A Perspective on Entrepreneurship, Technology & Locative Dynamics

Mark Zuckerberg, the founder of social networking site Facebook, wrote a blog post called “Thoughts on Beacon”. Beacon is the one month old highly controversial Facebook advertising platform that is developed to monetize the huge Facebook user base in better ways than before. Advertising on social networks is still a difficult topic because users are more interested in their friends updates than in any ads surrounding them. The result are very low ad click rates. Therefore it is necessary to think about new ways of advertising and how to create more targeted, highly specific ads. Behavioral advertising is the big hope and its intention is to analyze thoroughly the user behavior with the goal to predict exactly the user’s interests and intentions. Sounds scary, it is…

“About a month ago, we released a new feature called Beacon to try to help people share information with their friends about things they do on the web. We’ve made a lot of mistakes building this feature, but we’ve made even more with how we’ve handled them. We simply did a bad job with this release, and I apologize for it. While I am disappointed with our mistakes, we appreciate all the feedback we have received from our users. I’d like to discuss what we have learned and how we have improved Beacon.” Mark Zuckerberg

What Beacon is supposed to do, is to collect user data from participating websites. This means if you go on a website that is collaborating with Facebook, it can send your personal information, like the IP, the URL you accessed, the access time, the products you have been interested in and so on, back to Facebook’s Beacon which creates very detailed user profiles. You don’t have to be logged in and you don’t have to be a Facebook user, this is how the platform is supposed to work. This gathered information is also used to send automatic updates to your friends on Facebook with the sites or products you have been interested in. By default this “Share everything” behavior was enabled but now they switched from opt-out to opt-in which is a more sensible approach.

The questions that arise:

• How can you be sure that if you access a website that it won’t send personal data to other “partner” websites? From a technical standpoint this is totally transparent for the user and out of his or her control.
• Is the future of advertising the collection of personal user data from a large number of websites? There will be huge centralized data repositories with the purpose of creating detailed user profiles to predict behavior.
• Is it good for the user privacy, if a a social network opens up its platform? Data portability is something useful for the user but if it is too easy for third parties to get access to it, the risks will increase. Nearly all Facebook users integrate third-party applications which are provided by untrustworthy companies, private persons and insecure servers. With the Open Social widget platform this development continues and there are no standards how data privacy protection can be guaranteed.
• More and more applications are connected with each other, through APIs for example, but are you always aware that you access a meta application working on top of maybe several data leaking, untrustworthy, insecure servers?

A difficult topic with no solution so far. Data privacy standards and agreements are always based on trust and often failed its purpose.

• Market Watch: Facebook’s Beacon collects non-user data as well
• Thoughts on Beacon by Mark Zuckerberg
• Privacy settings for External Websites for Facebook users.
• Paypal redirects links to ad agency DoubleClick

In my last post I referred to Chris Shipley, a journalist and analyst of the Demo conference. Read the About Demo page and you will recognize that this is a conference worth following, especially if you are interested in market trends and cutting-edge entrepreneurship. The special thing about Demo is that every company presenting there has not yet officially launched. So definitely the right place to follow early stage ideas and concepts.

“For an early look at emerging technologies, the Demo conferences can’t be beat. Attended by corporate execs, entrepreneurs, venture capitalists and other tech junkies, the semiannual events feature demonstrations of dozens of new products, none of which has previously been shown publicly. Unlike other trade shows that allow any company that can afford it to exhibit, each product at the Demo conferences is handpicked by executive producer Chris Shipley, a discerning journalist and analyst who has covered the industry for more than 20 years.” Mary Kathleen Flynn “The Woman Behind the Curtain,” The Deal, October 27, 2006

Check out their informative website. They offer a video archive of Demo conference videos, a 6 minutes podcast series with former participants and a blog worth following.

I just read a brilliant post by Chris Shipley, a journalist and author for the prestigious Demo conference, with the title “Distribution Trumps Aggregation“. It is a must read because it really gets the point what is going on on the Web.

“That game is going to change. The laws of large numbers will still apply: the more folks exposed to your service or product, the better the opportunity to monetize your business. But bringing people to a single Web site will become a smaller part of the equation. The winners in the big audience sweepstakes will be the sites that distribute their products and services across the Internet. Instead of aggregating audience to one Web site, successful Web-businesses will distribute a Web service out to audiences who gather on other Web sites.” by Chris Shipley
If you develop your product or service you have to think about widgets, APIs, web services, feeds, third-party integration, collaboration, coopetition and every opportunity to distribute your services. To reach customers you have to face them where they are and nowadays more and more time is spend on social networks like Facebook or MySpace. Obvious consequence, OpenSocial and the Facebook Developer Platform are becoming more and more important.

I am planning other posts on APML, the attention profile markup language, and the more and more common lifestream feeds. Everything points to a direction where ubiquitous connectivity of services is targeted and a website is not a silo anymore. Exciting times.