Endeavour Partners - Blog

My colleague, Moe, posted a fascinating chart from Alexa.com comparing page views for Google and Facebook. I dug a little deeper and made three observations:

Users look at more pages on Facebook (data from Alexa.com)

People spend more time on Facebook (data from Alexa.com)

It's Facebook that has the link

About 18 months ago I was at a wedding on the West Coast with some folks from Google.  An interesting topic of conversation was about “Who could unseat Google?” and, generally, the importance of search.  A major theme of this discussion was about how as technology and user behavior changes, the leaders in one era rarely make effective transitions to become winners in the next era.

Google bested Webcrawler, Northern Lights, and other online search companies, but – more importantly – search beat out directories such as Yahoo! and AOL as the preferred way to find and access information on the Internet.  Our little group agreed that none of the search contenders (Ask.com, etc. – there was no Bing yet) had a chance.

I argued that social networking in general and Facebook in particular were the biggest threats.  Hours and hours of online activity are occurring on Facebook where Google has no sway, no advertising opportunities, and no information about what users are doing.  More importantly, Facebook is becoming an important mode of content discovery:  People recommend books, sneakers, music, and movies to their friends.  It is also becoming an important method for spreading breaking news.  Facebook is, for example, how I found out about the Ft. Hood shootings.

Today, I saw some extremely intereresting data on Alexa.com that shows how this battle is playing out.  The following chart shows how each week Facebook and Google flip-flop as the Internet leader in total pageviews.  Facebook rules on the weekend; Google rules during the week:

Each weekend Facebook passes Google in pageviews; during the week Google reclaims the lead (data from Alexa.com)

This has been going on since Facebook caught up to Google back in August:

This pattern has been repeating since August of 2009 (data from Alexa.com)

Let me know what you think.  Will social networking displace search as the default approach to discovery on the Internet?  What are the implications for Facebook and Google if this occurs?

(By the way, this is the second time that Facebook caught Google in share of total pageviews.  The first time was during the 2008 Presidential Election.  After the election, Facebook’s pageview share dropped precipitously and took about six months to recover to their prior level.)

At the moment, we’re doing some research on the future of web services.

One of the things I was exploring was the economics of social networks and social gaming, when I came across this fascinating post from Michael Arrington on TechCrunch about the [alleged] economics and ethics of some Facebook games such as Mobsters and FarmVille:

Last weekend I wrote about how the big social gaming companies are making hundreds of millions of dollars in revenue on Facebook and MySpace through games like Farmville and Mobsters. Major media can’t stop applauding the companieslong enough to understand what’s really going on with these games. The real story isn’t the business success of these startups. It’s the completely unethical way that they are going about achieving that success

If an ecosystem is to survive and thrive, it must be built on a sound foundation; that includes a solid ethical foundation. Although these tactics may drive short-run growth and profits, they are not a basis for an enduring ecosystem. Users will become disaffected, word-of-mouth will suffer, and particularly in an environment such as Facebook, designed to facilitate communication amongst friends, information about these scams will spread like wildfire.

Clearly, some of those involved are a little sensitive about this:

[youtube=http://www.youtube.com/watch?v=2PhKRCkbX9A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1]

For the avoidance of all possible doubt, this is not a critique of the games themselves. Rather it’s an indictment of (1) the people conducting the scams [like these] and (2) those who condone them.

Note: amended thus and [thus] to reflect continuing debate on this topic

Just saw the Fan Check virus scare posted by a Facebook friend:

Like many virus scares, Fan Check appears to be a hoax.  But this is the first such post I’ve seen on Facebook and it strikes me as an important milestone.  Viruses, virus scares, identity theft and even those annoying chain letter people are moving from the world of email into the world of social networking.

Facebook identity theft threats are particularly worrisome.  In some cases, imposters have taken control of people’s identities on Facebook.  In others, thieves have used Facebook to get at security details and passwords.

But the bigger implication from all this is that the scammers have recognized that social networking is where the money is.  Look for advertisers to figure this out, too.

Google is the leader in Internet advertising because it is currently the king of discovery.  Google search allows people to find nearly anything fairly quickly.  But search is only one form of discovery.  Amazon.com and other sites use referrals and recommendations to aid in discovery, but this is built on automation and algorithms:  People with similar likes and dislikes are analyzed to help identify things you may find interesting.  Facebook is positioned to revolutionize this approach, turbo-charging word of mouth as recommendations come from trusted friends.  The question is how to harness this massive network of friends without breaking down the level of trust?

If advertisers are half as creative as the crooks and thieves, then things should get interesting.

There’s been a lot of criticism of both Nokia, for the seemingly slow pace at which it is adapting to the new competitive challenge posed by the iPhone and by Android, and specifically of the N97, its new flagship product.

when legacy (sorry, mature) software runs into a crappy half-assed UI, it’s a steaming pile of suck on a slab of garbage toast.

Little noticed, however, is one aspect of the user experience that works incredibly well, and may presage something really important: the widgets.

Nokia N97 Facebook home screen

For Facebook, having an active widget on the home screen changes the user experience in some ways that are incredibly important for many (younger) users.

So, as many managers at Nokia would acknowledge, it’s not there yet, but let’s play this forward a couple of years, through the N98 and N99… (OK, I’m just making these products up, but think of them as the Nokia N97 2nd Generation and Nokia N97 3rd Generation)

The Facebook widget, for example, shows the number of messages in your inbox, recent pokes, friend requests, and the last 3 status updates your friends have posted

As the next generation of users have fundamentally different behaviour on the web, and expectations of an always on, active screen, will the next but one generation Nokia N Series actually be their killer phone?

Two items this morning caught my attention, both reflecting on the potential of smartphones as ‘controllers:

• NetworkWorld has a piece of commentary on why the iPhone can’t be killed
• there are now pictures available of the new controller from Sonos

Carolina Milani of Gartner manages to both get it completely right, and completely wrong in NetworkWorld. First, what she got right:

Gartner analyst Carolina Milanesi says that the iPhone’s continued success in the smartphone market has as much to do with its relationship to other Apple devices and software as it does with its own capabilities.

“From technological perspective, there are devices out there that might have higher specs than iPhone,” she says. “But there’s nothing on the market today that pulls everything together to give the superior user experience that you get with the iPhone.” (our emphasis added)

Then I believe that she gets it completely wrong when it comes to the potential appeal of smartphones as a gaming platform:

“I think a lot of gamers would rather go for a full PlayStation [Portable] than a phone-based as a video game system,” she says. “At the end of day you have enough phones that do voice and they are small enough for you to carry a second device that does only video games. I’m not sure that a video game phone would bring much to Sony, to be honest.“

Completely missing the point. If your phone is a smartphone, with a responsive and powerful user interface, and motion sensing and haptics, then it’s an insanely great gaming controller. Two games on the iPhone illustrate this incredibly well:

• X-Plane -the amazing flight simulator
• Flight Control – the completely addictive casual game

X-Plane exploits the graphics capability and the motion sensors as a controller. Flight Control exploits the touch screen and the peer-to-peer networking. Both of them rock, and illustrate just how good a smartphone can be as a games controller.

In fact I was thinking of a post called the ‘Flight Control’ test; for other smartphones, can you imagine playing the game on them. In particular, it’s where the Nokia N97 currently falls short (I’ll update after the update); there’s just no way that it’d work for Flight Control.

On the other hand, the growing importance of interfaces like Facebook may mean that it’s home screen is a better answer than either iPhone or WebOS.

I’m even dubious about the Pre; sometimes it just lags in its responses to touch input, and that’d cause a major (virtual) mid-air collision.

We are already seeing a lot of investment in games for smartphones, and the iPhone in particular. If games developers like id Software are in love with it, as John Carmack said in an interview with VentureBeat:

Carmack’s endorsement means Apple has one of the leading game developers in the whole industry on its side.

“I love the iPhone,” Carmack said in an interview. “It’s a real game platform, not a tiny little toy.”

It would make a lot of sense for Sony [Ericsson?] to launch a great gaming smartphone that leverages the PSP franchise, and unsurprisingly there are recent rumours to this effect again.

The Sonos news is interesting; as any of you with both an iPhone and a Sonos music system will already know, the Sonos app for the iPhone is in many ways a better controller than the dedicated controller. In response, they’re launching a new touchscreen controller:

Sonos CR200 controller

This is important, because it represents another big application area for smartphones: home control.

Apple has its great Remote application which now has gesture control, and now almost all of the major home automation companies already have apps for the iPhone: AMX and Crestron, for example.

What’s more, the value and competitive importance means that other platform players are also targeting this; even Nokia through its home control technology and There venture.

Perhaps one of the interesting ways to think about smartphones that deliver great user experience is as ‘life controllers’.