position in the online advertising market. This move certainly demonstrates the company’s eagerness to expand into that market.

In even more social networking news, it was announced today that internet portal AOL has bought social networking site Bebo for £425 million.

Bebo was launched three years ago and has a membership of over 40 million worldwide users, combining “community, self-expression and entertainment to enable its users to consume, create, discover and share content.”

Bebo is one of the leading social networking sites in the UK and the US trailing rivals Myspace and Facebook. Bebo also leads the market in New Zealand and Ireland, and is run by only 100 employees spread across three global office locations.

At first this seems a lot of money for a company with such few resources, but when you consider News Corp bought MySpace for $580m in 2005 which is now estimated to be worth more than $15bn, and Microsoft bought only 1.6% of Facebook last year for $240m, the price doesn’t seem so high.

A quote from AOL chairman Randy Falco says: “Bebo is the perfect complement to AOL’s personal communication network and puts us in a leading position in social media. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”

With its acquisition of Bebo it is clear that AOL see the social networking site as an advertising goldmine which will allow them to offer advertisers access to user targeted adverts based on comprehensive user profiles and trends.

The average Bebo user views on average 78 pages a day with a daily average of 33 minutes a day being spent on the site.

“Bebo has an incredibly strong brand identity, particularly with the teenage and young adult market, so it will be very interesting to see how AOL makes best use of their new youthful Trojan horse.” - Alex Burmaster, European Internet Analyst

Research outfit eMarketer recently released a report stating that by 2011 $4.1 billion will be spent worldwide on social network advertising, up from $480 million in 2006. It is clear the struggling internet portal is looking for a significant chunk of this to turn its fortunes around.

In relation to The Shelf’s popular social networking themed posts, news broke last week that Facebook has raided Google in order to fulfil the position of chief operating officer. The position was filled in order to provide Facebook, who last month saw their first ever dip in visitors, with a more experienced management and advertising figure as the company tries to make more money out of targeted advertising without alienating users.

The defection by Sheryl Sandberg from internet search giant Google was first announced last Tuesday marks a period of adjustment for Facebook who only three months ago suffered huge setbacks in efforts to inject more commercialism into is social site.

In her time at Google Sandberg has helped the search giant build up one of the most rivalled advertising models in the world in the position of vice president of global online sales and operations.

No doubt 23 year old founder Mark Zuckerberg will use the opportunity as somewhat of a mentoring scheme in how to future direct Facebook’s expansion, who Sandberg will report directly to.

Of the capture of Sandberg Mark Zuckerberg stated that she is “a great manager who will help scale Facebook’s operations globally,”

In the past eleven months Facebook has seen its user base triple to 66 million users, becoming the second largest social networking site behind Myspce. But Facebook remains dwarfed even further by Sandberg’s former employers who make more than $16 billion to Facebook’s $100 million in annual revenue.

There have also been recent mistakes by the Facebook owner that have led to questions about Zuckerberg’s judgement after marketing tool Beacon was allowed to track users’ purchasing patterns across dozens of sites and display the information on pages of listed friends within the Facebook network.

But although mistakes have been made and the social networking site has plateaued of late, many still expect great things in the future. Planning to go public in 2009/10 Facebook could still turn out to be the biggest internet success story since Google went public in 2004.

Throughout 2007 The Shelf has extensively featured some of the most popular bits of technology released. From Facebook to the iPhone to the PS3 we have featured articles on all three, but as we move into the New Year The Shelf looks at some technologies that could have a bright twelve months ahead of them over the next five days.

The first technology sees us look at the mobile internet. Currently restricted to where there is an internet connection, web applications have there restrictions, and although mobile internet access is becoming increasingly popular unlimited connectivity regardless of location is a long way off.

Last year we saw three technologies launched by Google, Adobe and Microsoft that are aimed at blurring the boundaries between offline and online environments. Named Gears, Air and Silverlight respectively, each application aims to take endless achieves of web content and make them available offline.

Adobe’s has already demonstrated an Ebay type Desktop application using Air which allows users to do all the work of setting auctions up offline, with the auction going live the next time the user connects to the internet.

“Adobe AIR lets developers use their existing web development skills in HTML, AJAX, Flash and Flex to build and deploy rich Internet applications to the desktop”

Silverlight offers and reversal of this service in that it allows desktop applications to be built and run within a web browser.

“Silverlight enables developers and designers to easily use existing skills and tools to deliver media experiences and rich interactive applications for the Web.”

Gears does not allow the creation of new applications but does allow users to take web applications offline. Google Gears would therefore allow developers of online office package Zoho to use Gears to allow users to use their applications in a similar way to that of a normal desktop program.

“Google Gears Beta is an open source browser extension that enables web applications to provide offline functionality using JavaScript APIs”

As part of The Shelf’s first technology of 2008 we tip more examples of applications built with or using these three tools to further merge the online and offline user experience.

Social networking site Bebo yesterday announced plans to link up with rival Facebook that will allow software developers to create applications that can be used across both sites. With nearly 100 million the move will provide developers with the opportunity to develop compatible features for both networks.

Recently The Shelf documented plans from Google to create Open Social, a similar cross network development strategy for which a number of big social networking sites signed up for, excluding Facebook. Open Social was supported by Myspace which alone has 110 million users.

Facebook had huge success after first opening up its network to developers, and now within a few hours the same application could be run on Bebo. Since Facebook started to allow third party applications six months ago thousands of applications have been developed for the social networking site.

As part of the deal however Bebo profiles will not be able to link directly to Facebook users, a step that acknowledges both Facebook and Bebo audiences use each social network for differing purposes.

“We think people use social networks for different things: Facebook is a great social utility, whereas you use Bebo to share media and entertainment.”

Bebo is part of the Open Social alliance as well and is the only network to complete deals that cross both alliances. The interaction of both APIs will be live by early 2008.