August 29, 2007

why microsoft should buy facebook


[Click on image to enlarge/download/print etc. Licensing terms here etc.]

I was thinking about Search and Social Media earlier today. Call it "Google vs Facebook", if you will...

Let's say you're going to Phoenix next month with your spouse. Let's say you've never been there before, nor do you know anyone who lives there.

Let's say you're looking for a nice Vietnamese restaurant in Phoenix to take your spouse to one evening.

So I'm guessing what most people would do is google "Vietnamese Restaurant Phoenix", and see what The Holy Algorithm comes up with. You might luck out, you might not.

As a blogger with a pretty big audience, I have found a better way. I just write my dining plans on the blog and/or on Twitter and/or Facebook, and invariably I'll get a couple of good recommendations pinged to me within hours, sometimes minutes. And because I know these folk, or at least, they know me and read my blog, there's a certain amount of trust and bonhomie that comes with the recommendation.

But like I said, I have a pretty big audience, so this works pretty well for me. But for someone with a smaller readership, you could question how well this approach would fare for them.

So I'm thinking about how Facebook and/or its competition could help fill the gap.

If if they can, even partially, then Google should be concerned... because at the end of the day, all search begins and ends with people, not algorithms.

[UPDATE:] Nice comment from C. C. Chapman:

Not sure if Facebook is the right vehicle for this, but I completely agree that it is more about the people and recommendations then anything else.

I know Skype has been trying to integrate this kind of capability into it, but I never think of using it when a quick tweet or blog post is more effective.

I wonder if things like Spock or Mahalo will help bring this close. Hmm....

Yeah, it'll be interesting to see what Mahalo does with this space. But I don't how much they're planning to build their Search via paid employees, versus a Wikipedia-like social network. Jason?

Posted by hugh macleod at August 29, 2007 9:46 AM | TrackBack

Not sure if Facebook is the right vehicle for this, but I completely agree that it is more about the people and recommendations then anything else.

I know Skype has been trying to integrate this kind of capability into it, but I never think of using it when a quick tweet or blog post is more effective.

I wonder if things like Spock or Mahalo will help bring this close. Hmm....

Posted by: C.C. Chapman at August 30, 2007 1:33 PM

Hugh, I think you've mashed together search + recommendation-- which aren't necessarily the same thing.

"all search begins and ends with people, not algorithms"

What Google can't do is: identify whether those links constitute positive/negative referral, tell whether there was some actual humans behind the link, etc., etc. 1. Google can't tell the difference between a person and an algorithm. 2. Google can't make recommendations.

They're not in that business (yet).

Posted by: Aneel at August 30, 2007 1:57 PM

I don't know enough to opine on the matter of the big software companies, but I do know that the community website model is very successful here in Miami. Miami Beach 411, where I freelance as a senior writer, has an active forum where editors and guests interact and develop this kind of trust and cameraderie. All the editors are Miami-based people who've lived her a long time and can offer in-depth information about the city. As a matter of fact, folks do ask us those "where do I take my spouse to dinner" types of questions and it's not limited to tourists; locals ask as well. Best of all, people leave feedback about their experiences. It develops a social history.

This model is useful especially for people who don't have blogs, don't Twit or are barely computer literate.

This only goes to prove your point, of course. You're absolutely right, nothing replaces human interaction.

Posted by: latinbombshell at August 30, 2007 2:11 PM

Thanks, now I have an app idea bouncing around in my brain and I have other things to get done this morning.

One thing you're missing is that a lot of people are still using forums and message boards. What I see in my research is that people still rely on the off-topic sun-forum to get these recos. From surgery options to restaurants our not so geeky family are on the forums they joined 5 years ago or they go to something like TripAdvisor or chowhound.

But I still have that widget knocking around upstairs for the geeks. Hmmmm...

Posted by: Leah at August 30, 2007 2:11 PM

The question stands, can anyone actually buy Facebook? It's tough to buy something that isn't for sale.

Posted by: Robert John Ed at August 30, 2007 2:27 PM

Let FB buy thingamy( the product not the company) and let the FB community 'Model itself' the people complexity to their hearts content.

That will make FB proposition more compelling than 'That is where everyone is partying right now'.

Then beg/steal/borrow or better still facilitate(through FB itself) a Algorithm brigade.

Beat Google, Microsoft in their game with the power of People + Algo. Buy one of them, or both of them.

Make loads of money on the way. Stay humble. And invincible.

Posted by: Balaji Sowmyanarayanan at August 30, 2007 3:15 PM

YouTube wasn't for sale either, remember?

I had a discussion on the Facebook Blog Buzz group not too long ago in which this exact subject came up, and I said that whoever buys Facebook wins. As in Wins. I can actually envision Facebook as being part of the larger MS platform connected to Office and Outlook. Scary.

Posted by: Michael Martine at August 30, 2007 3:16 PM

Playing devil advocate....
Lets say someone, Facebook, Mahalo, whoever, does build something that can match those kinds of thing up.

How long before people start 'optimising' for those things, or start spamming the social spaces that used by the services?
I reckon about 5 minutes...

You already get false 'customer feedback' on various sites like Amazon, where you see customer reviews these days, how sure can you be that they are genuine customer reviews, and not some marketing persons biased entry?

SEO's already talk about optimising for local search. Take local search and give it a social twist, you'll still get people trying to market their own stuff in that space.

Posted by: Adrian Lee at August 30, 2007 3:30 PM

This is spot on, Hugh. People trust people not machines or numbers. That's why [auhtentic, transparent, etc.] word of mouth is driving the economy. Maybe the folks at algorithms-r-us should start a word of search business... perfect for all those people who run around talking about search results.

Posted by: rick murray at August 30, 2007 3:30 PM

There are searches and there are searches. I'm not sure how good social media would be if you wanted to find out about "Aerodynamics at Low Reynolds Numbers" Google would be good.

Posted by: john at August 30, 2007 3:50 PM


I think this ultimately comes down to human your post captures. If I am looking for anything - restaurant, technology purchase, etc I try to find someone I know/trust who has already done it and can give their opinion or recommendation.

While search is great and it has opened up our options for the way we buy enormously, I think it sometimes suffers from the same skepticism that many feel toward advertising. I know when I search for something I skim right past ANYTHING that looks like it is from the manufacturer or a store to find something from a person. A blog post is usually the goal here.

I agree with CC that Facebook may not be the vehicle for this, but a more social version of Epinions is ultimately the goal or a "post for recommendations" section of another site. Something that opens it up to people that may not have quite the network that you do, but still need the recommendation.

Thanks for the post. Thought provoking as always!


Posted by: Kevin Behringer at August 30, 2007 3:52 PM

what about yelp?

Posted by: George at August 30, 2007 5:37 PM

No kidding George, although it's still a very bay area resource, but IMHO they have solved the problem of local information, whether it's an ear doctor or a bar, they have an amazing depth of information. The difference between yelp and facebook is that the yelp community is incented to be productive, to create reviews, and build yelp as a resource. Facebook on the other hand does not focus on encouraging it's users to create intelectual capital.

Posted by: Karl Long at August 30, 2007 10:16 PM

If you are visiting Bellingham, WA and you would like some honest recommendations from enthusiastic locals, you could not go far wrong with hopping on LiveJournal and posting to the bham community. Mind you, along with a couple really easy to spot and good responses to your question, you'll also get some advice for finding a dentist for your cat along with a tablespoon of snark. But that's just part of the fun!

My point is, as questionable as LiveJournal looks, it is already providing this level of service all over! And people already take advantage of it. Just, no one's really talking about it.

Posted by: Fenmere, the Worm at August 31, 2007 2:59 AM

very true - it a lot harder to game people/users who are the customers than the 'system', now if this could synch in with my mobile phone and provide real time comments about things I'm interested in as I go past them via GPS...tick tick

cheers from the Cally Road, London

Posted by: peaky at August 31, 2007 10:20 AM

Speaking of aerodynamics at low Reynolds numbers.... :)

As to MSFT buying FB.....what was the price ask... $5bn? The build case must be very compelling at that level.....

Posted by: alan p at August 31, 2007 1:26 PM

Not gonna happen. Not that the Mac vs. PC debate is all that relevant anymore, but Facebook is a Mac shop, with key former Apple employees. I really think these guys could not bear to watch MS stop all over the Facebook design and strategy aesthetic. Facebook is the anti Microsoft. It would be a real shame and a setback to the industry if this were to happen. Do you think that the Microsoft could inject the Facebook aesthetic across the organization? That might be a nice thought, but as a user I would not want them to take that risk.

Posted by: Nick D at August 31, 2007 4:18 PM

I don't believe it is an either/or situation. Recommendation alone is not scaleable to the point of replacing the google like search activities.

However, an algorithm that incopororated human interaction on facebook (e.g. recommendations on restaurants to 'friends' added together to create a meta-rating) would be very powerful.

It wouldn't be spam-proof, but would be interesting.

Posted by: Robert McIntosh at August 31, 2007 4:33 PM

People are looking in the wrong place. The answer to people powered search is Lijit.

You upload your trusted network into Lijit ( network, blogroll, etc). Default search is across your network and their connections. That pretty much defines tacit trust in my eyes. It combines algorithms and people quite nicely.

Posted by: Deepak at August 31, 2007 8:51 PM

Big daddys buying small companies humm.. I never like this idea and always feel bad when see brands changing because they were bought by someone else.

Posted by: Mohd. Hashim Khan at September 1, 2007 7:13 PM

Hugh, talking of social tool, I think you got bitten by the quechup sting. I got an invite from you to join them.
Was flattered but surprised as my email address (same as this one, domain) was only in your books as part of an ol stormhoek campaign, so after googling (yeah, google again) I did not sign in of course, and hope you won't get too much hassle from this. (basically, quechup offers to check your address books for people on quechup, but does spam-invite all the others without clearlys stating it...)

Guys, avoid quechup, they are getting quite a backlash around the web...
Do we need another facebook /linkedin/ friendster/ myspace/ smallworld/thingie? (Didn't know we needed the originals in the first place, but then that is me and my misanthropy)

Posted by: Xavier at September 2, 2007 9:30 AM

It may be smart for MicroSoft to buy FaceBook. It would also be smart for Google to add a search category for FaceBook.
When I planned our family's Scotland try this summer, I used Google to look for lodging. The approach the proprietor took in the design of the look and content of their website was the differentiator. I also used Google maps & Google earth, Mapquest, local history sites, and whatever else I could find. Since I wasn't on Facebook at that point, it didn't factor in. But it could have.
However, now, if I can get multiple streams of different types of content, then I have a better idea what I'm seeing, whether from the algorithms or personal recommendation.

Posted by: Ed Brenegar at September 3, 2007 7:49 PM

hi, what is this for a picture. its not a beautyfull picture :-)

Posted by: Groups at September 3, 2007 9:47 PM

On the other hand, if this was a ploy to find a good Vietnamese restaurant in Phoenix because you are coming here thendrop me a line. I'll tell you my personal favorite.

Posted by: Dave at September 3, 2007 10:08 PM

Another good ponderance, Hugh. The businesses that companies like Google, Facebook, YouTube and Flickr all have in common is that they enable a transaction that is done in an instant and can be enveloped by another, broader transaction. I'm not sure that FB is such an attraction when the value is becoming commodity -- to enable people to post and share is only attractive until the next post/share + ____ comes to market. Fickle is the web audience.

The switching cost is SO low for most cloud services that if a better algorithm comes their way, poof, they run the risk of oblivion.

I think to truly survive long term, FB would need to connect with a company who has a higher switching cost (which, you may be right, could be Microsoft) but I think FB will be nothing but a feature embedded into a larger schema someplace else. Any speculation as to where?


Posted by: kris Fuehr at September 4, 2007 5:36 AM