[a3d6g2f7]

Imagine an apartment. Google is like the copy of the yellow pages by the telephone. FB is like the photo-album in the closet. People generally do not open these two books for similar reasons. They have very different usage. One is recreational, the other is not[1]. But FB believers do not want to accept this difference. And it's this difference that makes FB a dud compared to Google.

The question I have is what is going to come out of Bing's integration of FB?

1. The other is a directory where you look up businesses that offer products and services.

[Aramgutang]

While I agree with your point, a part of me can't help but wonder about the possibilities that would open up if we had the capacity to extract enough semantic information from a photo:

If I'm looking at my old holiday snaps and reliving the good times I had, I might be tempted by an ad for cheap flights to a similar destination.

If I'm looking at recent photos of my relatives' adorable children, I might be tempted by an ad for children's toys to send them.

If I'm looking at a friend's photos from an event they attended and enjoyed, I might be tempted by an ad selling tickets to that or similar event.

If I'm looking at a photo of myself from a time when I was in better physical shape, I might be tempted by an ad for a gym membership.

etc...

I doubt Facebook will ever be able to get to a point where they can make predictions as accurate at that, but given the trove of personal data and image analysis algorithms they have, if anyone could do it, it'd be them.

[JonnieCache]

The key word there is "might."

FB and its believers think that the chances are high enough to make big money, or at least that they can make them high enough.

In actuality they aren't. You might think about booking the flight, but the chances of you actually reaching for the credit card based on idly looking at photos are too small to do worthwhile targeted ads.

The idea that FB can just tune their algorithms until they know exactly what you're thinking is a fantasy based on...

1. an overly optimistic estimation of the SNR ratio of the info people put into FB, and

2. on the hilarious fallacies of the aforementioned Market Economics Fairy which assumes that everyone is always a rational actor, and that everything people do has definite reasons behind it which can be traced and understood, and their future behaviour predicted from, and crucially that these reasons can be modelled with traditional reductionism. This is plainly not true.

Admittedly my opinions here are based on guesswork, just like FBs are, but I contend that I have the benefit of drawing my conclusions without a hundred billion dollars worth of wishful thinking clouding my vision.

[a3d6g2f7]

"everyone is a rational actor"

And that's why the message to Harvard graduates[1] (purportedly America's brightest rational minds) makes deliberate reference to a man[2] who has consistently proven this to be false. The message also is centered around another pillar of rationality: the idea of "luck".

1. A link to this was recently posted here on HN.

2. One who was "lucky" enough to be awarded a Nobel Prize.

[mrvir]

Even if they could do all that it is still wild guesswork with too many possibilies. And the effectity of that fantasy also assumes that there is endless supply of advertisers from all different industries. The reality is that if, for example, only some dating sites and hosting companies are willing to pay for ads that match your profile then it is only dating and server hosting ads that you will see.

[a3d6g2f7]

This is the trap. This is what FB employees keep telling themselves everyday. This has to work. It just makes sense.

You can keep saying the data is valuable. No one is going to question that it is. We all have imaginations. And advertisers will be curious. They will try advertising on FB.

But there's just a big difference in human behavior in the two examples I gave. They are different. Not because I can make argument based on reason for the difference. But because it's what the facts show. There is a long history to this that predates the web. You might say it's been thoroughly tested.

So, you can make all the arguments you want that people should behave a certain way, and maybe you draw on examples of your own behavior or that of others you know, but when it comes down to making money and growing like Google does, it matters more what people actually do in real life. As opposed to how we think they should behave.

Yellow pages and photo-albums are things that have been around for a very long time, long before the web. If people looking at photos (FB) are at the same time looking for products and services, then why didn't photo-albums before the web have heaps of advertising in them? The answer is because there was a different book where it was more appropriate to advertise.

Read the article on the MIT or Harvard blog again. What you are describing, especially a tactic like image analysis, is exactly the type of approach he is saying is just too invasive. This kind of approach to advertising removes anonymity and violates people's privacy when it's counterintuitive to do so, according to the article.

[alttab]

That last bit Proves that Facebook truly is the work of one man.

[Swannie]

I'd say Facebook is more like the front of your fridge (cool pictures of your friends/kids), plus your kitchen notice board (that wedding invitation from last year, that save the date card for next year etc) - the shoebox that you put all that stuff in, and never really sort, plus the photo album ;-)

[Retric]

I know plenty of people with really interesting things pinned to their fridge. It often takes them a while to remember anything about pictures that have been staring them in the face for years. Why? Because, you go the the fridge to get food. People are terrible multitasking which is why Facebook advertising has such a low click-though rate and a high accidental click rate.

[a3d6g2f7]

"you go to the fridge to get food"

Hungry. Get food. How much thinking is involved in that?

Do you know what has a very high clickthrough rate on FB, probably their highest CTR ever (but which is no longer allowed)?

Pop-up styled ads for "party poker".

Not much has changed since the 1990's in this regard. Web advertising is still much the same. And anyone who has been using the web since then, such as the author of the MIT article, sees and knows this.

But do the kids with advanced degrees being hired by FB at $100K/yr know it? Nope. They believe that watching your every move and analysing who your friends are is a path to riches.

I'm not sure what's worse. The knee-jerk response of web users to blinking poker ads, or the blind allegiance of otherwise intelligent young people to a sociopath who thinks destroying privacy is a "goal" worth pursuing.

News flash: Communication on and above the scale of FB is possible without destroying privacy.

[a3d6g2f7]

OK, so if your wife says to you, e.g., "Swannie, we need [description of rarely purchased, high priced product]. The old one has stopped working." Do you check the front of the fridge, your kitchem notice board, the shoebox and then your photo album to find the contact information for who sells [product description]? Maybe you have the name of who to contact in one of those places? Or you need to call your friend to get a recommendation? Anything is possible, but what do you think is what people do _most of the time_?

FB is the next Pets.com

But it's going to be a slow, painful decline. They have raised billions to stay alive.

Solution for FB: Build a search engine and put it where the display ads are. Keep people inside the walled garden by removing any possible reason for them to leave. Like 1990's "framing" reborn. FAIL.

The whole notion of FB is utterly absurd. Tell us who all your friends are and we'll "enable" you to communicate with them (even though it's trivial to do yourself without us). We reserve the right to analyse all the information you give us and monitor everything you do on the FB site and elsewhere on the web to _try_ to make money, in various sneaky, deceptive (but really clever!) ways. FAIL.

[snowwrestler]

Google is a tool and Facebook is entertainment. If you look at the history of advertising, entertainment companies have done far better than tool companies. Who made more money in the 20th century--the magazine publishing industry or the Yellow Pages?

Think of Facebook like a magazine. When people read through National Geographic, are they looking to buy a camera right then? No. And yet all the camera companies advertize heavily in Nat Geo because having their ad next those photos creates a positive brand association.

Facebook is developing the ability to show ads that are contextual to whatever you're reading or talking about on Facebook. Their success won't be measured in clicks, but in the same way companies have valued brand ads for decades--by statistical research.

[a3d6g2f7]

I agree with you entertainment is a cash cow. But FB is _free_ entertainment. As is your photo-album and the discussions you have with your friends.

You appear to be referring to future success. It's like Microsoft talking up "vaporware". It gets people's attention, maybe it convinces some to believe and some to invest, but it offers them nothing. Only a promise of some future of which no one can be certain.

We have almost two decades of web display ads and their effects on building brands. Advertisers are not too impressed. They have waited patiently for something that compares to a magazine ad. And no one has delivered. Maybe solving the context problem might not be so easy. Maybe a website is not a magazine.

Meanwhile people are looking for products and services via the web, with their credit cards in hand. And Google has been there to help advertisers reach them.

That's not some promise of the future, that's the here and now.

Facebook has real power for influence. And some of that can no doubt benefit corporations. But what Google offers is something much more direct and efficient. And it's not a pie-in-the-sky promise, it's proven to have worked year after year.

Facebook has no business model. They only have everyone's curiousity. And that's mainly because the "content" on FB is everyone's friends and family, not the type of packaged, commercialised "entertainment" you get from a magazine. FB is not a magazine. It's a photo-album. More specifically, it's a collection of personal photo albums.

It does have some added "features" to the traditional photo album. It comes with tacky, invasively personal display ads in the margin. And it comes with a team of "engineers" looking over your shoulder to log every photo you look at and every comment you make. And it's exposed to viewing by millions of strangers (this is totally unnecessary). I think we can have photo albums without all that cruft. And I think we will.

[snowwrestler]

Facebook made almost a billion dollars in profit last year on gross margins of around 25%. They obviously have a business model and it's obviously working pretty well. Now--could they fail? Of course, but I don't see any reason now that they must fail, based on what we know now.

I find it kind of funny to see the complaints about Facebook's financial future...I'm old enough to remember when Google was a cool new free technology, but no one knew how the heck such a simple search engine was going to make money.

[uncr3ative]

It really isn't "free" entertainment. There are many companies making lots of money (zynga for instance) selling virtual goods on facebook with FB credits. FB gets 30%. I'm not trying to say it's the same amount of money that google makes, but that alone is in the millions of dollars per month of gross profit.