Facebook: A model for Web 2.0

Logo FacebookWired posted an article yesterday titled “How Mark Zuckerberg Turned Facebook Into the Web’s Hottest Platform.” Author Fred Vogelstein does a great job pointing out some of the key factors that turned Facebook into the Web 2.0 superstar it is today. And it’s still growing. These principles can be applied to any web startup that’s aimed at virtually any flavor of social interaction. Here are the elements that made it happen.

  • Real-world identity. At the start of the web, it was the companies you heard about. The AOLs, the Compuserves, the Netscapes. As the web has evolved, its no longer the companies that are the stars; now its the people: Robert Scoble, Michael Arrington, Mark Cuban, even Zuckerberg himself. With AOL, you were a screen name. Everyone was anonymous. Now, everyone wants to be themselves. Web 2.0 has people publicizing their thoughts on blogs, their photo albums on Flickr, and their bookmarks on del.icio.us. Facebook has capitalized and taken this a step further; now even your relationships between friends and significant others have their public place online. With people putting so much of their personal life onto the internet, its no wonder they want credit for it. Zuckerberg recognized that the value of internet socializing is not restricted to exchanges between faceless screen names in foreign chat rooms, but that people actually want to assume their own identity. Vogelstein writes, “Sites like MySpace practically encouraged users to create new identities and meet and link to people they barely knew. Zuckerberg didn’t care about using the Internet to make new friends. ‘People already have their friends, acquaintances, and business connections,” he explains. “So rather than building new connections, what we are doing is just mapping them out.‘”
  • The beauty of broadcasting. Although the web has always been a collection of information that perpetually updates itself, the way those updates are distributed to users is one of the major changes that Web 2.0 has brought about. Applications like Twitter allow you to notify your network of friends of exactly what you’re doing, thinking or feeling at the press of a button. RSS feeds mean you no longer have to tediously go down your list of bookmarks one by one to see what new information has been posted on your favorite sites; simply sit back and let it all come to you in one easily-managable stream. Facebook adopted this principle the day that they unveiled the “news feed”: now, every time you login to Facebook the first screen you are greeted with tells you all about what your friends have been up to. If they post new photo albums, send each other public comments or join a new group, the news feed will let you know about it by way of an easy to read list that comes off as surprisingly uncluttered. The feed is the key feature that allows anything interesting put on Facebook to do what interesting things in Web 2.0 do best: go viral. So, what’s the most interesting thing on Facebook right now? Actually, there are 3,200 of them with 180 being added per week. Which takes us to…
  • Unlimited functionality. On May 24th, Facebook unveiled their open development system to the rest of the world. This allows anyone to develop applications, or widgets, that can run right out of peoples’ profile. Best of all, as soon as a member adds an application to their page, it gets broadcast to all of their friends via the news feed. Its no wonder that developers have jumped at this opportunity; everyone from independent one man teams to companies with established revenue like LastFM are writing for Zuckerberg’s platform. Basically, if you can think of something you’d like to be able to do on Facebook, it can probably be done… if it isn’t already. Vogelstein writes, “more than 3,200 new applications have sprung up on the site, a number that is growing by about 180 a week. Those offerings have made Facebook a fully functioning social hub, where users can keep track of one another’s favorite music and videos, share and compare movie reviews, and hit one another up for contributions to pet causes.” This doesn’t even include the professional side of Facebook that is growing at a rapid pace: before the app platform, businesses were already sifting through Facebook’s broad member base to find potential applicants and recruit employees (both Microsoft and the CIA have a Facebook presence). Now, companies can use applications to actually generate cash flow from ads or otherwise, with Zuckerberg letting them keep 100% of the revenue (for the moment). With such a flexible platform, literally almost anything is possible.

Regardless of where Facebook and Zuckerberg’s future lead, right now Facebook is a living example of what it means to be at the edge of Web 2.0. And I wouldn’t expect that to change anytime soon.

    But hey, if it does, I’m sure my news feed will let me know.


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    Apple’s stock loses traction after iPhone price cuts

    Steve Jobs’ announcement on Wednesday that Apple is cutting the price of their 8 gigabyte iPhone by $200 to $399 immediately angered early adopters that have already purchased the iPod/phone. News of the price cut and prediction of the backlash hit Wall Street the day before, causing a slide for the company’s stock that continued through today: AAPL is currently down 9% from Tuesday, equating to a market cap loss of $11 billion. In the same announcement, Jobs revealed a new iPod model sharing many UI similarities with the iPhone, including Safari and Wi-fi support.


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    Nirvanix launches out of San Diego

    Nirv2For web-based startups, sometimes too much success can be a bad thing. Sure, you can create and market a great product, but what happens if it really catches on? Unless you have enough servers to keep up, more likely than not your potential customers will find they can’t access what you and your team have worked so hard to create. That translates to lost dollars. Which is where Nirvanix, based out of San Diego, comes in. Nirvanix, which recently received $12M in funding, officially launched their beta service yesterday. From Socaltech:

    Nirvanix said today that it has emerged from stealth, and has unveiled a new business-to-business storage service. Nirvanix said that the new service will provide storage targeted at Web 2.0, media application, service provider, and consumer electronics firms. The new service will be offered as a service to companies. The company is headed by Patrick Harr, former CEO of storage over the Internet provider Streamload (now MediaMax). Nirvanix said the firm’s services are in public beta and will be generally available this month, and will be priced at $0.18 per gigabyte per month of storage and $.18 per gigabyte transferred from the service. The firm’s services are similar to storage services offered by Amazon through its Amazon S3 storage services.


    By contrast, Amazon’s SE service charges the same amount per GB transferred but their prices are slightly less for storage: only $0.15 per GB/month. One thing Nirvanix has that Amazon’s SE doesn’t, however, is a service level agreement guaranteeing 99.9% uptime for the service. No doubt this will be very important to startups attempting to scale their business by relying on an outside storage solution.

    So far Amazon seems to be the only big player in this space; both Google’s rumored G Drive (which may have been scrapped, although they did recently open up extra storage space for a free) and Windows recently-launched SkyDrive do not have B2B functionality.

    You can view a demo of Nirvanix’s service here.
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    Zag: A different way to buy autos

    ZaguseDoesn’t it seem like buying a car is always a hassle? If you’re not skilled in negotiating, you can be assured the auto dealer will take you for as much as possible. Well, a company that was founded in 2005 which is continuing to expand has been attempting to change all of that. Zag, based out of Santa Monica, CA, just received another $13.5M in funding, bringing their total funding to-date to $46M. From the company’s website:

    Zag is a technology and services company that operates a robust auto shopping, research and pricing technology that allows users to get the information and up-front pricing they need in order to be in control of the process and get a great deal. Zag works closely with a select nationwide network of premium dealers that have agreed to provide up-front discounted pricing and a no-hassle delivery process. Zag’s participating dealers have made this special arrangement because Zag works only with large affinity groups and national brands. These organizations do the work of promoting and branding this experience, which removes much of the traditional fear factor from the buying process.


    Zag allows the customer to complete the whole car buying process entirely online, including everything from vehicle selection to financing and insurance. From a Socaltech interview conducted last year with Zag’s founder/CEO Scott Painter, also the former CEO of CarsDirect:

    Is there space in the market for another auto-focused web site?

    Scott Painter: There’s always space for an innovator. Rather than operate as an online consumer destination, however, Zag will initially provide its platform as a private-label turnkey solution to auto dealers and affinity buying groups. Zag will introduce into the market new capabilities for consumers, through its dealer partners and its relationships with affinity groups. For consumers, the Zag platform will deliver the best, most hassle-free car-buying experience possible, with transparency in pricing, full-service financing and the ability to complete the entire transaction online. For dealers, Zag will deliver sales, not just leads - resulting in a much more efficient business model.


    Zag was featured last year in Entrepreneur Magazine’s “Hot 100″ list of fastest growing companies. In its history, the company has received funding from Anthem Ventures, Arcturus Capital, Capital One, GRP, Capricorn Management, and Tech Coast Angels.

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