Of course, folks will talk about the relationships and the real-time and the social graph. But that's all data. It's all data yet it's only data, and yet it's the most important part of the puzzle. Control the data, or the access to the data, and you have an advantage - if and only if the data is useful. If someone can create value with the data then you have isolated a new natural resource that you can monetize. It may take some time to figure out how to efficiently monetize it, but it will happen. It always happens - only often it's not the first mover that taps the money well.
Most of the work going on feverishly about Facebook application development is purely to get access to your data. Whoops, I meant [ul]Facebook's[/ul]data! For all the protections they provide for your data (and if you don't know them well I recommend you read this blog entry. ) That will at least protect your data from others, but Facebook can do whatever it wants with your data. It can, and is, cross-referencing it, sifting it, looking for connections and useful things. So far they don't seem to be finding ways to convert this natural resource into money (at least that we can see).
But given that they control the data, they could be poised to be a huge provider of '4th party' services.
What's a 4th party service?
A 4th party service is a means of connecting customers to suitable vendors who can meet their needs. This kind of connection is what was always existed in human commerce, but in the age of mass advertising modern culture lost much of it. We came to have conversations about 'brands' and such - like a brand really matters. Brands mean nothing more than 'reputation.' And reputations amongproducts are earned - you cannot really bamboozle your way into it and expect it to last. Funny, reputations among people work the same way. But back to the 4th party concept. I read a very good blog entry about it that defines it as:
" A fourth party logistics provider is primarily coordinator of
other supply chain partners through the ownership and maintenance
of information systems. This is differentiated from third party
logistics providers that provide physical handling and or
transportation of goods."
The definitive book about this revolution is now almost 10 years old. Here's a link:
If you have not read it, buy it now. Of course, I'd love it if you bought it through my link so it would help defray the costs of operating this blog.
So how does this matter with the data? The data holds the reputation. The APIs to access the data are about accessing the reputation. Who do you trust and what do they trust? You will trust that by association. Once you start down that path you won't care about 'branding' messaging any more - unless that brand is one that has built trust through your own trust network!
There are folks who envision a future where the data is not centralized in only a few companies. They say:
" Tomorrow, as everything becomes social, you will be able
to shop Amazon directly from within your iGoogle page without
ever having to visit the site. What's more, Amazon will
show you what your Gmail address book friends have publicly
said about a product and/or its category in any one of
thousands of online communities. Finally, to help you
further Amazon will offer an aggregated view of your
friends' friends opinions in a way that protects their
identity."
That's a great vision. But it will be awhile before we all can own and share our own data as we choose. Today there's data in Facebook that's as valuable as oil sitting under a Middle-East desert. Tapping that well is there for the taking. If they think in the old way and focus on traditional advertising they will miss the boat. That's the past, and I'm of the opinion that the age of advertising is seriously in decline (though most ad folks don't know it yet). However, if Facebook can grasp the revolution happening in the way customers seek data - and try to connect with reputation - then they will have that billion barrel well they can tap for near-endless money. But, and this is the important part: do they have the vision to grasp this? Or will they fall into the trap of the past and just sell demographic targeted advertising?
And perhaps the more important question: who's in a garage startup right now working on the technology for the customer driven real time web - and when do they launch? And who will recognize it?
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