The Facebook Effect: The Inside Story of the Company That Is Connecting the World
juli 16th, 2010 by Andreas från XavierMedia.se
Product Description
IN LITTLE MORE THAN HALF A DECADE, Facebook has gone from a dorm-room novelty to a company with 500 million users. It is one of the fastest growing companies in history, an essential part of the social life not only of teenagers but hundreds of millions of adults worldwide. As Facebook spreads around the globe, it creates surprising effects—even becoming instrumental in political protests from Colombia to Iran. Veteran technology reporter David Kirkpatrick … More >>
The Facebook Effect: The Inside Story of the Company That Is Connecting the World
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juli 16th, 2010 at 10:51 f m
I'll keep this short and sweet. I got the book Monday night and finished it within about 36 hours in between working and walking my dog AND I really don't read that many books.
If you have an interest in the world around you, YOU SHOULD READ THIS BOOK.
If you have an interest in making the world around you a better place, YOU SHOULD READ THIS BOOK.
If you have an interest in technology, YOU SHOULD READ THIS BOOK.
If you have an interest in government and politics, YOU SHOULD READ THIS BOOK.
If you have an interest in media and entertainment, YOU SHOULD READ THIS BOOK.
If you have ever been on Facebook, even infrequently, YOU SHOULD READ THIS BOOK.
It is an unfettered look into one of the greatest culture phenomenons since the television was invented.
I honestly don't even use Facebook that much but this book is about WAY MORE than that. READ IT.
Rating: 5 / 5
juli 16th, 2010 at 1:51 e m
I read "The Facebook Effect" because "Fortune" published a large excerpt in its 5/11/2010 edition, referencing Facebook as a "multi-billion dollar media giant." It was impressive to learn that Facebook has gone from a 2004 dorm-room novelty to a company with 500+ million users. "The Facebook Effect" tells how this was accomplished and where it's supposedly going next. Unfortunately, I also realized that "The Facebook Effect" is largely a syrupy 'puff-piece,' probably due to the free access the author brags about at the beginning. Author Kirkpatrick, a New York Times reporter, contends that Facebook has changed social life and become a ubiquitous presence in marketing, politics, and business. The first claim is certainly true, while the latter claims are much less credible. Facebook, like Google, started as a dorm-room project without a business plan; unlike Google, it is not clear that Facebook is headed for a happy ending.
The book begins with the story of how Facebook brought together hundreds of thousands of protesting Colombians in early 2008 – upset over non-stop FARC atrocities and abuses. This occurred within little more than a month after the involved page was first created. Similarly, along with Twitter, Facebook played a role in anti-government demonstrations in Iran's mid-2009 elections. Facebook's viral nature – sending news about each member's joining a group to the News Feeds of that member's friends, etc., etc. is what allows it to enable users to play a greater political role and challenge repressive institutions. Kirkpatrick adds that these need not be limited to serious gatherings – sometimes mass local pillow fights and water fights have also been spawned via Facebook. However, he fails to acknowledge that social networking's role in protesting oppressive regimes is both easily turned around and co-opted. Evgeny Morozov (May/June 2010 "Foreign Policy") points out that Iranian authorities subsequently published photos from the protests, urging the public to identify protesters, and in the future these networks will likely serve as an early warning system to authoritarian regimes. This vulnerability is further aided by Facebook's encouraging users to correctly identify themselves. Regardless, Facebook has been banned at least temporarily in Bangladesh, China, Pakistan, and Vietnam, as well as at several worksites, and by the U.S. Marines' 'Military Network.'
Facebook is now a 1,400 person corporation based in Palo Alto, with revenues that could reach $750 million in 2010, per the Wall St. Journal. About $300-400 million in 2009's $550 billion revenues came from small, local advertisers (eg. digital cameras to married men who have not posted photos), $100 million from its 260-person sales staff, and $30 million from virtual presents (eg. birthday cakes to friends). Sharing information via this medium, however, has raised substantial privacy concerns. The average user has 130 'friends', and shares information with up to 5,000 (the maximum allowed). Facebook is the second most-visited site, after Google, and claims to be growing at 5%/month. About 75% of its active users reside outside the U.S.
A major portion of the book covers the origin of Facebook, going back to September, 2003 when Zuckerman entered Harvard as a computer-science major. His initial foray involved helping students see who was taking what courses. Officials reacted negatively to his prying into student files, as well as hosting the service on school computers. Undaunted, Zuckerman relaunched his efforts onto an $85/month site with an early version of Facebook. It soon spread to MIT, Princeton, Brown, and Boston University. Zuckerman also generated legal controversy in doing so – others contended that he stole many of his ideas while temporarily employed as their programmer. Reportedly the dispute was settled in 2008 for $30 million in cash and stock.
MasterCard became Facebook's first commercial partner, paying only for applications filled out by Facebook's then sole audience – college students. Using their college-issued .edu email addresses ensured people were who they claimed to be, and helped limit privacy concerns. Initially users were also restricted to searches within their own institution. Facebook expanded to high-schools in late 2005, and later to anyone 13 and older. Facebook's new photo-sharing feature brought a major boost in users – photos could only be tagged with names of those who had confirmed that they were friends of the poster. Facebook alerted people when they were tagged, boosting use further. By late 2009 Facebook was hosting 30 billion photos – the world's largest photo site.
'News Feed" was another new feature, though much more controversial. It watched friends' activities and fed notice of those changes (eg. becoming engaged) most likely to be of interest every 15 minutes or so. Many reacted negatively, sensing they were being 'stalked.' Early versions even reported users' purchases to their friends. Privacy controls were added to address these and other concerns. However, Facebook has ended up with a bad reputation for making personal data available without permission, and having confusing privacy controls. Raj Goel, owner of security compliance consultancy Brainlink International Inc. points out that most people today don't realize that nothing digital is ever truly destroyed, and "Ten years from now, kids will be Googling their mommy's spring break pictures and their daddy's Facebook profile, if they don't do so already."
Needing money to fund the ever-growing need for servers, portions of Facebook were sold – first valuing the firm at about $85 million, then later at $15 billion. (Google's valuation in 2010 was about $200 billion.) Subsequent sales by employees, and by Facebook to VC-firms in 2008 valued the firm at between $3.75-$5 billion.
Eventually Zuckerman and Facebook also became involved in selling advertising, though it has been slow going. Google advertising is seen as responding to what a user is looking for – about 20% of the world's $600 billion/year advertising; Facebook sees its role as generating demand – about 80% of advertising, with a much lower success rate. In October 2008, Zuckerberg said "I don't think social networks can be monetized in the same way that search did… In three years from now we have to figure out what the optimum model is. But that is not our primary focus today." Another problem is that some advertisers have removed their material from Facebook because they were being displayed on the pages of controversial individuals and groups. Regardless, Facebook is no great financial success – it only reached positive cash-flow status in the latter part of 2009.
Kirpatrick's book also includes some of Zuckerman's less mature actions – eg. showing up in pajamas for an interview with a VC-firm, as retribution for a prior slight, as well as his repeatedly going around in circles about selling the firm.
Bottom-Line: I have no idea why "Fortune" magazine featured this book. Facebook is a "multi-billion dollar media giant" in name only, and in desperate need of an adult like Google's Eric Schmidt taking over. Its underlying business model has a fatal flaw (Alan Patrick, [...]. Increasing Facebook's value and revenues can only be achieved through external sharing of user information; in turn, that creates rabid user negativity about privacy violations. Absent privacy violations, Facebook advertising is currently doomed to being no more effective than throwing darts at a wall – blindfolded. Facebook, and the rest of the social network sites, are nothing more than dot-com 2000 all over again.
Suggestion: Facebook should return to its college student roots, and limit their access to fellow students at their campus. Facebook advertising would then be limited to items of general interest to those students. The privacy issues would go away, and valuations would become realistic and sustainable.
Rating: 3 / 5
juli 16th, 2010 at 2:11 e m
Kirkpatrick isn't an impartial observer – he's really a Zuckerberg fanboy. Of course, he would have to be to get the full story and access he'd need to write the book, and so the book does contain a fascinating account of Facebook's history. It also contains a fascinating, if at times worrisome, description of Zuckerberg's thinking and philosophy behind Facebook. The parts that got the most frustrating were Kirkpatrick's attempts at examining why Facebook is so popular, and it's effect on the world. Here, it feels like you're reading the work of someone who spent a lot of time researching "Facebook," but not the industry and world around Facebook. I think the analysis was a bit useless, as the only other technology and internet companies Facebook is compared to is Myspace, Friendster and Twitter.
Rating: 3 / 5
juli 16th, 2010 at 4:08 e m
Full disclosure: the author is a friend and former colleague.
This book makes a compelling case for why Facebook is important, in both business and social terms. It's also a page-turner, with a fascinating story to tell of a boy genius made good in the context of vast social change and enormous amounts of money.
The tale reminds me of another that I observed myself: Bill Gates and the rise of Microsoft. In both cases, there is much to admire and something to be feared. It is a quality of our era that engineering skill often trumps human insight, and those who create the architecture for social change sometimes do so before they have gained much awareness of what it is to be human.
In the case of Facebook, one wonders whether a commercial organization that might be sold to anyone at any time should be entrusted with vast amounts of very personal information about hundreds of millions of people across the globe. To me the answer quite obviously is No — and it's just as obvious that hundreds of millions of people either disagree with me or haven't seriously considered the issue.
This book raises serious and important questions. And it's fun. You should read it.
Rating: 5 / 5
juli 16th, 2010 at 5:06 e m
If you're an American and you have a connection to the Internet, there's roughly a one-in-three chance you have a Facebook page. If you're Canadian, the chances are nearly one in two. Worldwide, the number of Facebook members is fast approaching ten percent of the global population. Clearly, those numbers justify the need for an in-depth book about the evolution of Facebook — an intimate account based on exhaustive research, including lengthy interviews with all the principals.
In many ways, David Kirkpatrick's The Facebook Effect is that book. Kirkpatrick, a longtime technology reporter for Fortune magazine, invested considerable time over several years to interview founder Mark Zuckerberg and a great many of his closest friends and collaborators, repeatedly in many cases. Although he did not interview Zuckerberg's most vitriolic critics — and there are several — his account is nonetheless reasonably well balanced. The company's major missteps — and there are many of those as well — are described in what must seem excruciating detail to insiders. Mostly, however, The Facebook Effect is a straightforward tale about one of the most astonishing success stories in the history of business on planet Earth.
Soon after this post appears, Facebook will announce that its membership has topped half a billion. Membership is growing at the rate of 25 million per month, and it's been several months since the service passed the 400-million mark. These numbers alone are enough to raise eyebrows even in an industry long since grown used to meteoric growth. But what is even more astounding about Facebook is that its members spend extraordinary amounts of time within its boundaries. Facebook has become a world in itself — a virtual world that's all too real for its hundreds of millions of loyal members, because it's so engaging.
Kirkpatrick emphasizes — perhaps overemphasizes — some of the most familiar aspects of the Facebook story. That Zuckerberg was 19 years old in 2004 when he started the service as a Harvard undergraduate. And that he almost invariably dresses in T-shirts and flip-flops. Yet throughout The Facebook Effect, Kirkpatrick treats us to scene after scene in which Zuckerberg transcends his age by decades, displaying a depth of understanding, a mastery of strategy, and a steadiness of purpose worthy of the most seasoned CEO.
It's well known that Facebook has taken its lumps again and again for violating its members' privacy. What Kirkpatrick explains so well is that these crises were the inevitable result of Zuckerberg's passion for transparency. Transparency — the sharing of information without limit — is the principle at the heart of Zuckerberg's strategic vision. As Kirkpatrick notes, the young CEO truly believes that sharing information more freely and more widely, as enabled by Facebook, will make life on earth better. Though there are logical arguments against this proposition, it's difficult to argue with passion.
The book's title is a version of the well-known "network effect," familiar to the increasing numbers of us who are actively aware of the networked world in which we live and work. The principle is simple: the bigger the network, the more interconnections among its nodes (in this case, members), and thus the more powerful it becomes. As Facebook may already be the largest human network on Earth, we can only begin to speculate what it might become if and when it grows to the one or two billion members Zuckerberg envisions.
(From Mal Warwick's Blog on Books)
Rating: 4 / 5