The Digital Lookout

Neilsen/Netrankings has released some figures which show a monthly decline in Facebook users for the first time since its launch, before it has even managed to fully leverage its traffic volumes into advertising sales.  Its unique audience dropped 5% from December to January prompting many people predicting the demise and claiming Facebook is a fad which will go away as quickly as it arrived.  Have people really already become Facebored?  Or is it simply inevitable that sooner or later there would be a dip in audience as the users who created an account “just to see what all the fuss is about” disappear back to their own world grumbling that it was a load of rubbish anyway?

Mark Ritson, in his article for Marketing, blames the decline on Facebook’s open door policy.  Since September 2006 Facebook has allowed anybody with a valid email address access to their network which was previously exclusive to US students (and before that just Harvard students).  This is where the influx began and over the last 18 months its user base has just grown and grown, until now!  Ritson uses the analogy of being in a hyper trendy bar with his friend, surrounded by beautiful people, drinking beautiful cocktails, listening to great music, before realising the only thing which spoilt the bar, was them!  Two middle aged blokes with expanding waistlines stood out like a sore thumb and somehow made the place less cool.  By opening its doors to anybody in the world, he argues, Facebook has made itself less cool and exclusive, and the seriously cool people, aren’t going to want to be sent a friend request from their mum or an old school teacher!  They want to hang out in a cool environment which similarly cool people, doing cool things and just generally being cool.

So has Facebook’s open door policy caused this dip and is it to be the demise of the worlds largest social networking site?  I don’t know, but I can say that my usage habits have changed slightly since I added my mum and dad as friends!  I am now a lot more careful about what I post and where I post it, although that doesn’t really change the experience too much.  Personally I would blame the 5% drop on the part time users departing, there had to be a dip at some point and I’m sure that’s how the guys at Facebook will see it. 

What it does say to me is that Facebook need to get their act in gear and make this thing profitable, they have an advertising model in place now should start to reap the rewards but it is still not the finished article.  I feel for them in that they are trying to be innovative and make their ads as unintrusive a possible and this is difficult to do but they must find a way.  They have already been chastised for their beacon system and they probably cant afford another mistake like that.  I just hope for their sake, that they don’t rue missing out on a  slice of their $15 Billion valuation which could start to decline a lot faster than their user base if next months figures aren’t more positive.

As the saying goes, the early bird catches the worm, and after last nights earthquake in lincolnshire the most search for keywords today are bound to be related to this event.  So I thought I’d have a look to see if anybody was on the ball and had already added the keywords to their PPC account.  A few searches later and it would appear most of the advertisers in the UK were still asleep or in shock from the quake as not many of them had woken up to the opportunity in front of them.  From all the searches I completed across various engines only one adveriser had specifically chosen to advertise based on the quake and they are a bean bag company! Brownie points for them or their agency but I cant really see how they are going to get any business out of it.  The people who should be on these terms are the news networks and papers, although you could argue their natural rankings should support them, the cost of clicks on these terms would be negligable, 1p-5p depending on the advertiser, and if you compare this to the fees they charge advertisers they would be quids in.  I wonder if anybody will wake up over the course of the day?

I have just come across the Yahoo! Buzzapplication which is currently in beta testing.  From what I can see this is very much like Digg and Sphinn in that users provide articles of interest which are then voted on by the users to push them up the listings. 

Stories are given a “buzz score” which is ”derived from search term popularity, the number of times a story is emailed from Buzz, and the number of votes a story receives.”  Which could add a slight element of mystery if it is more than simply a case of adding the sum of all these parts together.  If it is going to work much like the quality score system in PPC then it may change the game a little and avoid all the spamming which takes place in Digg.  There will apparently be a manual editorial team in place to prevent spamming from taking place but how many and how effective they will be remains to be seen.

The other major twist in the tale is the statement from the site “stories with the highest Buzz Scores may be published on the Yahoo! home page.”  this would make the reach of top performing articles massive and the potential of this new application greater than that of Digg and Sphinn as it goes beyond the user base of the programme itself.  Apparently the same editorial team which will monitor the spam will also be responsible for deciding which stories are worthy of the Yahoo homepage exposure.  It will be interested to see what prominence these articles are given as they are free content and so Yahoo! would potentially be losing out on revenue if they replaced any of the paid placements.

It will be interesting to see how this progresses and whether the exposure on the Yahoo! homepage can make it a bigger property than the more established players in social bookmarking.

I came across a site today which I found interesting. Firstly if you are an i-phone user it is very interesting, offering all new plug ins and applications for you i-phone from wallpapers, games, icons and general accessories for the latest must have gadget from Apple. The site offers a whole heap of options for the i-phone user and makes the customisation of your i-phone simple and easy to do as the sites includes instructions of how to install the applications and plug-ins it provides.

But secondly it got me thinking about how the development of technologies such as these create new opportunities for sharp entrepreneurs in a niche market. For those quick enough to set themselves up as the “go to” provider for the latest gadget or gizmo there can be a very lucrative path ahead. What this requires however is to be one step ahead of the rest of the marketplace and get a foothold before the competition. Take the site in question planet-iphones.com, 12 months ago they wouldn’t have had a business. The i-phone wasn’t released and even if you knew it was going to be it would be impossible to develop i-phone applications or iphone mods unless you had insider information on how the platform was going to be built. Now, 8 months on from the launch you have sites such as planet-iphones offering a full spectrum of products for the handset. In this case the early bird certainly does catch the worm and those that can react quickly enough to new phenomenon can reap the rewards.A search on Google for iphone wallpapersreveals a lot of sites who are attempting to do just this, and establish themselves in this market, but on research none are quite as extensive as planet-iphones. So my advice? If you are an owner of an iphone, and are looking for an iphone wallpaper, pay them a visit and modify to you hearts content! If you are an entrepreneur, get thinking about what could be the next big niche to exploit and it could just pay dividends.

It looks like Microsoft might be refusing to take no for an answer in their bid to buy out Yahoo! in a bid worth $40Bn.  After having their bid rejecting because the Yahoo! board believed it significantly undervalued their brand and investment in technology Microsoft are rumoured to be responding by attempting to ignite a proxy fight to take over the company.  Such a proxy fight would see Microsoft nominate a group of directors sympathetic to a deal for shareholders to vote on at Yahoo’s annual meeting.   According to Morningstar this is Microsoft using the carrot and the stick approach, just both at the same time! The carrot of the share price, 62% above trading price, and the stick which comes in the form of the threat of a proxy battle.  The drama continues and maybe Microsoft will get their way after all!