After Facebook fails • Hacker News Board

Re: After Facebook fails

#101

Post by SagelyGuru » Thu, May 24, 2012, 9:17 AM UTC

Absolutely right.

There is yet deeper issue that applies to all advertising, in the form of a simple natural law:

There is a limit on the amount of BS a person can take before taking steps to actively avoid it or at least 'tuning it out'.

Current business 'thinking' assumes that increasing advertising is always good. It does not acknowledge this saturation effect at the 'receiving end'. It essentially ignores the fact that everyone else will also advertise more and more, for diminishing returns.

The trouble with advertising is that it is like a shouting match: occasionally someone with a strong voice will obtain a temporary advantage but in the long run nobody can be heard properly, least of all modest people with something useful to say.

On a more prozaic level, dividing the FB valuation by its number of active users gives about $170. I doubt very much that an average active FB user is buying enough value from FB ads to justify this kind of advertising budget.

Re: After Facebook fails

#102

Post by mike-cardwell » Thu, May 24, 2012, 9:31 AM UTC

cletus wrote: post #44

Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has informat…

"Visit any Like-enabled site and you see a small piece of content from Facebook that tells Facebook all the sites you visit. It's a tracking cookie like any other and personally I have no problem with that"

I understand that you work for Google and that not holding this opinion would mean that you have to conclude that your employer is also very much in the wrong. But how do you justify it?

It's clearly not information that people have chosen to give to Facebook. Facebook is basically taking advantage of a technical trick in order to obtain information about their users which their users neither gave them permission to collect, nor know they are collecting. It just seems highly unethical to me. But you "have no problem" with it... How is that possible?

The thing that annoys me about it is that the browser vendors could prevent this hidden tracking quite easily. By either disabling third party cookies, or by tying them to the domain in the address bar. Hell, Safari blocks third party cookies by default, and Apple is all about usability, so it can't cause that many problems... On the other hand, why would Google and Microsoft modify their browsers in such a way as to increase our privacy at the expense of their profit.

Re: After Facebook fails

#103

Post by redwood » Thu, May 24, 2012, 9:33 AM UTC

redwood wrote: post #89

raintrees wrote: post #17

Interesting... I was just going through the phase of unsubscribing from all of the legitimate info/news sources I had subscribed to over the years to try to reduce my daily Inbox levels, and it got me to thinking about reversing the tables so I could announce when I _wanted_ to partake and for what reason, and THEN get appropriate emails, links, ads, etc.

Right on, is there a platform for this yet? Perhaps fbook can pivot to this... since it'd be tough without a big user base first. This only works for non demand-creating advertising of course.

(edit "raintree" would be a great name for such a service!!! --- hint hint, go for it!)

Re: After Facebook fails

#104

Post by pmjordan » Thu, May 24, 2012, 9:38 AM UTC

sgift wrote: post #77

polemic wrote: post #46

Earlier quoted context omitted.

Agree with just about all of that. > "Their mobile presence is at the behest of Apple, Google and (arguably) Microsoft." A majority of non-techy types I know bought smart phones because they "do facebook". There is a deeply symbiotic relationship there, and woe is the mobile maker that couldn't provide a Facebook app.

Sure, but did you notice how they use Facebook? I've watched (and asked) several of my non-techy friends and there reaction was always the same: "Yeah, I just update my feed, look for updates of my friends and that's it." I don't see how Facebook wants to make money of such an usage pattern, so at the moment it doesn't help them very much that people have smart phones to "do facebook".

Most of my FB friends seem to use the mobile app mainly for uploading photos, if my feed is to be believed. From that POV the Instagram acquisition makes sense. How they're going to make money from it I'm not sure, but location-based ads and third-party apps come to mind. Though I still have a hard time imagining the developer appeal for their hypothetical but inevitable mobile app platform.

Re: After Facebook fails

#105

Post by adventureful » Thu, May 24, 2012, 9:38 AM UTC

He leads with an extraordinarily false claim:

"The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter"

The value of Google's ad network, including the average cost per click, increased for 14 years in a row, roughly speaking. Google certainly isn't suffering from any supposed value decrease per quarter, and if that effect were actually in place, their business would be nearly worthless by now.

Re: After Facebook fails

#106

Post by klapinat0r » Thu, May 24, 2012, 9:39 AM UTC

cletus wrote: post #44

Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has informat…

> "Facebook has no search engine. Whatever you say about the size of display ads, search advertising is still far bigger. With search you have intent. People want to find things by their actions. On Facebook ads are an annoyance."

Exactly this. I don't have any feedback on your post, but I'd like to thank you for writing this. Very insightful.

Re: After Facebook fails

#107

Post by a3d6g2f7 » Thu, May 24, 2012, 9:39 AM UTC

Aramgutang wrote: post #90

a3d6g2f7 wrote: post #54

Earlier quoted context omitted.

Imagine an apartment. Google is like the copy of the yellow pages by the telephone. FB is like the photo-album in the closet. People generally do not open these two books for similar reasons. They have very different usage. One is recreational, the other is not[1]. But FB believers do not want to accept this difference. And it's this difference that makes FB a dud compared to Google. The question I have is what is go…

While I agree with your point, a part of me can't help but wonder about the possibilities that would open up if we had the capacity to extract enough semantic information from a photo: If I'm looking at my old holiday snaps and reliving the good times I had, I might be tempted by an ad for cheap flights to a similar destination. If I'm looking at recent photos of my relatives' adorable children, I might be tempted by…

This is the trap. This is what FB employees keep telling themselves everyday. This has to work. It just makes sense.

You can keep saying the data is valuable. No one is going to question that it is. We all have imaginations. And advertisers will be curious. They will try advertising on FB.

But there's just a big difference in human behavior in the two examples I gave. They are different. Not because I can make argument based on reason for the difference. But because it's what the facts show. There is a long history to this that predates the web. You might say it's been thoroughly tested.

So, you can make all the arguments you want that people should behave a certain way, and maybe you draw on examples of your own behavior or that of others you know, but when it comes down to making money and growing like Google does, it matters more what people actually do in real life. As opposed to how we think they should behave.

Yellow pages and photo-albums are things that have been around for a very long time, long before the web. If people looking at photos (FB) are at the same time looking for products and services, then why didn't photo-albums before the web have heaps of advertising in them? The answer is because there was a different book where it was more appropriate to advertise.

Read the article on the MIT or Harvard blog again. What you are describing, especially a tactic like image analysis, is exactly the type of approach he is saying is just too invasive. This kind of approach to advertising removes anonymity and violates people's privacy when it's counterintuitive to do so, according to the article.

Re: After Facebook fails

#108

Post by fredwilson » Thu, May 24, 2012, 9:49 AM UTC

InclinedPlane wrote: post #68

Unlike some I'm not convinced that facebook will fail. However, I think the risk that they will lose a lot of their userbase and/or they will fail to massively increase per user monetization over the next, say, 10 years is pretty high (maybe 50/50 as a SWAG). The advertising revenue risk is a big one, but there are bigger ones I think. First, we may be nearing the end of an era where monolithic social sites make sens…

you nailed it inclined plane

Re: After Facebook fails

#109

Post by mrvir » Thu, May 24, 2012, 9:57 AM UTC

Aramgutang wrote: post #90

a3d6g2f7 wrote: post #54

Earlier quoted context omitted.

Imagine an apartment. Google is like the copy of the yellow pages by the telephone. FB is like the photo-album in the closet. People generally do not open these two books for similar reasons. They have very different usage. One is recreational, the other is not[1]. But FB believers do not want to accept this difference. And it's this difference that makes FB a dud compared to Google. The question I have is what is go…

While I agree with your point, a part of me can't help but wonder about the possibilities that would open up if we had the capacity to extract enough semantic information from a photo: If I'm looking at my old holiday snaps and reliving the good times I had, I might be tempted by an ad for cheap flights to a similar destination. If I'm looking at recent photos of my relatives' adorable children, I might be tempted by…

Even if they could do all that it is still wild guesswork with too many possibilies. And the effectity of that fantasy also assumes that there is endless supply of advertisers from all different industries. The reality is that if, for example, only some dating sites and hosting companies are willing to pay for ads that match your profile then it is only dating and server hosting ads that you will see.

Re: After Facebook fails

#110

Post by dasil003 » Thu, May 24, 2012, 9:58 AM UTC

joe_the_user wrote: post #57

glesica wrote: post #29

Earlier quoted context omitted.

Keep in mind that all those page views and all that time spent on the site costs Facebook money. It's not like outdoor advertising where the cost is set up front (then amortized over the life of the sign, device or property lease) and the marginal cost for additional viewers is zero. Another thing to keep in mind is that there are competitors constantly targeting Facebook. But not just targeting them on price, target…

Excellent point Also, keep in mind that Facebook has attracted some section of the "best and the brightest". As far as I can tell, they do a really, really good keeping Facebook ahead of the curse; fun and ahead of potential competitors. The thing is that since these people are the best, one might logically expect that they want compensation in some form, possibly only the form of knowing they're working on the leadi…

It's hard to imagine Facebook going the way of Yahoo. Facebook has a relentless focus on their product and continuing to ship and push the envelope. I don't know too much detail of Yahoo history, but it seems like they took their eye of the ball early and started spreading themselves really thin across a ton of disparate products and acquisitions.

I don't see anybody blindsiding Facebook on social the way Yahoo was blindsided by search. The bigger risk seems to be that there is simply no pot of gold at the end of the rainbow to justify a 100B valuation IPO valuation, thus souring everyone on FB and social before we see what the true potential was.