Yahoo! have been in talks with Facebook for more than a year now and apparently recently got shy at Facebook’s $1 billion asking cost but as I will clarify here Yahoo! have missed out on an absolute bargain.

Facebook have 18 million users, a lot. Having said that MySpace has 100 million + and sold for a mere $580 million to News Corp’s in 2005. YouTube sold to Google for a reported $1.65 billion in 2006 however it serves more than 100 million video’s per day and has more than 25 million visitors a month. So what makes Facebook so valuable? It gets reasonably big traffic levels but not on par with YouTube or MySpace. Regardless of now getting readily available to anybody it started life as an exclusive network for students (you required an educational email to register) and this is nonetheless its primary user group.

funny facebook status. Why Facebook Is Worth Over $10 Billion. 965

So where’s the money?

At present Facebook displays conventional banner advertising on users’ homepages and selected pages through the website. Adverts are unobtrusive and random in so substantially as they’re not targeted at any certain user- they’re just served towards the whole website on a random basis. Facebook are doing ok out of this arrangement on the basis with the number of page impressions they receive, though in reality they’re keeping advertising at a minimum in order to develop up the value with the website for its eventual sale which will just about absolutely take place in 2007/8. Smart guys!

The power of data

Register with Facebook and rapidly you'll be able to uncover your self giving away big volumes of valuable personal details. Consider it… Facebook know your name, they know how old you might be (actually your D.O.B that is infinitely much more beneficial as I’ll go on to explain), they know if you are male or female, they know your hometown, your postcode for those who choose to give it away (while I doubt several users pick this), they know if you’re single, in a relationship (and who with), married, divorced etc, they know your sexual orientation. Ok so you'll be able to answer all these questions as honestly, dishonestly or vaguely as you like but from what I’ve observed people happily give accurate facts about themselves as it’s their pals and potential friends who are going to see it- and no one else suitable?

But what else do Facebook know? Well they know exactly where you went to school, exactly where you function, much more sinisterly your religious and political views. From this we can start off to construct up a pretty useful industry profile. As I’m telling Facebook I may possibly also tell you I’m Male, 22 (born in August), Straight, in a relationship, conservative, atheist from Brighton, England. Went to school at Blatchington Mill Secondary, college at a location known as BHASVIC, University at Bournemouth. From this information and facts we can draw further assumptions- I live in Brighton and based on the location of my schools catchment region we could pretty accurately map places in Brighton I know about, visit, and live in (think Google maps API). I’m a straight; conservative from a reasonably wealthy region in full time employment as a result I’m possibly white, middle class with a decent disposable income.

funny facebook status. Facebook: A Common Social Networking Site. 368

So what else? Facebook know what you appear like, they almost certainly know what you made use of to look like a number of years ago at the same time. Quite possibly most significantly they know who your friends are, they know how you know them, they know after you speak to them, what they look like and ultimately they know exactly the exact same facts about them as they know about you- you’re interests, likes and dislikes and your buddies tastes at the same time.

They know your email address, so they know if you use Hotmail, Yahoo! Mail and so on. They know your phone number so they could fairly quickly function out your telephone provider. They have your IP address so they could work out your ISP. They know where you’ve arrived at the website from so they know what search engine you use (enter Yahoo! And Google to the bidding war), what browser you are on, they know if you are visually impaired or have understanding disabilities from the settings on your browser.

Facebook know when I’m logging in and from exactly where so they know the hours I work, if I’m utilizing the internet at perform, the pages I leave Facebook to go to or the pages I come from so they know what other internet sites I examine. I can set my existing status and tell Facebook precisely what I’m performing or feeling ideal this second.

Ok so you get the picture by now, one last thing although, is your Facebook password the identical as your email account password, your world-wide-web and telephone banking password, every other password you use in your day-to-day life (simply because until I wrote this post mine was!) just how much a lot more details do you would like to give away?

What’s the risk here?

Realistically it’s fairly slim. Facebook are a good bunch of guys and also a terrific website, I enjoy utilizing it and despite realizing what I know about info security as well as the like I opt for to give away a large chunk with the information I’ve talked about here.

Yahoo! And Facebook

So if Yahoo!, Google or god forbid Microsoft effectively obtain Facebook (as I say I’m reasonably confident this will happen this year) the Orwellian lucid dream proposed by this post becomes a perpetual nightmare. Picture a company who have produced billions and dominated the fastest growing market inside the globe by creating algorithms which crawl hundreds of millions of pages of random information and facts (the internet) and categorize that details with all the ultimate aim of matching it to companies and selling advertising.

The search algorithm let loose on Facebook

Envision the search engines let loose on Facebook. An algorithm tuned to choose out profile information and facts (John, born 13.08.84). Map it to key phrases in personal interests i.e. football, Manchester United. Plot your location on a map i.e. Brighton, England. Follow links for your closest buddies with equivalent interests i.e. Bob and Dave who live round the corner and serve me an advert some thing like:

Happy birthday for subsequent week John.

Did you realize its Dave’s birthday the week following?

Why not book tickets for Brighton and Hove Albion vs. Manchester united on 12.08.07

Click here to book now and get three tickets for the cost of 2 (why not ask bob to come along- he supports Brighton and you haven’t spoken in a while).

Book currently and we’ll give you a half cost limo from your home to the game with trashy-limo’s.com.

Now that’s powerful advertising and it’s just about the corner. If Facebook has 25 million registered users by the time it’s sold, half of whom check out each day that’s a minimum 12.five million page impressions a day. Serve the advert above at $1 a click (that is far less than its worth according to the current AdWords CPC model) anticipate a click via rate of up to 10% based on the precise nature of the advertising and that’s $1.2 million minimum a day- practically $½ a billion a year. Grow that user group to 50 million (realistic if Google or Yahoo! can tap into their existing user database) and sell ad space on an affiliate basis say the football tickets at $300 using a 10% affiliate kickback and a 10% conversion rate =$3 per user x 25 million users =$75 million a day or $2737500000 in year 1! OK lets not get carried away individuals aren’t going to invest $300 just about every other day but the logics there and so the money.

Will the audience except it?

Far better top quality advertising means less advertising- much less internet websites rammed with banners so you can’t uncover what you’re looking for, less popups, less low quality merchandise. This can be the main driving force behind the good results of search promoting programs and profile based advertising is already in location with Google’s personalized search returning much more targeted AdWords ads than previously possible. If it falls into the hands of Microsoft then people could possibly be a lot more wary but together with the image of Google or Yahoo! and Facebook profile data is noticed as soft information as the enterprise doesn’t sell you products directly and he service is absolutely free. It’s the way the web is going and I believe it’s exactly where we’ll be in five years.

Identity theft

The point I’ve been generating tediously by means of this post is that we need to be much more cautious about what info we give up and to whom. If the net was a county it would be Nazi Germany and Facebook would be the Gestapo! Social utilities like Facebook are afforded the sort of privileged information fascist governments the world more than would and have killed for. We moan about identity cards being introduced in the UK (ironically there’s various Facebook groups dedicated towards the trigger) but we happily give up private particulars to a bunch of college geeks in the states who are ultimately preparing on selling our particulars towards the highest bidder (the value of any website is according to the volume, top quality and quantity of details they've about their traffic- but most effective of luck to them) possibly to the corporation who already control the majority of world enterprise systems via the windows platform.

This post isn't meant to scare- it’s basically a recognition of the energy of new web technologies, their possibly applications and to pose the question- if your Facebook pals are your real friends shouldn’t they know your birthday? Are Facebook actually going to buy you a present?!