I had the good fortune of being able to attend Facebook’s F8 conference today. While I’ve been quite the Facebook (as a business) fanboy for some time, after today I’m absolutely convinced that with OpenGraph, Facebook has finally exposed the true power of its platform in a way that will help it create incredible value in the coming years. Today’s discussion at F8 didn’t directly touch upon the value of OpenGraph to Facebook, but I believe that the value of the data that Facebook will collect and organize via OpenGraph will allow it to build search and advertising businesses potentially more powerful and sizable than those of Google.
I’ve written before about the importance of data in advertising and the trend towards buying audience rather than impressions. Facebook’s OpenGraph will create the richest user profiles yet, enabling advertisers to target specific audiences based on their friends, Likes, and activity, anywhere that audience can be found on the web. This kind of data and targeting differs from Google’s search-based intent data in that it helps advertisers reach their target consumers earlier in the purchase funnel, enabling what Facebook has called demand generation. This data, combined with the potential of earned media via Facebook and its social plugins, could be the key to shifting billions of dollars in brand advertising spend to the web.
Potentially more important is what I consider to be an entirely new category of search, which I refer to as “subjective search”, that may finally be realized because of OpenGraph data. While Google will likely continue to dominate search for queries where there are objective results, my view is that Facebook will become the default search provider for queries that are subjective in nature. After all, with a graph of my preferences, those of my friends and those of the broader web population, won’t Facebook be in the best position to tell me what Italian restaurant to eat at in Palo Alto, what action movie to see on Friday night or where to go on vacation with my family?
I’m not sure that anyone could have honestly envisioned that we would see another Google-type business in our lifetimes. But by wielding the power of OpenGraph, Facebook could build yet another incredible business based on search and ads. My frequent comment that Facebook will be worth $100 billion sometime this decade has regularly been met with laughter and ridicule. I wonder if that statement will still get the same response after today.
7 thoughts on “Why OpenGraph helps Facebook become a $100 billion company”
Nice comments. In a way I agree, though I am looking now at a decentralized world where the web is the platform to a centralized one. I am not saying that’s a bad thing, per se, just something to watch.
As interesting to me is FB’s continued push to outsource (through the graph APIs) users interactions with its service to publishers and web sites. That’s as radical to me.
I completely agree, I just think that FB’s push to “outsource” interactions was obvious with the launch of Facebook Connect. The product announcements yesterday just make that outsourcing more seamless. The power of OpenGraph data for advertising and search may have been less obvious given they were scarcely mentioned yesterday. There is no question that the decentralized/centralized dynamic will be an interesting one to watch, although I suspect that both are needed to have a web that is more useful and simple for everyone.
Where’s the Like button on this post? 🙂
Hmm. I am a bit divided on the whole Facebook as subjective search platform proposition. There is no doubt in my mind that OpenGraph will end up aggregating an unprecedented amount of personal information about taste, behavior, personality, etc., but I am having a hard time imagining what value users will get out of it.
For whatever reason I just don’t see people submitting these “subjective search” queries. It’s hard to imagine an interface for it that would fit nicely into online community paradigm that is Facebook. People get on Facebook to socialize and keep in touch, which hardly ever translates to posing questions to no one in particular.
The beauty of what Facebook has done is that FB.com doesn’t need to be the search destination. Search queries can be generated from around the web, potentially in varying UIs, but they will all rely on data in the OpenGraph for results. That said, I think that recommendation and Q&A are very natural use cases for FB.com and many of those types of interactions take place there already. So it may not be called search or even presented as search, but the value can still be delivered to consumers via FB.com or its ecosystem partners.
“Facebook’s OpenGraph will create the richest user profiles yet, enabling advertisers to target specific audiences based on their friends, Likes, and activity, anywhere that audience can be found on the web.”
Totally agreed. The Facebook data corpus is probably the most valuable out there. However, the current targeted advertising stack — publishers, networks, exchanges, ad servers — is built to run on cookie-based data. Facebook has shown no interest in integrating into this existing, fragmented stack. To wit, the only way you can buy ads using FB targeting data is via credit card and a self-service web platform platform. No data leaks out, and Facebook has made it difficult for money to get in…..although FB is now opening up an ads API which is interesting.
Just as ad dollars have historically followed audiences across new publications and media channels, dollars will now follow the audience’s data exhaust, which can be used for targeting.
I’m curious whether publishers will be able to leverage FB data for targeting the ads they sell themselves, meaning that FB data will be injected into the existing ad targeting stack. If not, I see FB owning the majority of the display stack, just as Google owns the majority of the search display stack. Then FB could control the flow of information (e.g. bid landscape transparency) as they see fit.
@ Andy/Satya: FB’s outsourced, decentralized/centralized dynamic via their OpenGraph and SocialPlugins Suite is what I like to call “Fragmented Aggregation”.
They are building a bottom-up “Bazaar” to complement/challenge top-down “Cathedrals”.
Add to this the kind of AI decision support and taste graph modeling being developed by the likes of @cdixon and @hunch and this could get way sexy.
Welcome to the age of the Ambient/SynapticWeb!