THIS WEEK IN FACEBOOK

Facebook Dominates Social Networking Landscape, Surpasses 250mm Mobile Users

Facebook’s dominance of social networking is on full display in the below chart recently released by Pingdom which shows every social network with over 1 MM daily visitors.

 

We expect Facebook’s membership to continue to grow, particularly in the less saturated demographics (55+) and in countries with lower penetration.  But we also believe that there are massive opportunities for other networks that either offer a unique communications platform (e.g. Twitter), or meet vertical needs (e.g. LinkedIn for work, Badoo for dating).

 

Also this week, Facebook had several major mobile announcements.  The announcement that got the most press was the revelation that Facebook had surpassed 250 million mobile users.

 

The second, and more meaningful, was the rollout of a major upgrade to its mobile platform (m.facebook.com).

 

On March 31st, Facebook announced:

 

“Today we’re excited to start rolling out a major upgrade to m.facebook.com that delivers the best possible mobile Web experience no matter what device you’re using. Previously, we solved this problem by building multiple versions of mobile Facebook: m.facebook.com for less feature-rich mobile devices and touch.facebook.com for touch devices.

There are two major problems with this approach:

  1. 1. We were limited by the lowest common denominator for each site. We couldn’t use JavaScript and had device specific file size limitations on m.facebook.com. Supporting a wide array of touch phones of varying quality on touch.facebook.com limited our ability to use modern CSS and JavaScript APIs.
  2. 2. Every time we launched a new feature, we had to build it multiple times across different code bases: once for facebook.com, then again for m.facebook.com, touch.facebook.com, and in native applications as well. Honestly, we weren’t very good at doing this, so certain features were missing on different devices.

With the new m.facebook.com, users with high-end touch devices will see a rich touch-friendly interface; for users with feature phones, the site will look and work great.”

The bottom line is that the world’s dominant social network has a keen appreciation for the global secular trend to mobile, and is operating its business accordingly.

As a Facebook spokesperson stated: “We think it’s important to provide an excellent mobile Web experience.  Now, whenever we launch new features on the mobile site, they’ll be available on any mobile browser, presented in the best possible experience. We’re excited to roll out the new m.facebook.com site to everyone over the next few weeks.”

Facebook Continues to Build Its Washington Presence

Undoubtedly, one of the major risks to Facebook remains government regulations.  Anytime a company gets as big and powerful as Facebook, the company attracts government scrutiny like moths to a flame.  Facebook clearly recognizes this.  In fact, Facebook’s COO, Sheryl Sandberg, is a former Clinton administration official, and Facebook’s General Counsel (Ted Ullyot) is a former clerk for Supreme Court Justice Antonin Scalia.  So it’s no surprise to see Facebook continuing to take the appropriate measures to make sure that Washington understands and appreciates their perspective, and is best able to place Facebook’s actions in the right context.

 

The latest rumored addition to the Facebook Washington team is Robert Gibbs, the former Communications Director for President Obama.  Gibbs would bring an intimate knowledge of Obama’s agenda as it relates to the regulatory issues facing Facebook, as well as strong relationships within the administration.   Obama is widely perceived to be a fan of Facebook.  One of Facebook’s founders, Chris Hughes, played an important role in Obama’s campaign by heading the Facebook Connect integration.  More recently, Mark Zuckerberg sat next to the President at dinner as part of a group of tech titans that dined with Obama in Silicon Valley.

 

While the fight over talented programmers gets the most press in the Valley, recruiting the right talent in Washington D.C. may prove a similarly important key to Facebook’s future success.

 

THIS WEEK IN OTHER SOCIAL MEDIA NEWS

GOOGLE RELEASES “+1” TO CHALLENGE FACEBOOK’S “LIKE” BUTTON

By Kerry Rice, Wedbush Analyst

 

Google introduced its new search feature, +1, Wednesday afternoon, which integrates recommended information from “friends” in a users search results. To utilize +1, users must have a Google profile, which is also where users will manage their +1 recommendations. The process is that when a user performs a search, the search engine results page will not only include the algorithmic search results Google is so well known for, but also +1 recommendations. The +1 recommendations will come from websites that the user has previously found helpful or from friends, such as contacts or IM chat buddies. We expect Google to also begin incorporating +1’s from Twitter, Flickr, and other social media sites.

 

The proliferation of +1’s should increase the relevance of search results, and could increase search query volumes and key word prices. Initially, search queries will continue to return primarily algorithmic results. However, next to each search result will be a +1 button. If this button is clicked by a user or a user’s friend, the recommended search result will begin to appear in the users or users’ friends search results pages in following similar search queries. Additionally, even if the user or none of the user’s friends have clicked +1 for a particularly search, Google is able to indicate how many other users clicked on the +1 for a particular search result, highlighting that others have found a search result useful. The anticipated result of +1 is that users receive the improved search results because the recommendations come from people who matter to the user, at the right time (when user is actually looking for information about that topic), and in the right format (user’s search results). We believe the more relevant search results driven by +1 could propel search query volumes higher for Google. We also believe that websites users find relevant should have a higher search ranking, which could increased the price of keywords and ultimately drive revenue for Google.

 

Google has not forgotten about ad revenue as we expect +1’s next to ads to also be introduced. Google is expected to initially place +1’s alongside search results and ads in English searches and only on Google.com, but in the weeks ahead +1’s will begin to appear in other Google products and sites across the Internet. The +1’s should not change Google’s quality score, but are likely to be used when determining organic search rankings. Additionally, Google intends to extend the +1 to website owners to make it easier for users to recommend content without leaving the site, similar to Facebook’s “Like” button.

 

We expect the +1 to take time to roll-out as this new feature remains in Google Labs for now.

 

Steps to try +1 on Google:

 

1)       Create a Google Profile

2)       Visit to Google.com/experimental

3)       “Join” the +1 experiment

4)       Search on Google – after a few minutes the +1 icon should appear in the results

 

 

 

 

 

 

 

 

 

 

Trada Conference Call – February 22, 11am EST

Our enthusiasm for Google is predicated on two major pillars

1. It’s early in search – the market thinks its maturing

2. Google get’s social – the market thinks Facebook is social, but social is so much bigger then Facebook.

This morning at 11am EST, we are holding a conference call with former Yahoo honcho Tim Mayer, now Chief Strategy Officer of Trada  Tim will talk about how Trada could, in Wedbush’s forecast, bring more than $1 billion in incremental revenue to Google in a couple years that is not in any analyst model, helping prove pillar 1 above.

As the first social media analyst on the street, we will use an emerging social media tool that we love, SlideShare.net To listen to me and Tim, you can dial 1-800-229-6159 However, to see Tim and his slides, please ALSO go to SlideShare.net and register at least 10 minutes before the call.  Once you are registered, you can go to Slideshare.net/loukerner/meeting, and you’ll be able to see the slides in the presentation and you’ll see video of Tim as he walks thru the slides

This is the first time we are using this technology (SlideShare just launched it in beta last week), so you may need to mute the phone if there’s a time lag.  But Wedbush will continue to push the envelope in our usage of social media.  So buckle your seat belts and join us for tomorrow’s call.  It’ll be a unique experience.

Trada Call PDF Invite is attached

Chart of the Day: Facebook Crushes Google, Yahoo, AOL & MSN

If search is any indication of what people want, they want Facebook more than twice as much as Google and Yahoo according to Google Trends.

I also compared the most popular social media companies to Facebook on Google Trends, to see if perhaps social media properties skew higher than the old Internet titans.  They don’t.

I was curious how Google compared to the old titans, and interesting, Yahoo and Google are neck and neck.

To be fair, these results are based on Google search results, so I’m not quite sure why someone would go to Google to search the keyword term “Google”, but it was fun to pulling the data.

To learn more about how Google Trends are calculated, click here.

Jay Gould maintains a long position in shares of Facebook (private).

Lou Kerner on Bloomberg TV Discussing Facebook

In this clip from Bloomberg TV, Lou Kerner, partner at SecondShares and social media analyst at Wedbush Securities, discusses Facebook’s entry into location based services and whether Google will attempt to compete with Facebook in social networking.

Lou calls Facebook the “Second Internet”, saying “really sitting as a layer on top of the first Internet, but more powerful in many ways than the first Internet because we’re all connected.” In response to whether Google will attempt to compete with Facebook, Lou says “Eric Schmidt has says the world doesn’t need another Facebook, but I do think they’re going to play a big role in social.”