If we look at Facebook’s current situation, it all makes sense. Facebook user growth is slowing down now when they are set to surpass 1B users (an incredible number, by the way!). Facebook is not really a mobile application either. Facebook is thus faced with two problems:

1. How can we continue to grow and,
2. How can we capitalize on the growing mobile user base?

The answer to #1 is actually quite simple: You need to look at growth in layers, each layer representing an application. For example, Instagram is about a new way to take pictures and sharing them. They have tremendous growth. Much (if not all) of the users are already Facebook users. By acquiring Instagram, Facebook is now growing in a new layer inside their existing user base. This provides better coverage which translates into more time spent on Facebook properties. That just means one thing – more revenue.

Question #2 is very interesting. Mobile access to the Internet continues to grow at an increasing pace. Still, Facebook has yet to present a solid mobile strategy. If they have one, they haven’t shared it with anyone. By acquiring Instagram, at least they add a true mobile application to their arsenal.

Look at it from Facebook’s perspective: By giving up merely 1% of the valuation to Instagram, they get instant growth within their community (increased coverage), a stellar mobile application and a great team. Small investment, if you ask me (or Mark Z.).

What should then Facebook really do with mobile? Personally, I think Facebook should develop the “Social Mobile Operating System” and open-source it. They can steal the playbook for how to execute from Google (Android, anyone?). I told this to Facebook a year ago, by the way. I am a little ticked off that they didn’t take my advise…;)

The comparison is very interesting because it shows two things:

1. Google has no other option, they have to make this change.
2. The Internet users at large are already subject to the privacy issues.

In this analysis, we looked at features (or applications if you like) that fell into one of three categories:

• Destination – it is all about the eye-balls and if you can be the destination, you win.
• Sharing – Social is all about sharing with your circle of friends.
• Control – What control and tracking does the feature give to the service provider (i.e., Google/Facebook)?

Here are some of our observations:

With a strong user base (destination), single-sign-on and web presence you have complete visibility into the user’s Internet behavior.

This is why Google is making the move. Facebook is already there. If successful however, Google will surpass Facebook in its ability to track, profile and target the users. This is what the current battle is all about.

So what about us, the users? We are obviously already in a compromising situation. One can argue that the trend benefits us since the service providers can reduce the noise and focus on what matters to us. The privacy concerns remain real and must be addressed though.

I realize that in certain countries you are running a risk of punishment for speaking out but that doesn’t apply in the free World, the World you and I live in.

You have an opinion about something? You want to share it with the World? You expect others to spend time reading it? You should be proud of it and put your name by it. It’s that simple.

There are several players in this space besides Yammer. There is Tibbr (by TIBCO), Salesforce.com and LinkedIn to mention a few. While approaching the application from different angles, they are all adapting their user experience to be more like Facebook and Twitter.

So, why am I not addicted to Yammer? For starters, I really don’t have a lot of time to be social since I am working. I save that for the water cooler. Secondly, I am moderately interested in the updates I am getting from my colleagues. It’s not that I don’t take an interest in what they do. It’s just that it has no impact on my success at completing my tasks.

For these social enterprise tools to be successful, they need to focus on content first, collaboration second and finally, social. To focus on content, the enterprise must be empowered to source it then make it available in a relevant and attractive format. I have yet to see this happen.

• More streamlined or integral to the purchase process.
• More impactful in influencing the providers of products/services.
• Easier to share and therefore keeping people honest.

For online retail, the challenge (and opportunity) lies in how to integrate the product catalog with a separate network of recommendations. This may also be the next battle field as Facebook moves more aggressively into retail. I am assuming they will, but what do I know?

There is an interesting thread on the topic here for those interested in this.

Combining Most Recent and Top News was way overdue and a good move. No one ever understood the algorithm behind Top News and no one likes a seemingly unpredictable experience. The new experience aligns updates in one list, trying to put the most important at the top. While I still don’t fully understand the algorithm, at least I know I have visibility into all updates.

In good tradition, many users are complaining about the most recent upgrade to the user experience. According to CNN, the complaints are massive and loud. I say get over it and get used to it!

• Elastic – computing resources can be spun up and shut down fast and easily.
• Web-based – computing resources can be started and stopped from a web-based portal by the user.
• API-driven – It is possible to manage resources via a web-based API.

There are most likely other differing aspects as well.

The cloud trend is driven by the desire to reduce operational cost and this is also what the industry touts as the primary reason for moving to a cloud. There are other trends driving the need for cloud as well. If you look at the number of companies, large and small, that run on Amazon EC2 or Rackspace, you realize what a huge enabler this has been for startups. A lot of these companies are in the social applications space. Zynga is one prominent example. With a cloud, a startup can focus on developing its application and pretty much ignore the server resources. As new servers are required, the developer can pick a template and start it up. This helps the startup go to market faster. Social applications represent a large segment of the application space running on clouds like Amazon EC2. Companies, like IngBoo, benefit greatly since we can manage our computing and storage resources effectively by always being “right-sized”.

If you recognize the emergence of social media as a core pillar of the Internet and view it as a new frontier, the perspective is quite different. In the Business-to-Friends (B2F) universe, the enterprise is a friend of the consumer and sends relevant updates based on the consumer’s expressed interest. In the case of retail, relevance would be something that I am shopping around for at this time. Nothing has changed in terms of user behavior. It is still a question of user intent. The study correctly points out that a consumer is unlikely to purchase something merely on recommendation from a friend. The use case is obvious: While Mike is looking for a plasma flat screen TV, Joe is looking for something else. No match. Consequently, the study finds that only 2% of transactions originate from a social network such as Facebook.

Besides the user intent issue, there are a few other reasons for this number:

• The lack of an email marketing solution for social media - One could argue that the Facebook Fan Page could be used as an email marketing tool, pushing promotions to users’ news feeds. The problem is that the news feed is very personal and noisy. If the promotions are not targeted, they will simply get lost, resulting in poor revisit rates and conversion.
• Users shop around and consider recommendations before buying – This user behavior also impacts the seemingly low referral rates. Users may very well be getting recommendations from their social network and then go to a search engine to find the product they are looking for. While the social network played a key role, there is no traceable data to prove it.

IngBoo offers a Business-To-Friends (B2F) solution that extends the retail floor space to Facebook and Twitter using personalized social promotions. Our data speaks for itself. We deliver view rates in the 40%-50% rate and click-backs of 12%. These are pretty phenomenal results, opposite of findings in the study.

Social media marketing remains in its infancy. Comparing proactive marketing means, such as email marketing and search advertising, with the net referral traffic from social networks is like comparing apples to oranges. As it currently stands, it would have been better to compare portal banner ads with banner ads in Facebook. On the other hand, you were to be compare email marketing to a solution, such as IngBoo, you would arrive at a very different conclusion.

USAToday published an interesting article about the ordeal. If you recall, Google stopped Facebook from pulling email addresses to build friend lists. It seemed only fair since Facebook wouldn’t allow Google to build email address lists from Facebook friend lists.

This begs the question: Who owns my email address list and my Facebook friend list?

It seems it would be the user but I guess that isn’t the case? Assuming that reason actually exists and my address/friend lists are mine, shouldn’t I be allowed to do what I want with them? I guess not.

It appears the end-users have little say here. We can’t even vote with our feet since it has little impact. Maybe time to start a new Internet movement – Consumers for ownership of our personal data!