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Facebook will lose 80% of users by 2017, say Princeton researchers -- Juliette Garside

http://www.theguardian.com/technology/2014/jan/22/facebook-princeton-researchers-infectious-disease

Researchers predict that Facebook will become a small shadow of its current size, based on the tailing off off Google searches for the name. This is what befell Bebo and Myspace, and they believe it’s a contagion model, like passing germs around.

excerpted from The Guardian

John Cannarella and Joshua Spechler, from the US university’s mechanical and aerospace engineering department, have based their prediction on the number of times Facebook is typed into Google as a search term. The charts produced by the Google Trends service show Facebook searches peaked in December 2012 and have since begun to trail off.

"Ideas, like diseases, have been shown to spread infectiously between people before eventually dying out, and have been successfully described with epidemiological models," the authors claim in a paper entitled Epidemiological modelling of online social network dynamics.

"Ideas are spread through communicative contact between different people who share ideas with each other. Idea manifesters ultimately lose interest with the idea and no longer manifest the idea, which can be thought of as the gain of ‘immunity’ to the idea."

Facebook reported nearly 1.2 billion monthly active users in October, and is due to update investors on its traffic numbers at the end of the month. While desktop traffic to its websites has indeed been falling, this is at least in part due to the fact that many people now only access the network via their mobile phones.

For their study, Cannarella and Spechler used what is known as the SIR (susceptible, infected, recovered) model of disease, which creates equations to map the spread and recovery of epidemics.

They tested various equations against the lifespan of Myspace, before applying them to Facebook. Myspace was founded in 2003 and reached its peak in 2007 with 300 million registered users, before falling out of use by 2011. Purchased by Rupert Murdoch’s News Corp for $580m, Myspace signed a $900m deal with Google in 2006 to sell its advertising space and was at one point valued at $12bn. It was eventually sold by News Corp for just $35m.

The 870 million people using Facebook via their smartphones each month could explain the drop in Google searches – those looking to log on are no longer doing so by typing the word Facebook into Google.

But Facebook’s chief financial officer David Ebersman admitted on an earnings call with analysts that during the previous three months: “We did see a decrease in daily users, specifically among younger teens.”

Investors do not appear to be heading for the exit just yet. Facebook’s share price reached record highs this month, valuing founder Mark Zuckerberg’s company at $142bn.

I’ve been saying for year that Facebook is the new AOL. Like AOL, it was a gateway to a new world online — in Facebook’s case the social web, in AOL’s, the early, pre-social web — and everyone relied on it as a common denominator. And they proved that you can make a business on simplifying the complex for novices, but they won’t remain long. 

Teenagers and hipsters — who define new social scenes — are abandoning Facebook, as the company has admitted. Those are the canaries in the coal mine, portending the demise of the once great Facebook.

Rupert Murdoch warning Facebook to watch its six. And, yes, he did buy “crappy MySpace” in July 2005 for $580M, and sold it for $20-30M in 2011. He paid a half a billion to learn that lesson. I wonder how much Facebook stock he has?

Viggle And GetGlue Maybe Getting Glued?

Reports of Viggle’s acquisition of GetGlue might be a bit hasy, since the deal between the two social TV players is contingent on Viggle raising an additional $60M in financing.

Viggle buys GetGlue in social TV consolidation play - The AppSide

Viggle’s latest financials report reveals that in the year to 30 June 2012 its revenues were $1.7m, while its net losses were $96.5m.

$100M to build a social TV application? What are they doing with all that money? It’s preposterous. That’s more than MySpace burned through in the last year, and I thought they had set the bar.

I think the reality is that people are more likely to simply continue using Twitter or Facebook when watching TV instead of switching to a specialized app. 

MySpace Wants To Pivot

I have a hard time imagining it, but the folks that have reanimated the zombie social network, MySpace, are hoping for yet another pivot. Last summer, News Corp sold MySpace to a group of investors for $35M after buying it for $580M a few years earlier and pouring who knows how much into it along the way. MySpace’s owners want to pivot into a Pandora/Spotify music service. 

Ha.

LEAKED: MySpace’s Master Plan To Raise $50 Million And Relaunch As A Spotify Killer - Nicholas Carlson via Business Insider

Since December 2011, MySpace traffic is up 36 percent.

But MySpace continues to flounder commercially. Documents show that it will generate revenues of just $15 million this year, up from a miserable $9 million in 2011. MySpace lost more than $40 million in 2012. Interactive Media expects it to lose another $25 million next year.

Meanwhile, Interactive’s other big property, Specific Media, took a hit as ad buyers turned to real-time bidding solutions over traditional ad networks. Revenues declined from $42 million in 2011 to a projected $35 million in 2012 — both down from a high of $60 million in 2010.

Now, Interactive Media holdings is out looking for another $50 million in funding.

In pitch materials dated from November 16, 2012, Interactive says it plans to use most of the money to re-launch MySpace as an alternative to Pandora and Spotify. Of the $50 million, $10 million will go to marketing, $15–$25 million will go to licensing deals with the music labels, and another $15 to $25 million will be reserved for “general working capital.”

Interactive says it plans to launch a music subscription business for mobile in the second quarter of 2013. 

Somehow, despite all the losses, I have the feeling these folks will get the cash to make this latest effort.  There is a lot of dumb money out there.

The Next Big Thing Is Eating The Lunch Of Something That Was Big A Decade Ago

Someone who hasn’t fallen for George Orwell’s trope ‘whoever is winning now will always seem to be invincible.’

Here’s Why Google and Facebook Might Completely Disappear in the Next 5 Years - Eric Jackson via Forbes

In the tech Internet world, we’ve really had 3 generations:

  1. Web 1.0 (companies founded from 1994 – 2001, including Netscape, Yahoo! (YHOO), AOL (AOL), Google (GOOG), Amazon (AMZN) and eBay (EBAY)),
  2. Web 2.0 or Social (companies founded from 2002 – 2009, including Facebook (FB), LinkedIn (LNKD), and Groupon (GRPN)),
  3. and now Mobile (from 2010 – present, including Instagram).
We will never have Web 3.0, because the Web’s dead.

With each succeeding generation in tech the Internet, it seems the prior generation can’t quite wrap its head around the subtle changes that the next generation brings.  Web 1.0 companies did a great job of aggregating data and presenting it in an easy to digest portal fashion.  Google did a good job organizing the chaos of the Web better than AltaVista, Excite, Lycos and all the other search engines that preceded it.  Amazon did a great job of centralizing the chaos of e-commerce shopping and putting all you needed in one place.

When Web 2.0 companies began to emerge, they seemed to gravitate to the importance of social connections.   MySpace built a network of people with a passion for music initially.  Facebook got college students.  LinkedIn got the white collar professionals.  Digg, Reddit, and StumbleUpon showed how users could generate content themselves and make the overall community more valuable.

Yet, Web 1.0 companies never really seemed to be able to grasp the importance of building a social community and tapping into the backgrounds of those users.  Even when it seems painfully obvious to everyone, there just doesn’t seem to be the capacity of these older companies to shift to a new paradigm.  Why has Amazon done so little in social?  And Google?  Even as they pour billions at the problem, their primary business model which made them successful in the first place seems to override their expansion into some new way of thinking.

Social companies born since 2010 have a very different view of the world.  These companies – and Instagram is the most topical example at the moment – view the mobile smartphone as the primary (and oftentimes exclusive) platform for their application.  They don’t even think of launching via a web site.  They assume, over time, people will use their mobile applications almost entirely instead of websites.

We will never have Web 3.0, because the Web’s dead.

Web 1.0 and 2.0 companies still seem unsure how to adapt to this new paradigm.  Facebook is the triumphant winner of social companies.  It will go public in a few weeks and probably hit $140 billion in market capitalization.  Yet, it loses money in mobile and has rather simple iPhone and iPad versions of its desktop experience.  It is just trying to figure out how to make money on the web – as it only had $3.7 billion in revenues in 2011 and its revenues actually decelerated in Q1 of this year relative to Q4 of last year.  It has no idea how it will make money in mobile.

The failed history of Web 1.0 companies adapting to the world of social suggests that Facebook will be as woeful at adapting to social mobile as Google has been with its “ghost town” Google+ initiative last year.

The organizational ecologists talked about the “liability of obsolescence” which is a growing mismatch between an organization’s inherent product strategy and its operating environment over time.  This probably is a good explanation for what we’re seeing in the tech world today.

Are companies like Google, Amazon, and Yahoo! obsolete?  They’re still growing.  They still have enormous audiences.  They also have very talented managers.

But with each new paradigm shift (first to social, now to mobile, and next to whatever else), the older generations get increasingly out of touch and likely closer to their significant decline.  What’s more, the tech world in which we live in seems to be speeding up.

People forget how indomitable AOL seemed, and the promise of Netscape and MySpace, before they fell into the dustbin. As I have said before, Facebook is the new AOL, although Johnson is making a different case for that. I have been presaging the rise of social operating systems — which would invalidate Facebook’s near-monopoly on people’s social inclinations — while he points to the rise of mobile, and says

Considering how long Facebook dragged its feet to get into mobile in the first place, the data suggests they will be exactly as slow to change as Google was to social.

And that’s is not a good place to be.

I agree with Jackson: the rate of change is not slowing, so the monopolies of today are likely to be shorter-lived than those of even a decade ago. And the new world beaters are possibly companies that don’t even exist yet, but whenever they crop up we will first notice them when they start stealing users, market, and attention from the formerly indomitable killer apps of the preceding era.

News Corp. is about to sell Myspace for $20 million-$30 million, Kara Swisher at All Things D reports.

The groups vying for the remains of Myspace are Golden Gate Capital, a PE firm with $9 billion under management, and Specific Media, an ad network.

News Corp.’s fiscal year ends this Thursday, so it’s looking to wrap up the sale before the end of the fiscal year, so it can get Myspace off the books for 2012.

This is quite the come down for Myspace. News Corp paid $580 million for Myspace in 2005. When it started selling Myspace this year, it was looking for $100 million.

Jay Yarrow, Myspace Is About To Be Sold For $30 Million

Wow. Sam Wick, SVP Strategy at MySpace, was called away last night after the LA Future Of Work talk he participated in. I bet it had something to do with this deal.

A drop from $580M, to way below the $100M being shopped. I wonder what the buyers think they can do with it?


Andrew Lipsman, The Network Effect: Facebook, Linkedin, Twitter & Tumblr Reach New Heights in May
Beginning with Linkedin, the popular business networking site’s success should not come as a complete shock following its blistering May 19th IPO.  Others can debate the merits of the company’s current valuation, but I  will simply point out that there is definite underlying strength in  Linkedin’s user adoption curve at the moment. In fact, it has reached  all-time U.S. audience highs in 7 of the past 12 months and has grown 58  overall percent in the past year. As Linkedin continues its evolution  from being an online business rolodex to a more social and interactive  content experience, it will be interesting to see if its rapid visitor  growth is accompanied by a surge in user engagement.
Twitter.com also had a particularly strong month in May with 27  million U.S. visitors, representing an increase of 13 percent in the  past year. (Note: while much of Twitter’s usage occurs away from the  Twitter.com site, past comScore research has indicated that  approximately 85-90% of Twitter users visit the website each month).  Twitter’s success in May can likely be attributed in part to the  exceptionally buzzworthy news story of Osama Bin Laden’s death, as well  as ongoing discussion of the Royal Wedding.
Also not to be overlooked is social blogging site Tumblr, which has  made some noise this year and become a serious player in the social  networking category.  The site has grown an impressive 166% in the past  year, reaching 10.7 million visitors in May, its first month ever  surpassing the 10 million visitor mark. Tumblr is clearly experiencing a  viral adoption curve right now and may be nearing that point at which  other social media sites begin have reached that critical mass threshold  that propels it to more widespread adoption. It still has a ways to go  before we can mention it in the same breath as Linkedin or Twitter, but  it just might get there if it maintains its current trajectory.

Tumblr has doubled its monthly uniques in a year, while Twitter and LinkedIn are growing more gradually, but still moving fast.
Comscore also displayed a graph showing Facebook and Myspace, implying that the defecting Myspace users were moving to Facebook. Considering the wave of musical types flooding into Tumblr, I bet it is more a factor in Tumblr’s growth.

Andrew Lipsman, The Network Effect: Facebook, Linkedin, Twitter & Tumblr Reach New Heights in May

Beginning with Linkedin, the popular business networking site’s success should not come as a complete shock following its blistering May 19th IPO. Others can debate the merits of the company’s current valuation, but I will simply point out that there is definite underlying strength in Linkedin’s user adoption curve at the moment. In fact, it has reached all-time U.S. audience highs in 7 of the past 12 months and has grown 58 overall percent in the past year. As Linkedin continues its evolution from being an online business rolodex to a more social and interactive content experience, it will be interesting to see if its rapid visitor growth is accompanied by a surge in user engagement.

Twitter.com also had a particularly strong month in May with 27 million U.S. visitors, representing an increase of 13 percent in the past year. (Note: while much of Twitter’s usage occurs away from the Twitter.com site, past comScore research has indicated that approximately 85-90% of Twitter users visit the website each month). Twitter’s success in May can likely be attributed in part to the exceptionally buzzworthy news story of Osama Bin Laden’s death, as well as ongoing discussion of the Royal Wedding.

Also not to be overlooked is social blogging site Tumblr, which has made some noise this year and become a serious player in the social networking category. The site has grown an impressive 166% in the past year, reaching 10.7 million visitors in May, its first month ever surpassing the 10 million visitor mark. Tumblr is clearly experiencing a viral adoption curve right now and may be nearing that point at which other social media sites begin have reached that critical mass threshold that propels it to more widespread adoption. It still has a ways to go before we can mention it in the same breath as Linkedin or Twitter, but it just might get there if it maintains its current trajectory.

Tumblr has doubled its monthly uniques in a year, while Twitter and LinkedIn are growing more gradually, but still moving fast.

Comscore also displayed a graph showing Facebook and Myspace, implying that the defecting Myspace users were moving to Facebook. Considering the wave of musical types flooding into Tumblr, I bet it is more a factor in Tumblr’s growth.

Decision day for MySpace - Telegraph

http://www.telegraph.co.uk/technology/social-media/8554892/Decision-day-for-MySpace.html

Emma Barnett, via

The deadline for all bids to buy the struggling social network for a reported price tag of $100 million is understood to be at the close of play of today, Eastern time.

However, none of the potential buyers are believed to have offered enough money in their scheduled bids to date, leaving the competition wide open, according to Allthingsd, a leading technology blog.

Kara Swisher, author of the blog, said: “No one has yet made a good enough bid – in other words, at the more than $100 million level its owner, News Corporation, has sought, [in order] to knock out anyone else.”

Interested parties include Criterion Capital Partners, the private equity company which bought Bebo from AOL last year, and also Mike Jones, the social network’s chief executive.

It’s exactly what will happen to Facebook when social operating systems take root. Who wants to fool around in a social silo when you don’t have to? When following other people is a built-in capability of any computing device Facebook will be just another app, and Twitter will just be one brand of plumbing.

Still: I thought AOL or Yahoo would have been behind the times enough to buy it.

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