Dangers of a Walled Garden…

Reading a recent Economist article (The value of friendship) about the announcement last week that Facebook is to float as a public company, and being amazed as ever about how these valuations, err, work, I recalled a couple of observations from a @currybet post about the Guardian Facebook app (“The Guardian’s Facebook app” – Martin Belam at news:rewired). The first related to using Facebook apps to (only partially successfully) capture attention of folk on Facebook and get them to refocus it on the Guardian website:

We knew that 77% of visits to the Guardian from facebook.com only lasted for one page. A good hypothesis for this was that leaving the confines of Facebook to visit another site was an interruption to a Facebook session, rather than a decision to go off and browse another site. We began to wonder what it would be like if you could visit the Guardian whilst still within Facebook, signed in, chatting and sharing with your friends. Within that environment could we show users a selection of other content that would appeal to them, and tempt them to stay with our content a little bit longer, even if they weren’t on our domain.

The second thing that came to mind related to the economic/business models around the app Facebook app itself:

The Guardian Facebook app is a canvas app. That means the bulk of the page is served by us within an iFrame on the Facebook domain. All the revenue from advertising served in that area of the page is ours, and for launch we engaged a sponsor to take the full inventory across the app. Facebook earn the revenue from advertising placed around the edges of the page.

I’m not sure if Facebook runs CPM (cost per thousand) display based ads, where advertisers pay per impression, or follow the Google AdWords model, where advertisers pay per click (PPC), but it got me wondering… A large number of folk on Facebook (and Twitter) share links to third party websites external to Facebook. As Martin Belam points out, the user return rate back to Facebook for folk visiting third party sites from Facebook seems very high – folk seem to follow a link from Facebook, consume that item, return to Facebook. Facebook makes an increasing chunk of its revenue from ads it sells on Facebook.com (though with the amount of furniture and Facebook open graph code it’s getting folk to include on their own websites, it presumably wouldn’t be so hard for them to roll out their own ad network to place ads on third party sites?) so keeping eyeballs on Facebook is presumably in their commercial interest.

In Twitter land, where the VC folk are presumably starting to wonder when the money tap will start to flow, I notice “sponsored tweets” are starting to appear in search results:

Relevance still appears to be quite low, possibly because they haven’t yet got enough ads to cover a wide range of keywords or prompts:

(Personally, if the relevance score was low, I wouldn’t place the ad, or I’d serve an ad tuned to the user, rather than the content, per se…)

Again, with Twitter, a lot of sharing results in users being taken to external sites, from which they quickly return to the Twitter context. Keeping folk in the Twitter context for images and videos through pop-up viewers or embedded content in the client is also a strategy pursued in may Twitter clients.

So here’s the thought, though it’s probably a commercially suicidal one: at the moment, Facebook and Twitter and Google+ all automatically “linkify” URLs (though Google+ also takes the strategy of previewing the first few lines of a single linked to page within a Google+ post). That is, given a URL in a post, they turn it into a link. But what if they turned that linkifier off for a domain, unless a fee was paid to turn it back on. Or what if the linkifier was turned off if the number of clickthrus on links to a particular domain, or page within a domain, exceeded a particular threshold, and could only be turned on again at a metered, CPM rate. (Memories here of different models for getting folk to pay for bandwidth, because what we have here is access to bandwidth out of the immediate Facebook, Twitter or Google+ context).

As a revenue model, the losses associated with irritating users would probably outweigh any revenue benefits, but as a thought experiment, it maybe suggests that we need to start paying more attention to how these large attention-consuming services are increasingly trying to cocoon us in their context (anyone remember AOL, or to a lesser extent Yahoo, or Microsoft?), rather than playing nicely with the rest of the web.

PS Hmmm…”app”. One default interpretation of this is “app on phone”, but “Facebook app” means an app that runs on the Facebook platform… So for any give app, that it is an “app” implies that that particular variant means “software application that runs on a proprietary platform”, which might actually be a combination of hardware and software platforms (e.g. Facebook API and Android phone)???