Inside Facebook

When Facebook turned on News Feeds for the first time in September 2006, many users were spooked by the privacy implications of a system that logs and broadcasts your activity to your friends. However, much of the concern quickly subsided – perhaps because it’s worked so well, the system that powers Facebook’s News Feed hasn’t gotten much attention since then. As Facebook engineer Justin Rosenstein remarked this summer,

“News Feed works so well that it’s sometimes easy to forget how sophisticated it is under the covers. If you have a lot of friends, your Facebook home page is displaying only a tiny fraction of what’s going on in your social network. The system that selects the right subset is impressive from both an AI perspective (with a ranking algorithm that uses signals based on user behavior throughout the site) and a systems perspective (efficiently processing 1.2 trillion story candidates every day).”

According to Facebook, News Feed publishes just a little more than 0.2% of the stories it considers. This means that of the 1.2 trillion story candidates Facebook considers every day, only 2.4 billion get published in users’ News Feeds. And on a per user basis, that means each user sees only 60 out of about 30,000 possible story candidates on any given day.

The News Feed Algorithm

How does Facebook decide which ones to show? Of course, Facebook will never publish the weighting algorithms, which are constantly changing. But according to Facebook’s Rosenstein, while the weighting algorithms do apply some general principles (see NFO is the new SEO for tips on optimizing your feed items), they primarily rely on behavior specific to each user.

In fact, Facebook considers nearly every available source of data it has on each user to help calibrate their weights and deliver the best stories:

• Whose profile pages you visit – and how frequently, how recently, and how often
• Who you message, and who messages you
• Whose walls you write on, and who writes on yours
• Who/what you search for
• What’s on your profile
• Who you invite to events and groups, who accepts, and who invites you
• Who you tag in photos, and who tags you
• Which News Feed items you’ve clicked on before

Facebook is able to choose the right 60 News Feed stories for you because, based on your behavior, Facebook knows who and what is important to you.

This is a Big Deal – the News Feed has quietly revolutionized the way information flows across the social graph. The quality at which it subtly functions is truly a landmark technical achievement, and Facebook users vote with their feet: 50% log in every day.

Privacy & Security

Of course, with this amount of personal information, there is always a necessary privacy angle. According to Facebook’s privacy policy, Facebook reserves the right to log everything users do on the site in order to offer “personalized features:”

When you use Facebook, you may set up your personal profile, form relationships, send messages, perform searches and queries, form groups, set up events, add applications, and transmit information through various channels. We collect this information so that we can provide you the service and offer personalized features.

While Facebook offers extensive privacy controls, it doesn’t give users the option to opt out of data collection for personalized features. This means that if you’re a Facebook user, Facebook is keeping tabs on everything you do whether you know it or not. As long as this information is always used properly, Facebook will increasingly be able to provide better features like the News Feed.

However, improper use or distribution of this information could be devastating. (How embarrassing would it be if that crush or co-worker found out how frequently you were viewing their profile?) Facebook has never allowed this to happen on the site (and says it never will). In addition, Facebook has not allowed third party applications (like Trakzor) to log or display this information either (this is possible on MySpace).

However, there were recent rumors that Facebook employees may have abused access to this personal information by emailing personal friends who they discovered had visited their profile page frequently. As Facebook hopes to occupy a trusted space in the lives of tens of millions of people, Facebook needs to establish its trustworthiness on these matters and quickly clean up its act.

Future of News Feed

Ultimately, the News Feed has even more potential to become the Most Important Way Information Spreads Online. Most pressing is the need for News Feed to publish application stories to friends who don’t have the given application installed.

Currently, only the News Feed story that says you’ve added a given application is visible to all of your friends (and it alone generates a meaningful number of installations):

However, once you’ve added the application, stories about your interaction with the app are only visible to your friends who also have the app. While intended to reduce the incentive to News Feed spam, this restriction cripples the News Feed’s ability to help highly engaging applications spread. If Facebook wants to encourage the development of applications that are deeply engaging over long periods of time instead of fly-by-night gimmicks, they should allow these stories to be visible to all your friends.

As other social networking services open their own platforms over the coming year, they will be hard pressed to close the competitive gap Facebook has created with News Feed soon. Within six to nine months, News Feed will have considered over one quadrillion News Feed items on which to tune its algorithms since its launch over a year ago. I just wish News Feed would let me see more of my 30,000 stories a day.

[tags]facebook, news feed, virality, privacy[/tags]

The rumors are true – Facebook has agreed to sell a 1.6% stake in the company to Microsoft for $240 million, valuing the company at a whopping $15 billion. In addition, Microsoft will become Facebook’s exclusive third-party advertising partner and will begin selling Facebook inventory internationally in addition to the US. According to a statement issued by the companies,

“We are pleased to take our Microsoft partnership to the next level,” said Owen Van Natta, Chief Revenue Officer, Facebook. “This relationship will allow Facebook to continue to innovate and grow as a technology company, as well as bring relevant advertising to Facebook’s nearly 50 million active users.”

“Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world, and is a great win for not only for our two companies, but also our collective users and advertisers,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.”

It looks like Microsoft’s president of the Platforms & Services Division Kevin Johnson was able to outbid Google this time around. As a small footnote, in a conference call after the announcement, Facebook declined to confirm or deny the existence of other investors in the round.

Update: Forbes’ Elizabeth Corcoran reports that Facebook indeed took an additional $500M at the same $15B valuation from two undisclosed hedge funds. If true, great move.

[tags]facebook, microsoft, advertising, partnership, investment[/tags]

Update: News.com’s Ina Fried is reporting that Microsoft has beat out Google for a stake in Facebook and an expanded advertising partnership.

[tags]facebook, microsoft, google[/tags]

This just in – today at CTIA, Facebook is announcing Facebook Platform for Mobile. With Facebook Platform for Mobile, current Facebook Platform developers will be able to extend their applications to work on mobile phones and devices as well.

Facebook currently operates a site optimized for most mobile phone browsers at m.facebook.com, and another specifically for iPhones at iphone.facebook.com. In addition, Facebook Mobile allows users to receive Facebook notifications via SMS and upload mobile photos to Facebook directly.

With Facebook Platform for Mobile, Facebook users can opt-in to sending and receiving text messages from Platform applications, and interact with applications on Facebook’s mobile sites. Any phone that can access one of Facebook’s mobile sites will be able to access Platform applications on their mobile phone

Also today, Facebook and Research In Motion (RIM) are announcing the launch of a Facebook application for BlackBerry. Facebook for Blackberry will use the push-based BlackBerry system architecture. More details soon…[tags]facebook, mobile, platform, blackberry[/tags]

The NY Post is reporting this morning that Google and Microsoft are going to do whatever it takes to keep a Facebook stake out of each other’s hands – a bidding war that may drive Facebook’s valuation very high and would certainly be a boon for current Facebook investors (and employees). According to the article,

Microsoft and Google are each vying to take a stake of between 5 percent and 10 percent in Mark Zuckerberg’s social-networking site, with a deal expected to be announced in the next 24 to 48 hours, according to three sources familiar with the situation.

Google, in keeping with its past modus operandi, has been trying to drive the price up to a point that would scare away Microsoft. Running point for the Internet giant in its talks with Facebook is Tim Armstrong, the same executive who helped Google elbow Microsoft out of a deal with AOL similar to the one being talked about with Facebook.

This time around, however, Microsoft is hanging tough, despite recent comments by CEO Steve Ballmer that social-networking sites were “a bit faddish.” One source said the Redmond, Wash.-based company is “willing to give any valuation possible” to keep Facebook away from Google.

Traditionally, Google has demonstrated its willingness to “overpay” (AOL, MySpace) in order to keep competitors out of the game. It sounds like this time Microsoft is more serious. The rumors say to look for an announcement perhaps as early as in the next few days.

Separately, Facebook this week sent bold invitations to Madison Avenue for an announcement on November 6th where Facebook will purportedly announce a new advertising platform that will offer profile-enhanced targeting and targeting based on properties of your personal network of friends, perhaps even off-Facebook, all in a simplified way that advertising executives in New York can manage more effectively.

According to Radar, Facebook has signed up 9 “Landmark Partners” for the announcement, including Condé Nast, Nike, Apple, Sony, General Motors, Coke, CBS, Chase, and Verizon.

Coincidentally or not, November 6th is the day after Google is rumored to announce its upcoming social network plans. We’ll see what happens between now and then.

[tags]facebook, google, microsoft, advertising, investment, agencies[/tags]

SF Beta’s Christian Perry is organizing the SNAP Summit this Friday in San Francisco, “a one-day, single-track conference focused on the Facebook platform.” A great line-up is in place, including:

• Ami Vora, Sr. Platform Manager, Facebook
• Darryl Eaton; Product Manager, Social Media
• Dave McClure, 500 Hats
• Jia Shen; CEO, RockYou
• Joel Seligstein; Facebook Developer
• Justin Smith; InsideFacebook and Watercooler
• Keith Schacht; Developer, Grow-a-Gift
• Lee Lorenzen; CEO, Altura Ventures
• Mark Kantor; Developer, Graffiti
• Mark Mayo; CEO, Joyent
• Matt Marshall; Editor, VentureBeat
• Michael Lazerow; CEO and Founder, Buddy Media
• Murtaza Hussein; Gaming Ventura
• Nick O’Niell, AllFacebook
• Patrick Koppula; Founder and Strategic Advisor, iLike
• Rafe Needleman, Writer & Editor, CNET & Rafe’s Radar
• Robert Scoble, Scobleizer
• Rodney Rumford, FaceReviews
• Steven Polsky; President and COO, Flixster
• Susan Wu, CRV
• Tim O’Shaughnessy, Co-Founder Hungry Machine
• Todd Sawicki; Marketing Advisor, Lookery

I’ll be participating in an afternoon session. If you’d like a ticket for the day, I have a couple to give away. Just shoot me an email!

[tags]facebook, platform, conference[/tags]

A couple of weeks ago (during the Week of Facebook Conferences) I spoke with Rodney Rumford over at FaceReviews, who has posted a video of our conversation. We talked about early trends on the Platform and use cases for business. Check it out!

Please also remember Rodney and his family as they are currently evacuated from their home due to the San Diego fires.

[tags]facebook, business[/tags]

Facebook has unveilved new valuable marketing data to application developers that show which channels inside Facebook lead to the most application installations. While the stats are not perfect, they do provide new insight into how your Facebook users find and add your application.

The new feature, called “Application Adds by Facebook Referrer,” can be accessed from the “More Stats” page for your applications and clicking on the number of adds. Application Adds by Facebook Referrer provides install stats from the following channels:

• Product Directory – how many users found your app in the application directory
• Profile Box Add Link – the standard link Facebook places in the top right of your profile box
• Add Application News Feed Story
• Mini Feed Story
• Facebook Search
• Requests Page
• From within your App – how many users clicked content within your profile box or another canvas page that led them to install your app

Here’s a sample stats page from a friend’s application. While the relative importance of viral channels will depend on your application, the vast majority of this app’s installs (over 80%) come from within the app or the profile box, while very few come from Facebook Search, Mini Feeds, or Requests.

The Product Directory actually drives more installs than I would have thought, though the Add Application News Feed Story drives less than I would have expected.

Kudos to Facebook for providing this first step toward an integrated marketing dashboard for Facebook app developers. This kind of data is extremely valuable as developers seek to optimize their apps to spread inside Facebook.

[tags]facebook,virality,stats,marketing,referrer,dashboard[/tags]

A few weeks ago, SalesForce.com’s Clara Shih and Facebook’s Todd Perry made waves with the release of Faceforce, a SalesForce application that allows SalesForce users to augment their traditional CRM data with Facebook profile information:

With Faceforce Connector for the AppExchange, you can for the first time unleash the power of your personal network on Facebook to build better relationships with customers, colleagues, and business partners… The seamless integration pulls critical Facebook profile information into your Salesforce Account, Lead, and Contact records in real time, providing you with an instant 360º view of customers, prospects, and business associates.

Last week, I spoke with Faceforce co-creator Clara Shih about the project.

IF: Why did you decide to build Faceforce?

CS: After f8, I realized that the lines are completely blurring between the consumer and enterprise worlds. More than ever before, people are working from home, taking care of personal business at work (just ask any Googler who does laundry at the office), and using so-called consumer apps like eBay and Google Maps for business purposes. For many in my generation, work is play. Among my Stanford computer science class, it is the rule not the exception to have a Web 2.0 site on the side or a business idea in the works. Thanks to open web services APIs given to us by pioneers like Marc Benioff and Mark Zuckerberg, it’s fast and easy to build robust Internet applications.

IF: To what extent is Faceforce the result of an official collaboration between Facebook and SalesForce?

CS: Around the time I decided to create Faceforce, I was serendipitously contacted by Todd Perry, a former Stanford classmate who now works as a software engineer for Facebook. He had come across my previous blog entry and wanted to chat. We got together for drinks, I pitched him my idea for Faceforce, and the rest is history. Although we happen to be employees of salesforce.com and Facebook respectively, we used only publicly available APIs to develop Faceforce (though it certainly didn’t hurt that we were knowledgeable about our respective platforms).

IF: Does Faceforce help SalesForce users do their job better?

CS: Faceforce takes two of the most open and innovative web platforms — one focused in the consumer space, one focused on the enterprise — and mashes them up to offer a seamless experience for users. Out of this I think we will see more, better, and longer-lasting business relationships like so many Facebook users are already experiencing in their personal relationships. But this is just the tip of the iceberg. Todd and I are working on another app. I hope and expect other developers will explore this unchartered territory. Five years from now, no enterprise app — CRM, HR, ERP — won’t be integrated with the social graph.

IF: What is the future of SalesForce and social networking?

CS: At salesforce.com, I’ve seen how Internet tools like LinkedIn and Spoke have helped our sales organization win deals and our recruiting department source candidates. The rich profile data and social graph information accessible through the Facebook API seem ideally suited to take this even further. The next generation of CRM won’t be about software. It will be about relationships, and social networking sites by design are 100% about relationships.

[tags]facebook,salesforce,enterprise,crm[/tags]

In an effort to increase Facebook application distribution, Facebook is making the application directory and application about pages indexable by search engines. According to Facebook’s Akhil Wable,

In an effort to continue providing new ways to distribute your applications, we’re making the Application Directory and app “about” pages available to people who are not logged in. We are also enabling these pages to be indexed by search engines like Google, Windows Live, Yahoo!, etc., so that everyone can discover your applications, not just current Facebook users. In addition to containing information about your applications, a large part of why app about pages are useful is because of what users have to say about your app. So, we’ve decided to allow logged out users to read reviews and the discussion board so that they can get a full picture of what an app has to offer…

The goal of this change is to increase visibility for your applications, so users can find applications that they love using, and you can have more potential users trying your applications. You should start seeing your application about pages in web search results in a few days.

This is a nice way for Facebook to increase app adoption and share a little PageRank love with developers.

[tags]facebook,applications,searchable,seo[/tags]