Chris Anderson at Wired Magazine led another lively discussion about the future of the web. On TV, Meg Whitman says she created 15,000 jobs at eBay, enabled lots of entrepreneurs, and now wants to become the Governor of California. Thousands of blogs write daily about the future of the web.

What is the factual state of the web economy?

We collected first-hand research to estimate the state of the web economy. While some may blog about the bad economy and the new web – our data concludes that it’s already alive; supporting some 600,000 entrepreneurs; and growing despite the recession.

Long Tail of Entrepreneurs

The 80-20 rule states that 80% of the rewards are earned by the top 20%. Lemming analysts would even argue for 90-10 or 99-1. I’ve personally wondered whether any of these analysts truly know the economic power of the 80%, 90%, or 99% in the long tail that thrives on today’s web.

Who are these entrepreneurs?

• Most are statistically labeled as unemployed or moonlighting.
• Huge numbers have blogs (millions), apps (hundreds of thousands), websites, and social pages (tens of millions.)
• Many have storefronts at eBay, Yahoo, Amazon, Apple…
• In short, entrepreneurs explore any and all sources to dig for revenues.
• Most offer consulting to support their web explorations.

Sourcing the Data

With no public reporting sources, we chose to mine the financial reports of public companies to estimate the size of this web economy. I ferreted out the advertising, app, and commerce revenues that represent the gross margins paid to the long tail.

Here’s what’s included:

• 100% of the payments from Google to the long tail of AdSense affiliates – while excluding distribution fees that are paid to the larger affiliates like AOL and Myspace. Google does not itemize Checkout transactions or the Android Marketplace payments in their SEC reports, which would represent additional payments collected on behalf of the long tail.
• An estimated 50% of the affiliate revenues from Yahoo that are paid to partners – large and small. Yahoo does not report payments from Yahoo retail.
• 70% of the Music (ie itunes) and Software (ie appstore) revenues reported by Apple. Although this includes revenues for Apple’s own products and software; and thus, overstates what is paid to the long tail – this estimate does partially compensate the many independent appstores that don’t publicly report their payments.
• eBay reports GMV (gross merchandise value) and Paypal transaction volume. These numbers tend to overlap when Paypal is used to clear the GMV purchases at eBay. Since most of the GMV and Paypal transctions involve high cost of goods, we chose a rough 10% for each revenue stream to estimate the value-added by the entrepreneur; thus estimating an average 20% gross margins for goods sold on eBay using Paypal.
• Amazon increasingly depends on third-party products where Amazon earns referral, listing, and shipping fees. Amazon charges higher referral fees for media products and lower fees for tangible products. We’ve estimated the gross margins earned by the long tail through Amazon for each of these product groups.
• Microsoft pays substantial Traffic Acquisition Costs (TAC); and royalties to game publishers, but does not itemize these payments in SEC reports; and has reorganized so often that its impossible to estimate the payments. Since most of the payments reward larger companies like Yahoo and EA, it does not benefit the long tail. Thus, the omission of this data in the chart above does not significantly bias the results of this research.

What’s missing from the earnings of the web economy includes:

• Consulting earned by prominent bloggers, app developers, SEO consultants, and social entrepreneurs.
• Payments by the hundreds of advertising networks that are still private – including those that pay Zygna and other game developers. This also should include revenues received by Federated Media that is paid to their blog network; and Techcrunch’s revenues from their events, advertising, and other creative sources, but there is no way to estimate these sources.
• Online games that don’t use Paypal for monetization.
• Earnings from other app networks, that is partially covered with our over estimation of Apple payments.
• Craig’s list transactions.

Am I missing significant other sources? Can you think of other factors to fully estimate the value of the web economy?

Surprising Conclusions

Here are my conclusions:

• Earnings easily exceed $10 billion a quarter. Since this estimate represents gross margins available to pay salaries and rent, the web economy is roughly three times the size of Google.
• Revenues are seasonal, reflecting the sources that includes eBay, Amazon, and Apple.
• This earning stream can sustain over 600,000 paid jobs; probably from multiple millions of participants where hundreds of thousands have already gained self sustaining status.
• We guess that most of this stream is paid to North American entrepreneurs. Asian and European entrepreneurs have their own store fronts that are not included in this study.
• About half of this stream is exported outside of North America; with the payments repatriated to North American entrepreneurs.
• In two years, Apple has become a significant payer to the long tail; and could pass eBay, Amazon, and Google in 2011.

Is the issue really about choosing among advertising revenues, commerce, or content subscriptions? Savvy entrepreneurs know to chase a little from all the above.

Why is Obama struggling with creating jobs? Perhaps Meg Whitman really knows the answer. It does not matter whether our leaders are Democrats or Republicans. What matters is that they need to be aware of and understand the growth engine that is already part of this slow economy.

Maintaining the Web Economy Index

These six companies (and dozens of new enterprises like Facebook, Motorola, HP, Cisco, …) who seek to build app stores, must take their vision of supporting the long tail seriously. After all, entrepreneurs depend on them to make a viable living.

Conversely, the long tail needs to speak with stronger voices when web leaders make choices that adversely influences the long tail.

Do you agree?

To keep up with this quarterly report, subscribe below.

By Alistair Fairweather

Measuring a brand’s value is an inherently tricky business. Even in a supposedly clearcut case like Coca-Cola, which is essentially commoditised sugar water dressed up in world class marketing, the actual value of the brand is difficult to separate from the product (or service) itself.

Yes, crowds of fans spontaneously sang the Coke song during the World Cup, but how much is that sort of thing actually worth to a brand? Do the people who talk about your brand actually buy it? What about recommending it to their friends?

A fascinating new study by Vivaldi Partners – a marketing consultancy – attempts to answer that question by borrowing an idea from sociology: social currency. It defines social currency as “the extent to which people share the brand or information about the brand as part of their everyday social lives at work or at home.”

A definition like that is bound to make us social media evangelists prick up our ears. We’re all well aware of the power of conversation, and I always welcome new ways to quantify its true value. But the study has a far broader outlook than social media, and deals with far more meaningful interactions than the buzz that often passes for conversation on social media.

So where does this social currency come from and how is it measured? Vivaldi has defined six social “levers” that determine a brands social currency score:

1. Affiliation
Do your customers feel like a community? For example the study shows that while low cost airline jetBlue may be smaller and younger than stalwarts like American Airlines and Delta, they have successfully nurtured a sense of community in their frequent fliers.

2. Identity
Do your customers see your brand as part of the way to express their personalities? For instance the study shows that luxury car brands like BMW and Mercedes have the most social currency, partly as a result of high identity scores.

3. Information
Do your customers exchange useful information with each other about (and around) your brand? The study found that most Oracle customers not only feel like a community, but that they get vital information from other members of that community.

4. Conversation
Do your customers talk about your brand? The study shows that while Clinique’s customers are very likely to discuss the brand, this is much less true of brands like Axe and Dove. Why? Because Clinique’s emphasis on different products for different skin types spurs women to form micro-communities around the product lines.

5. Utility
Do your customers get any kind of value by interacting with other customers? Customers of both iTunes and Oracle get a lot of utility out of talking to their fellow customers. Oracle, in particular, organises customer events to encourage more of this kind of interaction.

6. Advocacy
Do your customers recommend and defend your brand to non-customers? The obvious example here is Apple, and the study aligns perfectly with that anecdotal truth. As a result Apple has one of the highest social currency scores in the study.

When you combine these factors, you have a powerful way to measure the quality of social interactions around a brand. It’s about a lot more than mere buzz. For instance the study shows that while Burger King generates a lot of buzz, their social currency is relatively low. Wendy’s, on the other hand, stimulates genuine conversations around its food, and earns higher scores as a result.

Social currency isn’t a prerequisite for success, nor is pursing it a good idea for some brands. The study shows that Gillette has extremely high scores for loyalty and trust, yet it has the lowest social currency score in the study. People love their razors, they just don’t feel the need to discuss them. And, given that such discussions may lead to comparisons with cheaper alternatives, they may actually prove harmful to the brand.

If that’s the case, what’s the point?

The study also shows that high social currency scores correlate strongly to both higher loyalty and significant price premiums. Two great examples of this in the study are premium beers like Guinness and – of course – Apple’s products.

Even if social currency isn’t the most vital metric for your particular brand, a thorough understanding of the six social levers will definitely enrich any strategy. At the very least you now have a new buzz word with which to pacify the bean counters.

(The following is a press release for a great service that clearly falls in several of the categories that we are watching closely: The Last Mile of Social Media, Organizing communities in social media, and alternate currencies of exchange in social capitalism. We encourage you to join Neighborgoods and send us feedback.)

Los Angeles, Calif., June 30, 2010 – *Los Angeles based startup, NeighborGoods.net announced its national launch today. Previously only available in Southern California, NeighborGoods opened its community to people across the country so that all Americans can save money and resources by borrowing and lending with their neighbors instead of buying new.

The nationwide launch comes on the heels of the global economic crisis when Americans are increasingly calling for an overhaul of the financial system. Meanwhile, cash-strapped Americans spend $22 billion a year on self-storage. According to The Self Storage Association, there is over seven square feet of self-storage for every man, woman and child in America. NeighborGoods was created to extract the latent value hidden in all that stuff. By connecting neighbors to get more use of the stuff they already own, NeighborGoods provides a way for communities to save money and live more efficiently.

The idea for NeighborGoods began to take shape a couple of years ago, when NeighborGoods founder Micki Krimmel purchased a travel pack for a trip to Thailand for about $200, knowing that she would only use the item once or twice. She took inventory of all the stuff she owned and realized the same was true for most of it – she spent a bunch of money to own something she only needed occasionally. After a bit of research, Krimmel learned she wasn’t alone. People across the country are over-laden with stuff they’ve purchased but don’t use very often.

Krimmel put a small team together and launched a test version of NeighborGoods a few months ago. Since then, members have added over $750,000 worth of inventory to the network and NeighborGoods has received a great deal of attention from the press. Krimmel and NeighborGoods have been featured in O Magazine, TechCrunch, GigaOm, Apartment Therapy, and countless other blogs and websites. Krimmel has been most inspired by the feedback from users and potential users. She says, “The most common request we get is ‘Bring NeighborGoods to my town!’” In response to widespread demand, and following their successful test in Los Angeles, NeighborGoods launched nationally today with a bold mission of improving neighborhoods across the country.   “When we share our stuff, we get so much more for our money, we reduce waste, and we strengthen our local communities,” said Krimmel. “Not only does NeighborGoods provide a way to save a little bit of money – it also connects neighbors in meaningful ways making for happier, healthier neighborhoods.”

*About NeighborGoods*

NeighborGoods.net offers a unique service by building upon the success of sites like Craiglist and Freecycle. Inspired by their ability to encourage re-use and keep waste out of landfills, NeighborGoods goes one step further to help people get more value out of stuff they actually want to keep. Members can safely borrow a lawnmower, lend a bicycle, or earn some extra money by renting a DVD collection. NeighborGoods is like Craigslist for borrowing. NeighborGoods provides all the tools to share safely and confidently including transparent user ratings and transaction histories, privacy controls, deposits, and automated calendars and reminders to ensure the safe return of loaned items.   Contact Information:  Website URL: *www.NeighborGoods.net* <http://www.NeighborGoods.net>  More about NeighborGoods: *http://neighborgoods.net/faq*<http://neighborgoods.net/faq>

Location Based Services (LBS) are becoming all the rage now. Start up companies like Foursquare which is a web based check in service where you can declare your location to your friends, and even popular sites like Twitter and Facebook are getting into the act and attaching location based information about your status updates.

Clearly people are becoming more comfortable and seeing reasons to allow location based information to be used. But what does this mean to your company?

I believe every single company will need to understand the power of location. And marketing need to get used to thinking location + business can equal big money.

Let’s take the combination of Twitter and location as an example. Comcast provides customer care through its Twitter account “comcastcares”. They use their twitter account to provide customer support if their cable, internet or phone service is out. And it’s become a critical piece of their support organization getting 5,000 – 8,000 tweets per week. They have a team headed by Frank Eliason, the man behind the comcastcares twitter handle with 10 people level 2 and level 3 support people working with him.

Now that Avaya has developed our Social Media Manager solution (get our new book on this) to help folks like Frank to automate what he and his team currently does which is reading tweets and other social data to find support related items. So they can begin to focus elsewhere.

Now that we have all the data about these support related tweets in our system – what if we map where complaints are coming from? Then we can easily visualize using some form of a mashup – where the company should invest in improving its infrastructure and hence their reputation.

This is really a natural extension of the next generation contact center that uses social media to provide superior customer service. We have learned a lot about how social will impact the contact center over the past few years. And I can promise you this is only just the beginning of the age of Social Customer Service.

by Mary Adams:

Although intangibles are more and more important, few companies can provide a description of their own knowledge factory. Nor can they provide an inventory of its critical components. How much it cost to build, maintain, and operate the factory. How well it is performing. The knowledge factory is essentially invisible in most companies.

Experts estimate that easily half, probably much more, of the value of American companies is held in this knowledge factory. This factory has been built through steady investments that were at least equal to the investments made in tangible production capacity in recent decades—and probably much greater.

The future of your company and our country will depend on our ability to leverage this investment. But neither the investment nor the value of this knowledge factory is captured in the accounting and management information systems that are used across our economy.

And the exclusion of intangibles also means that the operating story that accounting has traditionally told—as raw material moves through the production process and becomes finished goods—is also missing. Today’s accounting shows very little balance sheet movement and a lot of different kinds of expenses, both tangible and intangible, but no coherent story about the value creation process.

All this means that managers, boards of directors, investors, partners and stakeholders of all kinds have to rely on their intuition to evaluate the creation, strength and monetization of intangibles. They ask questions, they get a gut feel for how things work. But they do not get hard data that gives them a complete picture of the current and future productive knowledge capacity of our companies.

This is the dangerous secret of our economy:

We have all kinds of regulations about corporate disclosure. We have all kinds of management practices vetted by business schools. We profess to value hard data. But no company today can provide a basic set of management information on its knowledge assets and the means by which these assets are put to work to create customer value.

There is an enormous intangibles information gap and no one will admit that they are managing basically based on their intuition.

Micki Krimmel, CEO; NeighborGoods

When I moved to LA out of college (many years ago), I would always pick up a magazine called The Recycler. The Recycler was a used-stuff magazine localized by proximity in a vast and complicated City of Los Angeles. I bought my motorcycle, skies, concert tickets, furniture, and tools – all at incredible savings.

After a while, I began to notice that most of my friends – the people who I rode with, skied with, went to concerts with, and shared hobbies with – were in some indirect way connected through The Recycler. I soon began to strategically use The Recycler to buy, sell and trade stuff for the sole purpose of meeting interesting people. I was finding parties, events, and communities that I would never have been exposed to otherwise. When the Aerospace industry crashed, I turned to my community for employment. It flat out worked and I experienced a remarkable transition into … etc.

Good Neighborhoods start with good interaction

My new favorite social networking concept is from Micki Krimmel, CEO of NeighborGoods, LLC. I had the pleasure of meeting Micki at the Future of Money and Technology Summit in San Francisco. NeighborGoods is a brilliantly simple concept where people in a neighborhood can list items that they are willing to lend or rent to others. This application is scaled to a highly localized community in our social landscape otherwise scaled to the automobile, commercial centers, and the Global Internet itself.

The Social Media Imperative

It has long been my contention of Social Media that nothing happens until the rubber meets the road; where people get together to actually produce something. In fact, the ‘corporation’ is an example of a hyper-local environment. It is also my prediction that as financial constraints sever the ties of traditional corporate structures, many of the functions of corporations and government are shifting to social media.

For this reason, applications such as NeighbborGoods will serve – no, they must serve – a greater role in unifying communities. I know this sounds really clinical, but Micki’s work is supported by urban theory luminaries such as Jane Jacobs, Richard Florida, and Robert Putnam.

NeighborGoods from sparky rose on Vimeo.

GNP: Gross Neighborhood Product

The problem is that outside the construct of a corporation, there is no accounting system for the social value that strong neighborhoods produce. There is no measure in America’s gross domestic product for the value generated by unified communities. There is no line item on the balance sheet of industrial and corporate concerns for active, diverse, and well-balanced communities.

Yet, tangential evidence abounds.

There are plenty of data that suggest that vibrant and unified communities attract active and productive people. Companies locate jobs to productive communities. Home prices are more stable in these communities. Crime and delinquency is reduced. Silicon Valley itself is cited as a perfect mixture of social capital, creative capital, and intellectual capital in it’s communities. The best way to decrease the size of government, create jobs and create wealth is to unify neighborhoods.

Use it or lose it

While the dollar-denominated monetization of NeighborGoods may appear modest, however, the true social value that NeighborGoods brings into a community is off the charts.

Every municipality, chamber of commerce, economic development agency or anyone claiming to politically liberate or conserve anything in America should be looking at solutions designed and developed by visionary social entrepreneurs and community leaders like Micki Krimmel and NeighborGoods.

]]> http://www.conversationalcurrency.com/8822/neighborgoods-good-neighborhoods/feed/ 1 http://www.conversationalcurrency.com/8708/browser-wars-wrong-data/ http://www.conversationalcurrency.com/8708/browser-wars-wrong-data/#comments Wed, 12 May 2010 06:00:58 +0000 Editor tag:feeds.feedburner.com://5754e99840e774f11bed033c201a6ca3

(Editor: The following analysis demonstrates the need for internet vetting, a market is only as efficient as the vetting mechanism.  In the old days this was called truth in advertising.  The Internet takes this to a whole new level.  This is only a minor, insignificant demonstration of what is likely systemic manipulation of alternate truths.  However, lack of data is not an excuse for serving up wrong data as fact.  The true value of “conversational currency” is dependent on true value of information. Bravo to the author)

Here is the typical miss-statement of the browser-war status.

IE8, Chrome have most momentum in browser wars

Data source: Net Applications

Chrome is on a roll. It’s the fastest-growing browser in terms of market share we’ve seen in a long time. And its rapid growth corresponds with Internet Explorer’s steady decline. Keeping that in mind though, data from last month shows that IE8 has managed to grab 25 percent of the browser market, beating all versions of Firefox to the punch. In January 2010, only Chrome and Safari showed positive growth.

Between December and January, Internet Explorer dropped a significant 0.51 percentage points (from 62.69 percent to 62.18 percent) and Firefox slipped 0.20 percentage points (from 24.61 percent to 24.41 percent). Chrome jumped a sizeable 0.57 percentage points (from 4.63 percent to 5.20 percent) while Safari moved up 0.05 percentage points (from 4.46 percent to 4.51 percent). Opera, on the other hand, dipped 0.02 percentage points (from 2.40 percent to 2.38 percent), though we’re still hoping version 10.5 will turn things around for the little guy.

Why is this picture wrong?

• iTunes is a browser, used by 70% of the MP3 device owners. The browser stats don’t track iTunes use.
• Mobile devices already account for over 30% of web use. The iPhone is the top device, but it does not allow background tasks and third-party tools to track the use.
• Top means to access social networks is via mobile apps.
• Google Analytics fails to track data for Palm or iPhone app access.

If this data were trackable, has Explorer already lost the lead as the top browser to Safari? Is Chrome even a credible trend that would justify this headline?

The right headline, if anyone can see the entire web, is probably:

Safari Leads Among Browsers

FYI.

(ed;  vetting mechanisms make markets efficient.  In the “Market” for social currency, social vetting will have a wide ranging impact)

By Urban Logic

Growing the Social Capital Ecosphere

New options are emerging every day for people to put their money to social purpose. Headlines raise shrill cries to reconsider nearly every aspect of how people act. Climate change, catastrophic floods, green energy, terrorist bombings, regional wars, decaying city infrastructure and neighborhoods, social inequity, impure food, unethical manufacturing of clothing, pandemic risks and other causes challenge our beliefs in traditional institutions as the sole ways of using money and transacting across global markets.

In interpersonal lending, Kiva®, Prosper®, Virgin Money® and similar Web services bypass traditional banks and foundations to enable microfinance at direct peer-to-peer levels, where people of means lend or donate to people and enterprises without.

The Internet is changing how consumers shop, how borrowers borrow, how investors invest, how donors give.

We see social capital in the rapid rise of social networking and affinity services. We have begun seeing its impact on how individuals invest, lend and gift for socially. Socially-impactful consumption is on the horizon. Socially-purposeful commerce is increasingly the way that consumers expect manufacturers and retailers to market their products and services. While the expectation for transparently gauging product ethical, environmental and social purity may be in consumers’ minds, the way that each product, industry and seller are going about providing such transparency is chaotic, and lacks standardization essential to efficient markets.

That’s where the SC-Eco: Social Capital Ecosphere comes in. As a holistic approach to transparency, SC-Eco transactions have origins and impacts verifiable as “sustainable.”

The SC-Eco would self-organize as a set of interdependent neighborhoods, virtually connected via the Web. Each neighborhood lets neighborhoods and visitors alike trace back the environmental, energy and social impacts of choices made.

The Mall Services Neighborhood is where via the Web socially-responsible go to find companies, knowing that companies there have agreed to provide standardized access to a broad range of transparency information.

The Ratings Neighborhood would be made up of the experts and ratings agencies that today offer a cacophony of 160,000 ratings of “green,” “organic,” “energy efficiency,” “fair trade/labor” or other lifecycle characteristic. Ratings services within this Neighborhood would enable access to their knowledge via a more standardized Wikipedia®-type of interoperable interface, such that the ratings can be more readily compared, combined and tagged to see the impact of a particular product, service or company on the region.

The Manufacturing Neighborhood would be a place that product manufacturers and their suppliers can use to coordinate and publicize details of the steps being taken to make their manufacturing processes more Earth-, community- and labor-friendly. Today, companies often are frustrated investing in energy efficient plants and environmental clean up only in response to negative headlines and litigation. Participation in the Manufacturing Neighborhood would broaden the options manufacturers and component suppliers have reach consumers and assemblers with the message that their products are socially-responsible, their corporate governance is open and accountable and their impacts on the Earth are friendly.

In the Finance Neighborhood, banks, insurers and other financial services providers would offer specialized programs tailored to the SC-Eco consumer and business. Evidence suggest that enterprises managed to generate social and monetary returns, are more reliable as borrowers (i.e., entail lower loan default risks) and as insureds (i.e., have less severe business interruption, property damage and health insurance claims). By aggregating demand, this Neighborhood will help match such companies and financial organizations offering better terms for doing good.

The Agriculture Neighborhood is tailored to the unique challenge of wholesome food. Organic farming, sustainable farming, organic kosher, fair trade indigenous food production, locally-grown, freshwater clean fish and many other designations describe food grown, harvested, processed, packed, shipped, and disposed of consistent with two aims: to be more nutritious when eaten for body and soul. Today, food labeling requires supplementing “Nutrition Facts” with “Production Facts.” Sorting out the food supply chain across growers, handlers, markets and restaurants will be enabled when they perceive a set of consumers opting to eat more heathfully and ethically.

The Public Health Neighborhood would align hospital, physician, natural medicine, preventive care, nutrition and lifestyle counseling, insurance and other features into a set of services that amplify choices consumers make to improve not just their own health but that of their region.

The Land, Buildings and Infrastructure Neighborhood would serve the needs of developers, architects, engineers, homeowners and others seeking to encourage use and repurposing of land in ways that augment the SC-Eco’s other functions.

The Philanthropy and Social Venture Neighborhood includes social venture philanthropists, traditional foundations, program-related investment initiatives of pension fund and foundations, corporate social responsibility outreach efforts and other capital sources that would like to invest in socially-purposeful enterprises and nonprofits but have lacked proof of their “business model.”

The SC-Eco inherently writes whole chapters of the business plans for social ventures, by showing demand for services, customers and strategic alliances.

Photo source

One of the biggest challenges for organizations today is managing the flow of information about their brands, products, and services that occurs in social media channels, including microblogs (such as Twitter), social networking sites (such as Facebook), blogs, and online forums.

More than ever, consumers use social media to spread the word about the brands they like and perhaps more importantly, don’t like. With the introduction of each new media channel, the landscape changes, often dramatically, and organizations need to adjust quickly to stay ahead of the curve. To help achieve that goal, organizations now adopt formal processes that structure how their contact centers organize, distribute, and analyze the information they collect from many channels.

Avaya is the industry leader in worldwide business communication systems and market share leader in contact centers. We felt it was important for us to provide you with the tools you need to structure your contact center’s process and effectively collect, organize, and distribute social media information within your organization. The result being faster turnaround on customer complaints, and increased responsiveness to customer needs.

So I embarked on creating my 2nd book which is now available called Social Media and the Contact Center for Dummies, to help you to grasp the opportunities and challenges of working within the new social media market landscape. This book describes the commercial tools, as well as some free ones, that organizations use to manage the massive stream of information they collect from the various social media channels.

If you would like a free copy of the book please fill out this form and we will send you one so you too can discover the possibilities that social media can provide to create an outstanding adjunct to your existing customer service efforts!

Today was extremely important for the Internet. Facebook announced that its “Like” button is going to appear on publisher sites all over the Internet. These buttons will populate a user’s profile in Facebook linking back to the originating site while also providing Facebook with even more immensely valuable, realtime data about its consumers. Here’s an Ad Age story covering the announcement (which includes my perspective) and below is my deeper analysis of the announcement and what it means for marketers, publishers and agencies

What are the implications of the Facebook announcements?

First and foremost this means that Facebook will gather a lot more information about its users. There’s nothing wrong with that as long as the privacy settings on Facebook are made more usable. And more than that, Facebook users need to be educated on the new privacy implications. This is something that Facebook can and should do for its user base and hopefully will.

Secondly, this means that the publishers will have a lot more information about Facebook users too. The 24 hours limit on holding Facebook data will be lifted. Publishers will now know a lot more about users (basically all their profile information) as soon as the click the “Like” button and they’ll be able to hold onto this data. Just imagine the CRM implications when a publisher is able to marry FB user data with its own customer databases.

Thirdly, it means that publisher websites will get personalized based on a user’s profile data in Facebook. There’s nothing wrong with personalization and practically every major website (certainly the newspaper sites) include some form of personalization. The Huffington Post already personalizes content based on what stories people in your Facebook social graph have read. Expect to see a lot more of this as it gets easier for other publishers to role out similar functionality and use profile data to personalize experiences. Just think about the possibilities in retail for example.

Fourth, these announcements definitely hint towards Facebook launching some kind of ad network to overlay the like button. This announcement basically allows for another form of behavioral targeting and I’d be surprised if Facebook chose not to do something further in this realm in the coming months. The question is whether they’ll launch an ad network to support the social graph distribution or just sell the data to advertising networks or exchanges. In the short term, Facebook is going to allow publishers to further target ads on their own sites with this data.

Fifth and most importantly this also means that what we do on the Internet (in terms of “liking” websites) and what is in our Facebook profile is going to heavily influence what the rest of our web experience is. The Internet is going to become much more of a personalized experience for us. That can be a good and a bad thing. Good in that we provided tailored content that we really care about and is driven by choices that we’ve made in the past. Bad in the sense that the content may reflect spontaneous off the cuff actions (just because I “like” a website doesn’t mean I really like it) or more directly what we put in our Facebook profiles and forget to update. It’ll make the web more local and less exploratory.

Do you agree with the analysis? Do you think it is as big a deal as I make it out to be?

Please feel free to comment here

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