Facebook is experimenting with additional ways to monetize its platform and it’s doing so to signal to Wall Street – in advance of its IPO – that the company is serious about making money.
Last week reports emerged that Facebook is testing a plan to let users pay about two bucks to have their posts rank higher in your feed. This comes at a time that Facebook has been meddling with the newsfeeds, using algorithms of sorts, that are likened to Google’s PageRank, in an effort to show users what Facebook thinks you want to see.
At the same time, as the WSJ this Morning podcast reported last week, businesses are experimenting with methods to give social media power users discounts to recommend deals. For example, a juice maker will take a tiered approach to urging users to share a deal. If they offer a coupon for 10% off for their product, and a power user gets 5 of their friends to share that power user would get 20% off. The more shares the better the deal for the originator.
Put two and two together and you can see the problem. There’s a monetary incentive here for someone to plan to pay Facebook to rank their shares higher in the hopes of getting discounts. Fundamentally, it’s the difference between sharing a good deal because it’s a good deal (that’s called viral) and sharing a deal because you’re benefiting from it (that’s called manipulation).
Sure, I could un-friend or un-follow people that do this – but then the social network will become a medium that separates friends, rather than bring friends together. Mama always said, “Don’t lend money to friends,” and this is prime example of her wisdom. This is the beginning of the Hunger Gamification of social media: it will put friends at odds over money.
I guess it’s true: you can’t make so many friends without making a few enemies.
My newsfeed on Facebook does not need an algorithm. Like most people, I’m perfectly capable of choosing who I’d like to follow and what content I want to see; and preferably in chronological order. Timeline, for example, is a disaster. In my opinion, it’s hard to read and follow for both users and fan page administrators alike. I don’t need Facebook to interpret what it deems I like most, and I certainly don’t want it put me and my friends at odds over money.
Facebook is messing up a good thing.
There’s a lot of criticism over Facebook advertising, which despite the critics can be very effective, and this is why Facebook is moving forward with these tests: it’s got to prove it’s got the potential to grow for its IPO to have a good reception.
But Zuck isn’t helping himself either. Put aside the fact he’s going to maintain a majority stake when the company goes public, which means he’s accountable to no one, he’s chronically late to important events and dresses, well, like a kid.
Google may be a rival – a Hunger Game between giants – but the company did something very important when it went public at $80 a share (it’s now trading at more than $600 per share). It focused.
Facebook too should focus. It should forget experimenting with users desires and focus instead on making its platform the easiest and most effective advertising medium for reaching targeted audiences with relevant content.
And grow up and put on a pair of shoes and a collared shirt for heaven’s sake!
I actually stumbled across this post in search for the phrase "hunger games" so well done on that, so far.
I'm commenting because this is an issue I've been dealing with in my capstone project for graduate schools. How can brands encourage advocacy and deal-sharing between friends without destroying the channel and turning it into simply a place where users beg their friends to purchase something so that they can get a kickback? It's a delicate balance.
Ultimately, I think the point you make about separating friends will occur. People will become sick of the "deal hoards" and unfriend them, the the point where these people won't have anyone to share their deals with.
I go back and forth about Facebook. They made $3.7 billion last year. Not too bad for a kid. They're now saying they think they'll raise $16 billion in the IPO. Not too bad for a kid. It's different than these companies that make no money (cough, Groupon, cough) and are gobbled up for a gazillion dollars. I don't always like the changes Facebook makes, but they're making changes, which keeps them relevant and prohibits smaller, more flexible companies from coming in and beating them.
@ginidietrich Yeah, I hear you Gini. I have a love/hate relationship with Facebook too; and this is a bit of a rant. Like you, I'm a capitalist. Money doesn't grow on trees and everyone want something for nothing. However, every user has put something into Facebook's success: their time and data. Without it, Facebook is worth nothing. I'm for commercialization, with grace, in social media. I worry we're losing the grace. You're co-author wrote something along these lines a few weeks back. In typical fashion, I had a (hopefully intelligent and polite) contrarian view point, but his words still echo in my mind.
Thanks for commenting Gini Dietrich.