Flavio about Business 2.0

This week’s hebdo contains an article talking about Obama’s popularity throughout the world. They start of by mentionning different polls conducted by polling agencies or themselves to show how Obama is the world’s most popular candidate. But then they do one thing which I don’t think can be justified from an journalist view point, they do quote facebook polls (!) to show that 54% of Iraqis support Obama or 71% of Brazilians. As they mention correctly, the poll has been conducted by asking 1000 facebook users in each of these countries. How on earth can this be representative? They do mention that it is an “exotic” way of conducting polls, but reads these details anyway? Especially in the headlines.

They also quote a poll conducted on a polish website where they do in fact remark that this is a questionable way of polling people (it is probably totally useless).

Now you don’t really want to sell me that 1000 facebook users is representative. It is anything BUT representative for obvious reasons!

Just to make sure, in case someone in hebdo’s redaction is reading this, here the reasons:

• Facebook users is a highly biased group of any population, because it contains proportionally more young people. On top of that the people on facebook are more openminded, internet connected people that certainly do not represent the entire population.
• Do you know how easy it is to create a fake facebook account and then vote in these polls?

Where are we today that a major Swiss publication uses facebook as a major source for their articles?

Come on hebdo, you can do better than that.

Jesse Farmer has provided the blogosphere with an excellent article on the state of the facebook platform, after doing three months of meticulous research on developer activity and active users in newly launched applications.

He’s looked at how many developers are active in the facebook developers forum and finds that the posts per day have decreased by 51%!

Here’s his graphic on weekly postings (graph done by Jesse at 20bits.com)

The trend is pretty clear. The facebook platform is losing it’s hype status. That doesn’t mean nobody is developing new apps, it just means that not everybody is trying to get a piece of the cake anymore.

He’s also looked user activity with new applications and we see the same trend. A new application launched today in average will have 3 times less users than if it was launched 3 months ago!

Obviously the overflow of applications and the increasing limits on the virality (no I’m not the inventor of this word, people have used it before) of facebook apps as imposed by facebook trying keep users unspammed and happy are making it harder and harder to gain a large audience quickly.

Jesse also points out developers are increasingly focusing their time and energy on other platforms, where the conditions for creating a successful app might still be better. The people he’s talked to say they’re not leaving facebook as a platform, but it’s just becoming one of many.

From this we can draw the following conclusions:

a) the dream that facebook will become the new web os is dead. It was probably more created by the media than really targeted as a goal by facebook. There are still almost no useful apps out there and with so much clutter of “my drunk friends” apps it is becoming even harder to stick out as a useful app. Many people just don’t use any apps at all. This is visible now in the declining application developer activity.

b) The fact that developers are less active on the platform than a few months ago may hurt facebook’s valuation in an IPO setting. But then again, how much more are they worth than before their platform launch?

So does the end of the platform - “everybody and his auntie is developing an app” - gold rush matter?

Not really. This is probably one of the most successful marketing and PR campaigns ever created.

How many newspapers and bloggers have written about facebook, how many people even started their blog on facebook since the release of the facebook platform? (The facebook blogs were around before, I know guys…).

How many app developers have invited even more people to facebook just to get them to install their app?

Who has invested in facebook?

Think about how massively this move has brought to everyone’s attention from the biggest tech (but not only tech) corporations to journalists and finally, to new users.

If you divide the worth of the immense amount of free publicity they got by the amount of money they invested in developing the facebook platform, I’m pretty sure that’s a deal most of us would not have hesitated to open up our piggy bank for.

It was a genius move by facebook and allowed them to overtake myspace in reach (at least according to alexa, not so according to compete and quantcast)

Facebook could shut down it’s platform tomorrow and would still be worth as much as today.

[via allfacebook]

I’m here at Lift in Geneva where I had the chance to talk to Scoble about one of my projects. He was kind enough to put up a little video interview of him and me online:

If you’re interested in what I was building, don’t hesitate to contact me and please join our facebook group: http://www.facebook.com/group.php?gid=5145637860

With the new pages and social ad system that facebook has created it is now possible to see how many people of a certain country are members of facebook. This number differs significantly from the number of people having joined the Switzerland network. Currently, there are 152′900 people from Switzerland that are members while only 106′000 have joined the Switzerland network. The ratio of joining the social network is thus 69% (my estimate earlier was 50%).

If you divide this number by the total population of Switzerland the ratio is 152′900 / 7′507′300 =  2%! In other words every 50th person in Switzerland is on facebook. It’s pretty amazin at which rate facebook has grown in Switzerland. In the beginning of the year when I joined, there were a mere 3′000 users in the Switzerland network and this number has now multiplied itsself by 30. And the number can still multiply by 14, as shown by the facebook demographics of canada and norway.

Interestingly there are more women who use facebook in almost every country (except the arab world). This is also the case in Switzerland where 51.7 % of the users are female.

When will we use facebook as a tool to vote in elections? Which other platform can boast as many members from Switzerland?

robwebb2k did a manual calculation of facebook penetration in different countries using the facebook flyer pro tool, which nicely indicates how many people you are reaching with certain demographic selection, like male/female - single/in a relationship or even favorite band or movie.

Here are the results:

As you can see, the penetration in Canada has reached an absolutely unbelievable 22%. More than every 5th Canadian is on Facebook - more than any political party for example has voters.

Extremely high penetration is also reached in Norway, where about 19% of the population is already on facebook.

If you look at other European numbers, Switzerland has a quite high penetration of 1.32 %, much higher than it’s neighbors France, Germany or Italy. Probably due to the internationality of our country.

How much longer until we reach 20% in Switzerland?

When are votes going to be cast over facebook or official government decisions broadcast? I bet you can reach more people than through traditional media.

As I blogged before, we put our job ad for a php developer on the Xing Marketplace.

Now I just received an email from Xing telling me that they are going to start charging for use of the Xing marketplace, but contrary to already established job sites like stepstone, they charge on a per click basis rather than on a per ad basis. This will make a lot of sense to headhunters and HR people who can have a much better ROI overview, similar to google Adsense.

One click costs 0.49 € and might drive strong additional revenue to xing. The job ad I mentioned before has had 20 clicks in 48 hours = 10 clicks a day.

This would bring an additional 150 € to Xing for a job ad that runs for a month (usual length). Other job ads have much higher click rates, as suggests the marketplace startpage: 2383 clicks for the most popular one ( = 1 167.67 € for Xing ).

In the last 48 hours there were at least 350 new job ads. Assuming that people continue to use Xing marketplace even though they have to pay as of today, and assuming those job ads have the same clickthrough rates I have, this would mean 175 * 10 * 30 = 52k clicks a day or 26k € of revenues a day. Yearly this amounts to almost 10 Mio €. Not bad for Xing, which would mean they could augment their revenues by 50+ % with one move. They made 8.2 Mio € in the first semester of 2007.

What I like about Xing is that they are not trying to monetize their platform with ads. They are providing helpful service that generates return on investment for it’s users. They are making up to 20 Mio € Revenue (expected for this year) with only 4 Mio members, meaning that each member spends 5 € p.a. on average. Corresponds approximately to the 13 % premium member rate.

Imagine they had the facebook number of users, 40+ Mio, they would do 200 Mio € in revenue, more than 280 Mio $! Compared to the rumored 150 Mio $ of facebook, they are extracting double the amount of money from their users! Xing is doing great on the monetization, really.

Their P/E is around 60 (190 market cap / 3 mio profit), making it a bit more expensive than Google (53.29), but still much less expensive than Baidu for example (P/E = 180). With their new revenue source, this company might just make quite a lot more revenue, so maybe their are not that expensive, after all.

[Disclosure: I own Xing shares]

Remo and I just decided to sponsor our first listing on facebook marketplace.

Trigami is looking for PHP Crack to help further improve their products and their platform.

If you know PHP by heart and Mysql while you’re asleep, this one is for you:

PHP Crack für heisses Startup: Trigami

As you can see on the link above, this is also my first job ad on Xing, the usability has again convinced me. But I had only 3 views since this morning when I posted it, in that is rather little.  So what is it good for to have 8 fields (salary, qualifications, position, time percentage etc.) describing the job, when your job is not found anyhow?  Let’s hope the number of views will increase over time.

On the other hand, we decided to sponsor our listing on facebook for just 4$ in the networks Switzerland and ETH Zurich for one dollar each and then we bought 500 flyers for both networks for another 1$. Let’s see if the clickthrough rates are any good.

In a very interesting article, the New York Times talks about several developers-entrepreneurs who are building facebook applications and try to earn money with it. And really no application is reporting profits. Most people can barely cover their server costs.

A couple of reasons why it is so hard to monetize an application:

• Ads can be displayed only on the canvas page but not on the user profiles, where most user attention goes.
• An application that gives user no incentives to come back and explore more stuff, or that is simply not social enough will not generate enough pageviews to generate a reasonable income - even though it might get a lot of installs, e.g. My Heritage app : has 600′000 installs but only 2% daily active users!
• An application on the other hand that is highly addictive has the same problems that all social networks have. Users are focused only on the content because it is so interesting.
• An app install is a really low commitment by the user, he barely clicks on add application. He is not a qualified prospect at all and is not likely to buy a product featured in the application.

A lot of people are building applications just for the fun of it. But how can people with a VC in their back make apps that much better than the 1000 of developers who code for free?

The only people that are making money with facebook apps right now are people that are selling advertisment in their apps for other people’s apps (like google adsense in a way with pay per install/click ). And that’s certainly not sustainable.

The facebook applications are in an extreme hype. Facebook only VC’s like Lee Lorenzen certainly help the fantasies

growing.

via allfacebook

As you may have noticed on your Xing account, they introduced a new feature that helps better describe your past. You can now add what you were responsible for at a specific job and what kind of company it is. This is something that Linkedin has been offering since years and is no technological challenge to implement.

Xing has done a nice job adding some ajax layers to facilitate editing. The usability of Xing is great, and they’re doing everything to make it even better.

On the other hand, linkedin has finally introduced profile pictures, a feature Xing has been offering since their start.

Those small tweaks are necessary and help the main professional social networks keep up with others like facebook. While they might not like each other that much, they should maybe be more worried about facebook when they introduce their friend grouping feature.

This VC thinks that Facebook is worth 100bn $. He’s running a facebook only VC Fund. He says the valuation of 100 bn $ is realistic if we have 200 mio users in 18 months (time of the IPO?) valued at 500 $ per user. Compared to the approx 100$ valuation of a Studivz User, that doesn’t even seem that unrealistic to me.

Very quickly, facebook could be worth as much as our friends at google: 160bn, at the time of this post. Not to mention yahoo, with a measly 30bn $ valuation. Maybe they should’ve bid a bit more when Facebook said no to 1bn $…

Enjoy the movie with courtesy of Facereview

See also:

Is Facebook worth $100 billion? Yeah, and here’s why: (highly recommended)