HALF MOON BAY, Calif.--Facebook's business playbook takes a page from those of the early dot-coms: build it and then figure out how to make money.
Sheryl Sandberg, the chief operating officer of Facebook, said here in a panel interview Tuesday that Facebook's primary goal is to grow its social network. Second is monetization.
"Our focus is on growth--we believe this is the moment people are joining social networks," Sandberg said here at the Fortune Brainstorm Tech conference, a three-day gathering on technology and media. "Then it's monetization to support that growth."
Her comments were in answer to a question about Facebook's reported $15 billion valuation after Microsoft invested and struck a strategic partnership with the company last year. David Kirkpatrick, a Fortune writer who's working on a book about Facebook, asked about whether the company is feeling pressure from investors to produce revenue and take the company public. Her answer was no.
"We're not public (and we're not feeling that pressure)."
Sandberg joined Facebook in March after six years with Google, where she was vice president of global online sales and operations. At the time, it was a big loss for Google because she oversaw the search giant's advertising engine AdWords. At Facebook, she's founder Mark Zuckerberg's right arm in charge of business operations and developing an economic engine for the company.
She said that after six years in advertising at Google, she believes that there's an "unusual and extraordinary opportunity" for advertising at Facebook. That opportunity is somewhere between major brand advertising like Super Bowl commercials and the direct-response search ads that Google sells.
"This isn't search and it's not monetization of search--that's direct response. We're not trying to compete with direct response," she said. "We do see a huge opportunity in performance and brand marketing. More than 90 percent (of marketing dollars) spent in the world are not in direct, but in brand, and that's (about) generating awareness."
The unusual situation Sandberg spoke of is that Facebook members create and share content with each other. The opportunity is for marketers to insert themselves into that swap of information. For example, she said Facebook helped Mazda run a design contest on the site recently that let members rate new designs from the car company, or create their own. Three hundred people submitted designs to Mazda, and Facebook members voted on the best one.
Fitzpatrick asked if that kind of relationship with marketers can scale enough to justify the company's valuation.
"All of the tools are publicly available--Mazda used groups and pages, and we worked with them to put that together," she said. "We need to do a better job to work with advertisers so that they can use the tools."
Sandberg said her biggest challenge at Facebook is growth, rather than figuring out how to make money. More than half of the site's users are based overseas, and as a result, the company recently launched versions of the site in 18 different foreign languages. She said that overseas usage is accelerating because of it.
Facebook's already in the cat bird's seat when it comes to social network traffic in the United States. According to ComScore, Facebook pulled in 123.9 million unique visitors in May, beating MySpace's 114.6 million visitors that month.
The company is also working on projects to develop Facebook for the enterprise, data portability technology, and settings to help people differentiate types of friends on the site.
And the company is enjoying a fast rate of growth on mobile applications, including the iPhone, she said. She would not say how many people are using Facebook on the iPhone, but she said the company is not yet focused on monetizing mobile traffic. "We're not very far in this. We're focused on that for the site."
Sandberg sloughed off the bubbly notion that Facebook is focusing on "if you build it, they will come."
"We're growing users and we're growing revenue along with it," she said.
HALF MOON BAY, Calif.--At the Fortune Brainstorm 2008 conference here on Monday, David Kirkpatrick asked Jeff Bezos about the origins of Amazon.com's Web Services. "We were building these services for ourselves," Bezos said, when Amazon came up with the idea to "harden the interfaces" between interdependent services. Bezos said the idea was to make interaction between services "coarse-grained instead of fine-grained." Loosening the links between services allowed individual groups to innovate and change without fear of breaking the rest of the Amazon infrastructure.
Jeff Bezos, rocket man.
(Credit: Rafe Needleman / CNET)This concept, Bezos said in response to a question from Kirkpatrick about his space exploration company Blue Origin, does not apply to rockets. "It's harder to get APIs" for rockets, Bezos joked, before getting more serious. You change one variable, and everything else changes. Change your propellant, then you have to change engines, which changes the center of gravity, which takes you back to the drawing board. Bezos said this kind of tight integration is necessary because so many components of a space vehicle are operating at the very edge of their performance. The corollary, of course, is that most Web services are not.
Still, obviously, the "hardened" design of Amazon Web Services is not a panacea. Many of the AWS products went offline Sunday. From the audience, Howard Morgan of First Round Capital opened the topic of regulation for this market, considering how important Web services are becoming to businesses. Morgan compared the Web services market with the regulated electricity market, a comparison Bezos made several times during his talk with Kirkpatrick. But Bezos said that power utilities were regulated since it didn't make sense to run multiple power lines in a city. Web services need to compete on reliability, he said. Perhaps he should put his rocket engineers on the case.
See the rest of our conference coverage here.
HALF MOON BAY, Calif.--At Monday's kickoff discussion at the high-zoot (it's at the Ritz Carlton) Fortune Brainstorm 2008 conference, moderator David Kirkpatrick asks the question, "Is tech making the world a better place?"
Two speakers, Michael Dell and Mark Benioff of Salesforce.com, focused on the changes in business: the Net gives companies a communications conduit with customers. "We put big ears on," Dell said, referring in part to the Digg-like Ideastorm system that Dell is using to gather customer feedback.
Fortune's big thinkers, left to right: David Kirkpatrick, Michael Dell, Gary Hamel, Mark Benioff, Christiane Zu Salm,
(Credit: Rafe Needleman/CNET)Benioff said, with a smile, "Our customers are ganging up on us," and, he said, "our product managers have less to do. The Internet is the great accelerator."
Author Gary Hamel pointed out the flip side of these changes: "The great scandal of management," he said, is that, "most workers are disengaged. The Internet is great at harnessing customers' imaginations more than employees."
Focusing on society more than business, Hamel also said on the panel that the Net is, "empowering people to create like never before in human history. We are emancipating human imagination."
The final panelist, investor Christiane Zu Salm, focused on societal changes: "Technology will change more our society than our business."
I believe the takeaway from this first panel is much about the conflict between old-style management and the power-leveling effect of the Internet. Conceptually, user-generated content services like YouTube, user-edited newstreams like Digg, and user-powered customer support initiatives like Get Satisfaction put customers in charge. As Hamel said, "It's going to make a lot of traditional executives very uncomfortable."
I believe it is already.
See the rest of our conference coverage here.
Whiteboarding tools associated with virtual conference solutions frequently don't offer an easy way to record what's being written down, or distribute it elsewhere after the fact. And for presenting, we're often limited to PowerPoints, video, or audio recordings--or sometimes a hodgepodge of all three at once. Enter Sketchcast, a happy medium between voice and whiteboard recording that the service coins as "Sketchcasts." Users can create their own audio-enriched doodle sessions for all to see, and embed them on blogs or Web sites to distribute their work.
Sketchcast creator Richard Ziade drummed up the idea after finding it cumbersome to spend the time blogging out his ideas, and equated his experiences in meeting rooms, with the potential for blog readership. At least that's the concept, anyway. If Sketchcasting has anything in common with Podcasting (which it does), both require your audience to absorb content in a linear fashion, which is far slower than giving someone several paragraphs of writing that they can peruse at their leisure. There's also the problem of indexing and searching the content, which (for now) is only made possible with tags and user-submitted descriptions.
As a tool, Sketchcast gives users a massive color pallet to choose from, along with an eraser and text tool. All three of the tools can be summoned or dismissed in an instant with keyboard shortcuts, which is a big help to power users. The recording feature is also incredibly simple to use, and can be paused at any time if you need time to draw out your next slide. When finished, the tool gives you the standard smattering of links, including a simple URL, e-mail link, and embed code. Videos are broken down into four categories, including one just for tutorials. The service also is also set up to support user ratings (on a five-star scale), and comments that show up just like they do on YouTube.
I'd definitely recommend giving Sketchcast a spin, if only to play with its editor, which is incredibly simple and fun to use (Ed: It requires registration to use.) As for its worth as a blogging tool, I can only say that preparing a proper Sketchcast takes more of my, and likely more of my reader's, time, which is hardly a suitable replacement for text--as much as it is a complement to whatever is being written. I've embedded an example Sketchcast after the break.
[via TechCrunch]
Related: Live whiteboard collaboration with Scriblink
Make your own voice annotated sketch recordings with Sketcast.
(Credit: CNET Networks)
MindMeister is a "mind mapping" tool that launched last month. If you're unfamiliar with mind mapping, it's somewhere between brainstorming and an organizational chart. If you've ever had to help plan a party or put together an outline for a project, mind mapping is one of the ways to organize and order your thoughts. MindMeister replaces legal pads and crumpled up pieces of paper with an online workspace that can be revised and manipulated. Users can create ideas and connect them to one another, or build their own hierarchies--it's essentially a giant canvas.
Users of Google Docs and Spreadsheets will feel right at home, as the tool shares similar features for versioning, autosave, and collaboration. There's also built-in Skype integration, assuming your collaborators have provided their Skype username. While there's no built-in chat, users can fire up a text or voice chat on Skype by clicking on another collaborator's name.
For users who don't feel like logging in to add a quick idea to their mind map, MindMeister has a few tools that help out. Called "Geistesblitz" (meaning "mind flash"), these tools consist of a widget for OS X and Vista, and a browser extension that installs itself as a search engine in IE and Firefox's search box. When you come across something you feel like writing down, you can just enter it in, and it will be sent to whatever mind map you've chosen as the default.
MindMeister offers two tiers of service--one free, and a paid premium version that runs about $4 per month. The premium version gives users an unlimited amount of mind maps, as well as the option to embed them on blogs and Web sites. I've embedded a sample mind map after the jump.
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