Microsoft Embracing Data Portability? Partnerships WIth Facebook, Bebo, Hi5, LinkedIn and Tagged
Bowing to the inevitable, Microsoft took a big step today towards data portability by announcing that Windows Live contacts can now be exported to social networks and other Websites. Its Windows Live Contacts API will works with Facebook, Bebo, Hi5, Taged, and LinkedIn to start. Members of those social networks will be able to import their Windows Live contacts (i.e., their Hotmail address book) so that they can more easily find or invite those people into their social networks. Microsoft is also launching a site, Invite2Messenger, for importing social networking contacts into Windows Live. Right now that only works with Facebook.
Although Microsoft is part of the Data Portability Workgroup, this is a separate effort, confirms a spokesperson. So much for industry standards. But this is an important step in allowing people to take their contacts with them no matter where they reside, whether in their email or social networks. Instead of startups scraping Hotmail to ingest contacts, now they have a legitimate way of doing so.
In a way, this is a bit of a catch-up move. You can already import contacts easily from Gmail into services such as Facebook, Friendfeed and others. Maybe Microsoft had a touch of Gmail envy or were concerned about being left behind. At a certain point, an email service that doesn’t let you export your contacts could really be a damper on your social life elsewhere on the Web.
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Smelling Trouble Behind AOL’s $850 Million Bebo Deal
When AOL bought Bebo for $850 million last week, CEO Randy Falco and COO Ron Grant believed the social network would help save AOL from its downward spiral. Social networks are where pageviews are generated these days, and AOL’s own attempt to turn AOL Instant Messenger into one (via Aim Pages) was a dud on arrival. Bebo, with 22.9 million unique visitors in February and 10.3 billion pageviews (per comScore), was growing and it was for sale. Even though AOL is trying to transform itself into an advertising network, it makes much higher margins on the ads it places on its own pages. The formula for its business is pretty simple: Unique visitors X page views = advertising inventory. If social networks are the future of the Web, AOL needed to own one.
But was Bebo the right one, and did AOL pay too much for it? Those are questions that other AOL executives below Falco and Grant are asking themselves, reports Silicon Alley Insider. The concerns of the senior executives who actually run AOL (and reportedly were not consulted on the top-secret acquisition) include: the general difficulty of making money placing ads on social networks (see Google’s missed quarter), “flattening traffic growth at Bebo” (see chart below), overly-rosy revenue projections for Bebo that might have been three times too high, and the likelihood of losing Bebo’s most talented employees (the founders are already out of there).
From my own sanity-checks with sources, there is definitely the sense that AOL was not Bebo’s first choice. Initially, it was aiming for a valuation above $1 billion. But then the ground started falling out beneath it, and AOL’s $850 million offer started to look real good. AOL was a desperate buyer. Even if it bargained Bebo down on price, it may still have paid too much. Bebo’s growth is indeed flattening relative to other global social networks like Hi5 or Friendster. And while social networks generate a lot of pages, they are not yet particularly valuable pages.
There is a silver lining here, though. If AOL can use its targeted advertising assets (Advertising.com, Quigo, Platform A) to make that Bebo inventory pay out, it will surprise everybody. And that will be good for Platform A because it then will be able to grab more advertising business from other social networks. (That is, if New York State does not outlaw targeted advertising before then). The likelihood of that happening is not great, but AOL employees need at least a glimmer of hope to keep showing up to work every morning. (I do what I can).
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Fubar Grows Over 3 Million Percent In A Year
New social network traffic figures released by Compete show that Fubar, billed as the “first online bar and happy hour” is the fastest growing social network, having increased its traffic by 3,272,217% over the 12 months to the end of February 2008, placing the network at 14th on the list of top 20 social networking sites (chart as shown).
Year on year MySpace hasn’t grown at all, managing to lose 1% of traffic compared to Facebook with 77% growth.
The other big gainers year on year include Ning at 4803% (sneaking in to 20th place) and Twitter with 4368%.
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The Global Race Among Social Networks Heats Up. Keep an Eye on Hi5, Friendster, and Imeem
In the global race to be the top social network, MySpace and Facebook are neck and neck. In January, 2008, MySpace was still the biggest social network worldwide with 109 million unique visitors, according to comScore. But Facebook was close on its heels with 101 million. (Meanwhile, the data in the U.S. for Facebook at least shows a possible slowdown in growth).
While MySpace and Facebook are fighting it out for the top spot, back in the second pack some interesting sprints and scuffles are going on that are worth keeping an eye on. Everyone in that second pack (Hi5, Freindster, Orkut, Bebo, Imeem) are about a third to a quarter the size of the leaders in terms of worldwide unique visitors, so I’ve isolated their performance in the chart above (it is harder to see if you include Nos. 1 and 2, MySpace and Facebook).
In January, both Hi5 (No. 3, in red) and Friendster (No. 4, in blue), made moves to pull away from Google’s Orkut (No. 5, in green) and Bebo (No. 6, in yellow). The latter two maintained a more steady pace. Coming on strong from behind is Imeem (No. 7, in purple), which surpassed Multiply (No. 8, not shown). The chart below has most of the stats, except for the last two—Imeem had 17.8 million global visitors in January, 2008, a 477 percent annual growth rate (Multiply had 17.6 million, a healthy 203 percent rise from the year before).
For Hi5 and Friendster, global growth is a major part of their game plan. Friendster, for instance, which dropped off the radar for most of us in the U.S., is now the single largest social network in Asia. It’s top five countries are the Philippines, Indonesia, Malaysia, the United States (legacy members who never left, plus new growth among Asians here), and Singapore. Friendster has kept its growth going by launching fan profile pages for Asian pop singers, launching four new languages since September (Chinese, Japanese, Korean, and Spanish), and letting developers create apps for its site.
So does that mean that Friendster and Hi5 are worth more than the $1 billion Bebo is rumored to have sold itself for? Not necessarily. It depends on the actual composition of their members, click-through rates, and other financial factors. Generally speaking, advertisers like to target their campaigns by geography, and pay less for ads that target populations with lower per-capita spending power than in the U.S., Japan, or Europe. So not all members are worth the same to advertisers, and thus to potential acquirers. But as social networks become saturated here in the U.S., everyone will have to look overseas to keep growing.
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Sonico: The Biggest Social Networking Site You’ve Probably Never Heard Of
Spanish language social networking site Sonico is the biggest social networking site you’ve probably never heard of before today. If you haven’t you wouldn’t be alone, it has zero hits in Google News as I write this post.
Buenos Aires based Sonico from FNBox launched in August 2007 with the usual social networking mix of message boards, profiles and networks based on school or workplace. Nothing remarkable, until you look at the numbers.
Sonico now has over 8 million registered users, and has recently launched a Portuguese version as well (so as to cover the rest of South America). According to Alexa the site now ranks at 167, and is in the top 50 sites in Colombia, El Salvador, Bolivia, Ecuador, Paraguay, Guatemala, Nicaragua, Peru, Honduras, Panama, Chile, Venezuela, Dominican Republic, Argentina, Cuba and Mexico. 
We can only get the worldwide figures from comScore and although it’s still below the leading second tier social networking sites, it’s still placed extremely well for a site that is just 6 months old.
Targeting the South American market is in vogue at the moment with players such as MySpace and Facebook now offering Spanish language versions, and smaller players such as Wamba trying to get a foot hold in a continent that has a growing online user base. Google’s Orkut is already big in Brazil and Hi5 is also popular locally. If their current growth continues Sonico will be a site to watch.
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Bebo: $1 billion Acquisition “Definitely Happenedâ€
Following up to our post last week talking about a possible acquisition of social network site Bebo: A high level source has told us that Bebo has been in discussions via their investment bank, Allen & Co., with a number of potential buyers, and says that the company signed a deal on Monday to be acquired, with a price tag of $1 billion.
What’s clear is that Bebo, which is the second largest social network in the UK behind Facebook, either signed a deal, or is sending out false messages that they’ve been or are about to be acquired (which is unlikely given Allen & Co.’s involvement).
The buyer is unclear, although we suspect it may be Google given that Bebo fits well with Orkut (very, very small user overlap). Microsoft has been mentioned as another possible candidate, although they seem to have their hands full right now with Yahoo. Other potential buyers, including News Corp. (mentioned in our previous post) and Yahoo, have backed out due to price, from what we’ve heard.
This is far from confirmed at this point, particularly the price, but this is about as strong a rumor as they come.
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Bebo: $1 billion Acquisition “Definitely Happened†Says Source
Following up to our post last week talking about a possible acquisition of social network site Bebo: A high level source has told us that Bebo has been in discussions via their investment bank, Allen & Co., with a number of potential buyers, and says that the company signed a deal on Monday to be acquired. The rumored price is $1 billion.
What’s clear is that Bebo, which is the second largest social network in the UK behind Facebook, either signed a deal, or is sending out false messages that they’ve been or are about to be acquired (which is unlikely given Allen & Co.’s involvement). If misinformation is the goal, we’ve bought it hook, line and sinker.
The buyer is unclear, although we are still betting on Google given that Bebo fits well with Orkut (very, very small user overlap). Microsoft has been mentioned as another possible candidate, although they seem to have their hands full right now with Yahoo. Other potential buyers, including News Corp. (mentioned in our previous post), Yahoo and others, have backed out due to price, from what we’ve heard. There are other potential buyers as well (CBS, Viacom, Comcast, others).
This is far from confirmed at this point, particularly the price, but this is about as strong a rumor as they come.
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Bebo: $1 billion Acquisition “Definitely Happening†Says Source
Following up to our post last week talking about a possible acquisition of social network site Bebo: A high level source has told us that Bebo has been in discussions via their investment bank, Allen & Co., with a number of potential buyers, and says that the company signed a deal on Monday to be acquired. The rumored price is $1 billion.
What’s clear is that Bebo, which is the second largest social network in the UK behind Facebook, either signed a deal, or is sending out false messages that they’ve been or are about to be acquired (which is unlikely given Allen & Co.’s involvement). If misinformation is the goal, we’ve bought it hook, line and sinker.
The buyer is unclear, although we are still betting on Google given that Bebo fits well with Orkut (very, very small user overlap). Microsoft has been mentioned as another possible candidate, although they seem to have their hands full right now with Yahoo. Other potential buyers, including News Corp. (mentioned in our previous post), Yahoo and others, have backed out due to price, from what we’ve heard. There are other potential buyers as well (CBS, Viacom, Comcast, others).
This is far from confirmed at this point, particularly the price, but this is about as strong a rumor as they come.
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Rumor: Is Google About to Buy Bebo For $1 Billion To $1.5 Billion? Or Will it Be MySpace?
An unconfirmed rumor has surfaced that either Google or MySpace is about to announce a big $1 billion to $1.5 billion acquisition in the social space. After checking around with multiple industry sources, we’ve concluded that if the rumor is true the most likely candidate is Bebo, which we are told is shopping itself around again. We put the chances of this rumor being true at a solid 50 percent.
To be clear, there is a long history of rumors surrounding Bebo as an acquisition target that turned out to be false or never panned out. The last one was in May 2007, when Yahoo supposedly wanted to buy it for $1 billion. At a TechCrunch party last summer (before I was working here), Bebo CEO Michael Birch told me that the Yahoo bid was a complete fabrication and the first he heard of it was from his Dad, who called him up after reading about it. When I contacted Birch last night about this latest rumor, he had no comment.
Let’s just go through the logic for each potential buyer, who might be bidding against each other. An acquisition of this size by Google in the face of Microsoft’s bid for Yahoo would show how swift Google can act while its competitors dither. It would also show that what it is really scared of is not a combined Microsoft-Yahoo, but the growing threat from fresh-faced upstart Facebook.
Google already owns Orkut, one of the biggest social networks globally, especially in Latin America. It just has not caught on in the U.S. Bebo is also a global play, but its strength is in English-speaking countries such as the UK, Ireland, Australia, and New Zealand. According to comScore, Bebo had 21 million unique visitors worldwide in December, 2007, with about 4 million in the U.S. Orkut had 25 million worldwide unique visitors. So Google would nearly double its social networking market share, as measured by active members. And it would have a strong English-speaking social network with which to begin to challenge Facebook here in the U.S.
Bebo is already part of Google’s OpenSocial platform, even though it embraced Facebook’s competing platform also. You can bet that Bebo’s Facebook effort would get a bullet in the head pretty quickly if it became part of Google. Still, given Google’s recent earnings shortcomings, which were partly attributed to an inability to make its ads on MySpace pay off, investors might not be so keen to see the search engine double-down on social networking. It is a distraction it can do without.
So what then of MySpace/News Corp.? What does it need Bebo for? It’s 107 million worldwide unique visitors overshadows every other social network out there. But Bebo could help MySpace with its global expansion, particularly in markets like the UK, Ireland, Australia, and New Zealand, where it is weak. Securing the No. 1 spot in each international market is the key to dominating them.
There is also a technology play here for MySpace. Both MySpace and Bebo are adopting OpenSocial as a way to let outside developers create apps for their social networks, so there would be interoperability on that front. But more importantly, Bebo has done a good job of adding the latest features to its site while still keeping it clean of clutter. MySpace could use some of that DNA, and beef up its engineering ranks with a serious Silicon Valley presence. One billion dollars to future-proof its site does not seem like too much to pay.
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What Does MySpace’s Child-Protection Deal Mean for Facebook, Bebo, and Google?
Today’s agreement between MySpace and nearly all the states attorneys general to bulk up protections against sexual predators will no doubt have spillover effects on other social networks as well. No social network can afford to look like it is lagging in this area and will do whatever it can to be at par with emerging industry norms in this area.
In fact, not long after I originally posted about the MySpace deal earlier today, I received the following statement from Facebook:
Facebook has always created an inhospitable environment for predators by limiting access to users’ personal information based on real-world social connections. We have led the way in our partnership with the New York Attorney General and continue our involvement with the Attorneys General of all states and other law enforcement agencies to keep children safe from those who would do them harm. We are happy to work further with the states to develop and deploy strategies to protect kids online.
I am pretty sure that not only Facebook, but also Bebo and Google, will do whatever is necessary to fight sexual predators. With that in mind, here specifically is where Facebook, Bebo and Orkut (i.e., Google) are now lagging MySpace in protections for younger users, and where they may have to spend money to catch up:
1. IMAGE AND VIDEO REVIEW
MySpace proactively reviews videos and images for pornographic and sexually inappropriate content. Humans look at every image and banned images are digitally fingerprinted to prevent them from being uploaded again.
Facebook and Bebo only ban inappropriate images and video that are reported by users. Orkut doesn’t even do that.
2. GROUPS REVIEW
MySpace monitors group discussions for predatory content.
Facebook and Bebo regulate only reported incidents. Orkut does not review group discussions.
3. SEX OFFENDER DATABASE
MySpace helped develop and fund a database of registered sex offenders and deletes the accounts of members who are registered sex ofenders.
Facebook, Bebo, and Orkut do not have a policy of automatically removing registered sex offenders.
4. AGE LIMIT ENFORCEMENT
MySpace algorithmically searches for underage members and deletes their accounts.
Facebook and Bebo are more reactive in their underage account deletion policies. Orkut does not enforce any age limits.
5. “FRIEND” PROTECTION FOR YOUNGER USERS
On MySpace, older users cannot contact underage users without first knowing their e-mail and full name.
On Facebook, Bebo, And Orkut, anyone can “friend” anyone else.
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