Friday, August 20, 2010

5 Initial Thoughts on Facebook Places

My guess is that I'll be 50% wrong about what I'm about to say in this post... In baseball that's a fantastic batting average. In surgery... not so much.

In case you didn't hear, Facebook made it's foray into the world of location-based services yesterday with it's announcement of Places. If you haven't checked it out yet, it's pretty straightforward. To checkin, you must use the most recent version of the Facebook iPhone app or the iTouch mobile site for Facebook. Although I've discussed the potential negative impact Facebook could have on existing location-based service providers like FourSquare, Gowalla and Whrrl, I'm going to change my tune a little (this is where the 50% wrong part could come into play).

To that end, here are my five initial thoughts about Facebook Places (hat tip to friend and fellow LBS enthusiast, Mike Schneider, for helping push my thinking on this front):

  1. Facebook 'likes' boring - I had an epiphany yesterday after ReadWriteWeb's coverage of the Places announcement yesterday. Facebook doesn't want to crush the players in the location-based field, it wants to provide the scale and infrastructure that they've been sorely lacking. Most telling was RWW's interview with former Facebook engineer, Yishan Wong, who theorized, "My guess is that Facebook's product tries to commoditize the 'boring' parts of location while providing a platform for the 'real' location-oriented companies (e.g. Foursquare, Gowalla, Booyah, Yelp) to build real products off of. Based on what I've heard from various sources, companies like Foursquare find the 'venue management' business to be quite tedious and not the real source of differentiating value... so commoditizing this aspect of their business doesn't threaten their core value proposition."
  2. Businesses will seize the opportunity - It took all of 24 hours before all-in-one checkin rewards  site, Topguest, announced that it was including Facebook Places in its service. It won't take long before others follow suit. The potential access to 500 million members/eyeballs/customers will do that.
  3. Places appeals to the masses, not the early adopters - Mike Schneider and I were going back and forth earlier on Twitter about how disappointed he was in the lack of innovation on Places. My Quick'n'Dirty podcast partner, Jennifer Leggio, and I had a similar conversation yesterday on our weekly show. My take is that Facebook intentionally didn't include any sexy new features for two reasons a) they want to appeal to the masses so keeping the UI and functionality as simple as possible was essential and b) if bullet number one above is correct, Facebook wants other LBS players to do the innovating while it does its LBS platform thing.
  4. Facebook will make a killing in geo-targeted ad revenue IF Places takes off - I may hate ads, but the more relevant and geo-focused they are, the more inclined I will be to react to them. Check out eMarketer's post yesterday for more details on this topic including forecasts.
  5. Places will create a privacy nightmare for Facebook - I bet you thought I was going to yadda yadda over this one. Nope. This is the thing that could make or break Places. The major sticking point being the ability to check people into a location. While I personally like this feature in theory (and it is unique to Facebook as far as I can tell), this will cause plenty of problems down the road. It will only take 1-2 times of someone being checked into a location that you either don't want to be checked into or weren't actually at... but by the time your friend/parent/significant other sees the update, it will be too late.
How about you? I'm sure I'll get some push back on some of my predictions. But you know me, I welcome the discussion!


  1. Privacy could be a nightmare, but this is the method that FB has used on every feature it has rolled out (start out as liberal as possible and instruct how to adjust privacy AND if it gets bad enough Zuckerberg will come out with an apology blog).

    Regarding Foursquare and Gowalla, I personally think they'll eventually go away (or get consumed by FB). FB will drive the adoption of LBS now and Foursquare and Gowalla will be left to the early adopters and us geeks for now. Sad, but true IMHO.

  2. David - Wow, thanks man. I have a feeling that your going to be the least argumentative out of anyone that comments. ;)

  3. Aaron
    As always good post. Places is, so far, exactly what I expected from Facebook and why I've been telling people not to worry about them in Location. It's just not what people joined Facebook for, it's a half-assed attempt at doing location and like everything so far that Facebook has done that is even vaguely off property is not well thought through.
    Google has done the same pretty much with Latitude sure it has a check-in ability, sure I can see my network on a map, but honestly that is so 2008. Loopt does that and little else so do some of the other early tools. However, when you look at platforms like SCVNGR who have already moved the space beyond the check-in you have to wonder at why Facebook is basically starting at the same entry point the others did two years ago.
    I didn't expect innovation from Facebook but I would like to have seen them through a little more at it than they have. So far, there are no rewards for the user, little or no integration opportunities for businesses. While they do have API support for it, Places does so little that it really is just an additional data point for profile information. Which is of course what Facebook is all about, building more complete data for their social graph so that they can eventually sell it or at least license it in some way.
    I definitely agree with your prediction that the way they monetize this will be through location aware ads. Which is a shame because rather than progressing the space, which they have the built in scale to do they are in fact retarding the growth and direction in which social location sharing could develop.

  4. The ability of a friend to check me in at Liquor Barn all week (not that I haven't been there) just as a joke would be the issue I see taking off.

    I agree with David above that you are spot on with this analysis

  5. Discovered another flaw. When I went to check in this morning (at the home office), I said no to the request to use location since I wasn't sure if that would automatically check me in and I never check in to Foursquare, Tweet with Location, etc from the home office. Well, now it looks like I can't use Places. It says I need to enable location. However, when I go to settings in the iPhone App -- enabling location is not an option. Checked online settings while updating privacy settings (I don't want someone else to be able to check me in) but no options there either. Hopefully they will update the app soon to allow me to turn this back on. Most apps I use ask me each time I launch it if I will allow them to use my location, so I'm not sure why Facebook isn't responding this way. Oh well, I guess I will stick with Foursquare. I wasn't going to abandon Foursquare anyway since some check ins I post to Twitter, others to Facebook, very few both, and some just to 4SQ.

  6. @DaveS - you're probably right on that front. and so far, the "start liberal/tighten up over time" seems to have mostly worked for Zuckerberg et al. An interesting tidbit, upon the announcement of Places, FourSquare registrations went through the roof. It will be interesting to see how this plays out.

    @Simon - I really appreciate your swinging by to comment as you know I highly respect your opinion on anything LBS related. I am going to slightly disagree with you on the comparison to Google Latitude, the reason being that most people don't interact with Google in a social way, nor do they actively participate in Google but rather passively peck at it in a variety of different ways (gmail, docs, search). As for your point about not adding more functionality, MAYBE this was a missed opportunity... but again, if they want to be the platform rather than the innovator, they actually wanted to do just enough to gain some traction but not enough to piss off (or scare) the other LBS players. I look forward to talking about this with you and @ScheiderMike at the next couple of LBS conferences.

    @Mandiggingahole - trust me, there will be plenty of the "me checking friends into Liquor Barn" shenanigans over the coming weeks. Actually, my man, Kyle Flaherty, checked me into several establishments yesterday in DC (and I'm in Austin, TX). Oy.

  7. @TamaraG - go to settings >> general >> location services >> facebook (select on).

  8. What's the 50% you think you might be WRONG about?

  9. @Aaron I got into the act by "faking" a check-in as you and Melanie were dining. Expecting to see more of these shenanigans as well!

    Places feel just about right to me at this point--providing the platform so that third parties can innovate on top of it.

    What I do worry about, though, is that if Places DOES take off, check-ins will start littering all our News Feeds. In the same way that I don't want to see a bunch of imported tweets or Mafia Wars updates (even if they did blow up a truck, which sounded kinda cool) I don't want to see all those check-ins. Only in small doses, and probably only from handful of my friends.

  10. Todd - the 50% is about the fact that Facebook is serious about doing the boring stuff and acting as the LBS platform (vs. the innovation engine). I hadn't thought of them serving in that capacity before. Since it was based on the conjecture of a former Facebook engineer, I may be out on a limb. ;)

  11. @Bryan yes, many more shenanigans to come! Regarding the "litter" the Places checkins may cause, I too am concerned about that. I think the current frenzy will abate some but it could be a real concern. It may need to take it's own place (kind of like the IM functionality does) on the screen so it's not constantly interrupting the newsfeed.

  12. Regarding the kitty litter of LBS hitting the FB stream...very true, but I think that just becomes a case of curation and FB tweaking some algorithmic properties.

    I do think Places will finally allow the mainstream to enter into LBS. Tip of the hat to Foursquare, Gowalla and others for pushing FB to do something about LBS. However, if I was a VC and funding Gowalla or Foursquare I would be pissed. Pissed that I didn't sell to Yahoo or Facebook or someone when I had the chance. There is NO way someone will purchase those guys for any sort of big money. I just don't see it happening. I can't believe there were supposedly M&A talks in previous months and $100MM in valuation was mentioned for Foursquare. That's insane. Literally the 800 lbs gorilla (FB) shook its fist and turned all of these first to market LBS platforms into 3rd party peons overnight. You might as well call yourself Tweetdeck or Tweetie etc and make a quick sell to FB for a few bucks while you can.

    Nice article.


  13. Jonathan - i agree. Places checkins flooding peoples' streams will sort itself out. I also agree that if 4SQ, Gowalla et al. should have sold 3-4 months ago if they wanted the big bucks. That's not to say that they can't work their way back into a big payday... but it's going to take a year or two to do so. And there's no guarantee that they'll ever be worth more than $10-15 million (vs. $100M+).

    Thanks for stopping by.

  14. Nice post Aaron, thanks for giving us a place to discuss Places!

    IMHO, Zukerberg has played his position well with a subtle, but strong move in the location-based services (LBS) market place. The release of Places with limited functionality is an olive branch and warning to potential competitors, as well as, a reflection of a fiscally responsible iterative development process (Release a basic application, deploy, test, evaluate and improve, then repeat. Over a year or two the best ideas will percolate to the top. Rather than building a big expensive feature rich application that nobody wants, a la Microsoft).

    The olive branch is the API, where Facebook has given a clear path to the current leaders in the LBS market of how to work with Facebook. Notice how Facebook was careful, not to launch any functionality that competes with the core mechanics of 4sq, Gowalla or Yelp. They are courting them to get on board, saying we can all make more money together.

    The stick, is the Places location database. Facebook is saying we will eventually be in control, and you better be on our good side. The other stick being held behind their back, is the hoard of start-ups and large brands that will now have an easier time getting into the LBS space. This will slowly chip away at all but the best of business models in the LBS space, Game On! Above anything, this is what would keep me up at night if I was Dennis Crowley or Josh Williams. (Notice I did not mention Yelp here.)

    The best innovation Places brings to the LBS space is the "like" button when you check-in. This is genius, because it give the business owners a way to talk to their customers. Once you "like" a business, relevant messages can show up in your news feed. This is huge.

    The ability to tag someone else, is just as much about PR, as it is about innovating and adding usefulness. The usefulness is connecting more people and experiences with real world places, as well as adding the other person's social graph to the feed. This increases distribution for the business owner of the Place. On the PR side, Zuckerberg has learned if he does something that is controversial in the privacy space, the media will jump all over him. Next thing you know ABC, CBS, NBC, Fox and CNN are all covering Facebook Places; and the mass market that would never know this functionality existed will be checking out the service. Then, Zuckerberg will apologize and offer some new setting to "protect" everyone, knowing that his user base is way too vested in the service to quit. In the meantime, he just got $50M in free advertising for Places. Thanks, is it really that easy!

    Mark Zuckerberg, my come off sometimes looking like a deer in the headlights, and we know, he is not a naturally gifted speaker, but he has a clear vision for his company and he is a very smart and shrewd businessman.

  15. Aaron, beyond the pranks being played with Places I'm actually a big fan overall. It is simple, which is the key to its elegance as you state. For the majority of Facebook users they have no idea what "LBS" stands for and still think FourSquare is a child's recess game. But now I'm seeing most of the folks I know on Facebook at least checking it out.

    Facebook Places offers up a huge opportunity for businesses to get in on the LBS game and now with a much larger audience.

    My only wish is that they hadn't, again, been so sketchy with their default opt-in process.


  16. I'm way behind on this post, and I'm sure you've already seen this article from Consumerist floating around, but since I hadn't seen it linked above, a little gem about how to disable people from checking you in.

  17. @Conrad - really great points. I hadn't thought about the "like" button but you're right, that could be huge.
    @Kyle - agreed on all fronts.
    @Sydney - thanks. just went in and disabled my "allow friends to check you in" functionality in light of my impending trip to NYC.

  18. Aaron your points are well taken. I can see the logic particularly in points 1 and 4, but #4 cannot happen as of right now. (see my last point below, which I called out with STROUTISAWESOME)

    Places is disjointed. It's separated from the rest of the experience. At the very least they should have integrated pictures and video.

    As this story is playing out, it is making me wonder if Facebook knows why they need to be in location.

    They did not listen to marketers or businesses who want to market using technology. They employed no leapfrog strategy. No self service model.

    STROUTISAWESOME - My biggest problem is that they haven't done anything to get the word out to the masses. Sure, nerds, geeks, spazzes, dweebs, dorks and tools like us were all over the announcement. What about the other 499,998,000 people? We already knew what it was and how we should put it to use. The mainstream iPhone users isn't updating their apps every day like we are. Hell most of them don't even had iPhones so I would wager the lion's share haven't even discovered Places yet.

    Google Buzz actually did a pretty good thing when they took us to a landing page that explained Buzz the first time we clicked on Buzz. Facebook could do a series of blog posts / videos that explains Places and why people should check in (though I'm certain they don't know, they could pay us to do the videos). They should do an above-status takeover that alerts users to the presence of Places and redirects them to the landing page. They could measure the effectiveness of this campaign in clicks and check ins.

    I'm disappointed that the leader in social networking is becoming a slow moving, amorphous blob of whoknowswhatedness (I made that word up). Does anyone write software with a revenue model in mind anymore?

  19. Mike - I'm glad you didn't just leave a big "your post is shit" comment here. ;)

    Seriously though, I do see your point. And I actually am in 200% agreement with you that Facebook could be doing a much better job in getting the word out to non-LBS users.

    With that said, I am going to cut Facebook some slack here because I do firmly believe that there is a method to their madness. But with that said, I did caveat up front that I might be 50% (or more) wrong with this post. Only time will tell which one of us is right (and to that end, I'm happy to be wrong).

    Thanks for coming by and leaving such a thoughtful comment.


  20. Great post, Aaron.

    This is a spectacular move by Facebook to crowdsource a wide range of locations -- not just businesses.

    Will disagree with you a bit on #5 though -- when have people cared about privacy for more than a week or two?

    Chris Treadaway

  21. Places is going to be huge. People were already posting where they are and what they are doing on Facebook without the addition of the feature.

    The big wave is coming when Zynga rolls out Places integration with Farmville, Mafia Wars and whatever other crack-like social game for the masses.

  22. Chris - glad you liked the post and mostly agree with me (batting .800 with you which is pretty good). Regarding privacy, normally I'd agree with you. The problem is, this has the potential to get messy, quickly. I speak from personal experience as FourSquare has created some "interesting" (and not in a good way) situations for me over the last few months.

    This may or may not effect change on Facebook but I'm telling you that if it bothers me (and I'm relatively relaxed when it comes to privacy) it will definitely bother others. ;)

  23. This is a brilliant discussion of another one of those "every time the 900 lb Gorilla scratches its butt, everyone goes 'OH NOES!'" moments.

    Most amazing to me is that if it weren't for the fact that I pay attention to what is being said in the blogosphere and on Twitter, I would have never known FB had turned Places on. I don't see any difference in my feeds or my profile. There was no splashy self promoting "Hey we're making YOUR Facebook experience BETTER!" screen on login. No advert in the sidebar teling me about Places' better than sliced bread features. So what does this mean?

    I think it means that FB is building a backbone (as others have suggested) for all other 3rd parties to overlay on. Once a few interesting ones float to the top of the usability/popularity heap, FB will swoop in, buy that company out and slap their name on it with the promise it will be available for all and made better too!

    Shrewd, yet typical. Still, I admire FB's ability to remain consistent in how they simply let the crowd build and decide on what is going to work and stay. By and large, FB has always been a talking platform with all these outside hooks allowing most anyone to come in, drop on a new layer/tool and let the community decide on whether it stays. Rather Roman of them. Build the Colosseum and let the audience decide on weather something lives or dies. ;)

    Awesome topic Aaron!

  24. Thanks Darin. Nice connection between the Roman Empire/Colosseum/Facebook - maybe a first. ;)

  25. Great Post Aaron! Going to get a Millennial to pipe in since everyone brags they are the ones who behave differently. Great post Aaron and look at all the Stroutmeister Blog engagement!

    When I am able to send you the new Fortune article on Google this will make more sense. But basically just because you crush one niche doesn't not guarantee other niches. Google is struggling to find a second home run.

    The question for Facebook is does LBS fall under its competitive advantage or not. We will have to see. They are good at connecting people online or hosting social games even if the UX kind of sucks. They know SO MUCH about all of us and yet have failed at digital advertising. I know you mentioned tailored local/mobile Aaron if Facebook couldn't solve digital targeting with all the info they have....

    And lastly it amazes me that Facebook opts everyone in basically and makes you opt-out. They do this continually vs a pop up screen guiding you to choose things when they release a new feature. I think they are pushing the mistrust so far that I see a mega crash brewing. No reason a network couldn't catch fire tomorrow and toast FB in 6 months. (Meaning gain users so fast FB stalls crushing their potential valuation).

    The other question is what percentage of people want to expose themselves in this way. And is it true the younger generation doesn't care about privacy.