Running With Foxes

As often happens in the valley, people switch jobs. Speaking from experience, people around here have a certain sense of innovation ADD. After you stay at a job for a while, there’s just a depreciating return in experience for every additional month you continue. So, it’s no great surprise that one of the valley’s Jet setters, Adriana Gascoigne, has moved into a new position. Adriana has switched Ogilvy to my favorite part of the internet right now, social networking. She’s joining up with one of the largest stealth social networks, Hi5, and has a whole going away post about it today.

I say stealth because the tremendous growth of the site has gone largely unnoticed by valley reporters. As Adriana describes, Hi5 is “1.) World’s fastest growing social network among the top-10 global social networks 2.) Based on the June comScore Media Metrix worldwide figures released in June, hi5 grew 79% in the first half of 2008 3.) hi5’s monthly unique visitors increased from 31.4 million in December 2007 to 56.4 million in June 2008″.

She also goes on to say the site has some exciting new product set to launch. I’ll be interested to see what they come up with. For me the next two years will be marked by the “digestion” of social networking by the web at large. We’ll see the incorporation of social features into new websites through technologies like “Facebook Connect” and a new traffic generating paradigm will emerge, discovery. Natrually I also have a great deal of faith in how advertising will fit into that equation, but that’s for me to but Adriana about later.

It looks like Top Friends is completely wiped from the FB app directory. I can’t even access it through the the original app link, nor find it in searches. TechCrunch and InsideFacebook are reporting the same. It looks like this wasn’t planned by Slide either, considering the promo for Top Friends on their site forwards to Human Pets. Normal downtime is also usually accompanied by a note from Facebook.

I’ve heard chatter in the dev community that Facebook doesn’t like Slide and Rock You’s top apps because it sees them as spammy. While I disagree (uninstalling is only a click away…), networks banning apps isn’t anything new. MySpace routinely shut down widget providers on their network, most famously on the eve of the Photobucket acquisition.

While I’ll be on a plane for the rest of the day, I’ll be curious to see what the reasons behind the deletion are. Was it Facebook? Was it a hacker? Was it Slide prepping a new launch?

Consider this a public service announcement for bloggers and public relations professionals. The A-List bloggers are the A-List for a reason. I hold TechCrunch, Venturebeat, GigaOm, and ReadWriteWeb in that category. They work hard, write well, and respect the relationship between themselves and the companies they cover. I can’t say the same for some of the others.

But, after only four months on the job, the new startup (SocialMedia.com), I’ve already been burnt by “embargo busting”. It happened to startups when I was at TechCrunch and now it’s happened to me. Today SocialMedia released a new product called “Social Banners”. I’m excited about them and think they’re the most exciting thing going on in advertising right now (either a testament to the innovation or lack thereof).

However, a blogger released the story ahead of time, which I only found out about while pitching the story (I’m not directly involved in our PR efforts, but I help where I can). Not only did the blogger break the embargo, but they did a half-assed job of covering the launch. They missed rather obvious details calling the technology “Friendship Rank” instead of “FriendRank”.

But not only does the work reflect badly on the blog overall, it also kills the story for a startup’s new product. I understand that accidents happen, but the A-List always looks after the startups. I’ve had embargoes broken by other blogs for stories I did at TechCrunch, but some times we were able to find a way to still deliver an interesting post.

But the best way to avoid the problem of embargo braking on stories you release is to only deal with a list of blogs you trust.

Advertising in social networks is challenging. Social networks have created highly engaging and sticky sites for their users to meet and play with friends. As a consequence, users are often more interested in each other than the advertisements. Much has been written about Facebook and MySpace’s own difficulty in making ads appealing to their users. Venturebeat has its own take. Dave Gentzel also chimes in.

But what if you had advertisements that engaged users the same way the networks do, by interacting with their friends. Today SocialMedia announced a new technology for creating advertisements within social networking applications called “Social Banners”. Social banners are social applications within ad units that let users play with their friends, while engaging with products.

These units feature a product and call to action by the user to interact with their friends. For instance, a campaign for “The Incredible Hulk” featured an advertisement for the movie along with an chance to invite you friends. Another campaign for BMW let users go for a “joy ride” with their friends in a new BMW 1 series. After a friend clicks on you in a “Social Banner”, another banner is cued up for your friend to convey the response (i.e. invite you for a joy ride). This is just a start for the technology and will evolve into more formats such as quiz questions or gifting apps.

At the core, these ads are not just about choosing a friend from the list of your publicly available friends, but about connecting users with the friends they value most. The technology behind it is called FriendRank(TM). FriendRank(TM) is a patented system that learns which people are important to you to make the ads more relevant and valuable to users.

If the ads don’t add value, users can easily opt out through a link in the ads and not see them again. The ads also only appear within applications and include no personal information outside of the publicly available profile photo and name.

As Jason wrote about over on TechCrunch, SocialMedia has paid out over $8 million to developers on social networks. It’s a good sign, and I hope it will get people thinking twice about “childish” or “pointless” applications and realize that at least these earnings are a proxy for the enjoyment people are getting out of social applications.

I also think it’s important to note that this money was not paid out for shares or as a loan. It’s earned. Teams of one, two, or three developers have created fantastic products and kick start their own media properties on that income. Networks provide massive distribution and we provide monetization.

This is why I see monetization tools from a company like SocialMedia as one of the chief enabling technologies of social platforms. That $8 million was the gas in the tank that kept platforms like Facebook, Bebo, and now more so MySpace and Hi5 going. Without it, networks would have to cherry pick and fund the applications they think will succeed. Instead, the ability for developers to make money on their own creates a free and dynamic marketplace. Facebook or MySpace doesn’t have to dream up the best applications. The monetary rewards to developers will do that.

I expect platforms to change a great deal over the next year. Applications will improve and methods of monetization will as well. I look to developers like Playfish and the brand advertisers on our network as a sign of this maturity. With companies reacting to the shift in attention toward the internet and social networks, I only expect the trend to become more pronounced.

So, Google Friend Connect went live on Orli Yankul’s blog recently (link). Like I’ve said on SocialMedia’s blog, I think it’s an important trend to watch.

Applications on webpages will be distinctly different from apps on social networks. On social networks it’s like you’re setting up shop in a mall. All the plumbing is there and foot traffic is nearby, people just need something interesting to look at or buy. Apps “in the wild” will be different. Websites are cleared land that have interesting topography, but not of the essential utilities for healthy social living. But while Google does provide some management tools, they won’t come up with every sensible utility for a website.

I see a greater opportunity for utility based applications to do something interesting with the user data pulled into the website. Invite applications, mailing lists, and messaging services will help web masters manage their user base.

As I’ve noted before, I’m working with Dave McClure on a series of high value meetups targeted at venture capitalists, and novice and experienced entrepreneurs. The events feature a presentation from top talent with moderated discussions at each table. The first event was in Palo Alto and featured a talk on speed by Mike Cassidy. Venturebeat has some great coverage of the event.

Mike Cassidy gave the keynote at our last Startup2Startup event. Mike preached speed as an integral part in creating over three quarters of a billion dollars in value from the three startups he’s founded (Xfire, Direct Hit, and Stylus Innovation). The next event will feature a talk by Chad Hurley.

To keep the quality of discussion up, the events are invite only, and I’ve been charged with corralling some top young entrepreneur talent. In order not to keep tapping the same pools of talent, I figured I’d reach out and find some new entrepreneurs with interesting opinions and ideas to the table, literally. So if you’re a first time entrepreneur (all ages) with a product and a desire to learn, let me know at nick. at. socialmedia.com.

Twitter’s negative press has got to be the envy of every other startup. Every complaint over downtime or downright incompetence just shows how vital the startup is for the services most vocal users.

Now Ustream just posted an online petition to make the service even more transparent than live blogging their recovery. Lets just hope they have more luck than Zooomr’s experiment in live coverage.