jjprojects: our social web » Facebook

“Great vampire squid” wraps itself around The Social Network.

John Johnston — Wed, 05 Jan 2011 02:21:53 +0000

I’ve wondered when this day would come. The start of a new decade is a fitting time I suppose. New decade. New blood.

On reading the news that Goldman Sachs has led a huge new investment in Facebook, I couldn’t help but recall with some amusement Matt Taibbi’s Rolling Stone article The Great American Bubble Machine, from April last year.

This rollicking take-down investigates how Goldman Sachs has helped engineer every major market manipulation since the Great Depression, including the tech stock bubble of the 1990s, the “housing craze” that lead to the global financial meltdown, the $4 a gallon petrol (or gas in American) bubble, and rigging the financial crisis bailout. The world’s most powerful investment bank is harshly described as:

a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Can you see why, after recalling this article, I seem to have this mental image of a vampire squid wrapped around a big, blue ‘F’?

Goldman Sachs seems to have been just about everywhere within capitalism, including ‘dot com’, ‘web 1.0′ IPOs leading up to the tech wreck, and now, it’s into ‘web 2.0′, social media.

With that in mind, here’s another harsh evaluation of the bank’s (and government’s) long history from said vampire squid article:

The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again

If you agree to any degree with this assessment, does that mean social media is about to be subjected to this? If you don’t, it’s all fine and dandy. I guess we’ll just have to wait and see what happens. I’ll reserve my judgment for later, because I’m not as cynical as you lot.

Any any case, let’s take a quick look at what has just happened with the Goldman Sachs/Facebook deal.

Facebook has just raised $475 million from Goldman Sachs.
In addition, the company intends to raise another $1.5 billion through a “special purpose vehicle” that Goldman Sachs will be initiating, to let its clients indirectly invest in Facebook.
The private sales would value Facebook at around $50 billion.
The minimum investment from clients is expected to be about $2 million.
Goldman’s offering of Facebook shares will surely be watched closely on Wall Street, as it could set an example for other private companies (who don’t wish to go public but still raise a lot of money) to do a similar thing.
A potential investor has said that Goldman is taking about 4.5 percent fee from the money invested into the fund.
By using Goldman’s “special purpose vehicle“, Facebook will avoid having its financial information disclosed to the SEC and published publicly. Its competitors won’t know the details of its earnings.
Using the “special vehicle”, Facebook still gets around $2 billion to use, without going over the 500 shareholder limit for disclosure, by having Goldman Sachs represent the investors on their behalf. Did someone say loophole?
The SEC may intervene and rule that the “special purpose vehicle” circumvents the Securities Exchange Act and require Facebook to then report its earnings.
It so happens that the SEC just last month began an inquiry into the surge of trading shares of privately held Internet companies.
As Mashable points out, if Facebook is required to eventually report it’s earnings, why would it not then just go for an IPO, after of course growing quite a lot more in the meantime?
Goldman Sachs is in the prime position to lead the lucrative IPO, whenever that occurs. Big fees.
As Dealbook points out, an eventual IPO would also unlock CEO Mark Zuckerberg’s huge paper wealth, which Goldman Sachs, as a lead Facebook investor, would have a “leg up” in the assignment of managing post IPO.
No doubt Twitter and other social media companies, and their investors, will be watching this whole developing situation with interest.

Is social media being used to manipulate financial markets?

John Johnston — Tue, 14 Dec 2010 00:38:45 +0000

In India, the financial regulator, SEBI (Securities and Exchange Board of India), is planning to use a new suite of software tools to analyse conversations about financial markets in social media.

The software will analyse networks such as Facebook and Twitter, as well as blogs and more traditional social media such as forums. It is thought that some people may be using social media to try to manipulate markets. There has been a sudden rise in the number of cases of alleged manipulation.

SEBI has warned investors against websites offering stock tips, adding that people may expose themselves to undue risk by using unconfirmed information on websites and in social media.

I wonder if the use of such software by regulators to monitor conversations about financial markets and specific stocks will catch on in other countries too?

via The Economic Times

Twitter and Facebook have not abandoned Wikileaks, yet.

John Johnston — Thu, 09 Dec 2010 00:50:12 +0000

Amazon Web Services, PayPal, Visa, Mastercard, its DNS server and its Swiss bank account have all abandoned Wikileaks, presumably after Senator Joe Lieberman called on corporations to stop doing business with Wikileaks. However, two notable outlets for the organisation’s communications still appear to be accessible as I write this post: Facebook and Twitter.

Are Twitter and Facebook going to shut down the Wikileaks accounts? It appears not, well at least not yet. ReadWriteWeb reported that Facebook has made the decision to keep Wikileaks’ Facebook page live. Andrew Noyes, Facebook’s Manager of Public Policy Communications is quoted as saying:

The Wikileaks Facebook Page does not violate our content standards nor have we encountered any material posted on the page that violates our policies.

Facebook also asserted that it hasn’t received any official requests to disable the Wikileaks page (as of the writing of that post), or any notification that the articles posted on the page contain any unlawful content. They also maintain that they are continuing to monitor the situation. This seems to imply that if Wikileaks is found to be breaking the law, Facebook might change its mind.

Twitter has also said that it is not censoring Wikileaks from ‘Trending Topics’, after it was questioned by reporters and users on the issue. Twitter was suspected of removing the hashtags #wikileaks and #cablegate after the heavily used tags were no longer trending.

So despite taking a number of serious hits over the past couple of days, including the arrest of Wikileaks founder Julian Assange in London on sexual assault charges, Wikileaks is still able to communicate via social media.

Additionally, to make it very difficult indeed to remove Wikileaks from the Internet, with the aid of many supporters, multiple (1289 at the time of writing) mirrors of Wikileaks have been set up.

Do you think Wikileaks’ social media accounts will eventually be disabled, if it’s found that any laws have been broken by the organisation?

Facebook co-founder launches Jumo, a social network for activism.

John Johnston — Wed, 01 Dec 2010 00:48:21 +0000

Jumo is a new social network I’m certainly going to be keeping an eye on. That’s not easy to do at the moment. Because of all the initial interest, no doubt generated by the significant amount of launch coverage, I understand they are having a few initial problems.

Not such a bad situation to be in really, although a new network started by Facebook co-founder and Obama campaign director of online organizing, Chris Hughes, was always going to get a lot of attention. So far I have managed to create an account, log in, and have an initial poke around.

The idea behind Jumo is to let us find, follow and support causes that are the most important to us – a social network for social activism. Apparently there are already around 3,500 organizations signed up. No doubt many more will join in. Jumo is a also not–for–profit venture itself.

I’m not going to give any sort of review just yet, as it seems way too soon. I haven’t had a chance to properly suss it out. Will you join me in checking it out? Jumo just requires you to connect your Facebook account when you sign up.

Web creator Tim Berners–Lee criticizes “some of its most successful inhabitants”.

John Johnston — Wed, 24 Nov 2010 12:16:45 +0000

In a comprehensive new article, Tim Berners–Lee calls for vigilance in maintaining open web standards and neutrality. He asserts that the egalitarian principles the web was founded on 2o years ago, are being threatened in different ways by “some of its most successful inhabitants”. He criticizes the likes of Facebook, Apple, Google, Verizon, some ISPs, even Twitter and Linkedin for various dubious and potentially dubious activities.

He asserts that the walling off of information from the rest of the web by large social networks (such as Facebook) threatens the web’s established universality and decentralization. He points out that large social networks such and Twitter and Linkedin capture users’ (voluntarily offered) data and assemble excellent databases, and then reuse this information to provide a value added service. However, this only happens within their walls, which segments off information and threatens the decentralized nature of the Web. Once we enter our data into one of these networks, it can’t easily be used by us on another site or network. The pages are on the web, but the data are not.

Not such a big deal you say? The stated threat is that the more this kind of structure spreads, the more the web becomes fragmented and the less it becomes a universally accessible information space. Another threat is that any one social network, search engine or web browser could get big and powerful enough to become a monopoly; of course Google and increasingly Facebook spring to mind here.

He also points out that some cable tv companies that provide connectivity are considering the possibility of limiting users to only their content mix. Some wireless internet providers are being tempted to slow traffic to sites which have not made deals with them, and governments both totalitarian and democratic, are monitoring people’s online habits, infringing human rights. My previous post, A year in a labour camp for one retweet!, is a shocking example of these very activities in action.

In terms of lack of openness and centralization, he singles out Apple’s iTunes system, which uses the proprietary “itunes” instead of the standard “http” to locate content. You can only access iTunes using Apple’s propietary iTunes application. You are no longer on the web, it’s walled off. It’s a single shop rather than an open marketplace, controlled by one large company. On a related side note, only today I was looking around for a particular audio book. It turned out that it was $32.99 on iTunes, and $10.47 elsewhere, for the same book.

Yet another development he finds disturbing because it’s off the web, is magazines and newspapers (for example) starting to create smartphone–only apps rather than web apps. You can’t bookmark pages within them or email a page link within an app. You can’t tweet out a page link from an app, without others having the app. He believes it’s better to build web apps that run on smartphone browsers. This may not seem like such a big deal, but if it turns out that one company, one walled garden, has too tight of a hold on the market, it could slow innovation, or worse.

Berners–Lee maintains that if these and other trends continue unchecked, the Web could be “broken into fragmented islands”. The freedom to connect to whichever sites we want could be lost, and this will extend to mobiles devices too. He points out that the web is a critical democracy, one that “makes possible a continuous worldwide conversation.” This could become more fragmented.

There is real food for thought in this article and I encourage you to read the whole thing, as I’ve only touched on some of the issues he mentions. It’s really worth reading when you have time. He makes some excellent points in relation to why we should care about all this. The web is ours. It’s a public resource on which we are coming to depend on more and more, for so many things.

Should we let the web become fragmented, and monopolized by a few big and powerful companies? Should we let governments chip away at our liberty by monitoring and filtering? Do we even have any power to stop these things happening if we want to?

Take Facebook – many people are aware of the walled-garden nature of Facebook, yet it’s grown to over 500 million users and doesn’t look like slowing down. Facebook is starting to make substantial revenue from its walled garden too. It’s a big company now.

Google has become a huge and profitable company is such a short time. It’s continually expanding its operations into new areas with some astonishing technology, while still making the vast majority of its money from advertising. It all seems to unfold before we realize what’s happening and can think of all the possible ramifications. It so often seems to be the case with new technology. We take the good with not so good, because the good seems to outweigh the not so good.

If there are significant dangers, perhaps we are safe in the knowledge that we can collectively change things if we really want to. For instance, at some point, if people decide to leave Facebook en masse, that would be it for Facebook. If Google steps over the line towards the opposite of “Don’t be evil”, we can always stop using Google. If something else that seems better comes along, we’ll start using it. We seem to be fickle like that when it comes to the web.

Is the future of eBooks social?

John Johnston — Wed, 17 Nov 2010 02:52:23 +0000

With the recent proliferation of eReaders, it must be worth asking the question: is the future of eBooks and eReading social? After all, these devices are connected to the web, where our online social networks are.

It seems to make sense that the next step would be to share thoughts and examples of what is being read. I already share many thoughts on social networks about what I’m reading at any given time. I’m sure many people do.

As a beginning, it may be worth noting that Amazon already displays such things as the ‘Most Highlighted Passages of All Time’ and ‘Heavily Highlighted Recently’, from the new social highlighting feature of kindle books.

In terms of social eReading, here are a few other possibilities, as recently suggested by Kevin Rose. And let’s face it, most of these will probably happen soon enough in one form or another:

Friend annotations – highlighting paragraphs and leaving voice annotations for friends. (As I said above, Amazon has already implemented part of this).
Lend a book to a friend by hitting a button and choosing a friend to lend to.
Seeing how far friends are into the same book you are reading.
Virtual book clubs – seeing who out of your Facebook and Twitter friends is reading the same book, so you can discuss it with them.

I don’t know about you but virtual book clubs seem to make a lot of sense to me, considering how popular they have been offline over the years. It seems like these would work pretty well online, in connection with eBooks. This is even something smaller, independent book sellers could start, or host, as a way to help compete with the big online retailers.

Academic Joshua Tucker has also pointed out some of the benefits and possible pitfalls of social eReading. On discovering the Amazon social highlighting feature by surprise, what disturbed him was that he could not find a way to opt out of sharing his own highlights.

The issue of privacy is one that may disturb some people, and will not bother others at all. As Tucker points out, now Amazon knows what books you have downloaded, they know which passages of the book you find interesting and can make recommendations on what you might be interested in buying based on them.

Tucker mentions that he found the collection of highlights at the end of the book most troubling as a professor, as the temptation for students may be to just read the social highlights and not read the whole book.

Another interesting issue to me, is that book authors may soon have the opportunity for feedback from readers, as blog authors do. As Tucker says, the possibility may exist for authors to see which parts of the book people are highlighting, and even to be able to answer questions from readers.

Do you like the idea of eReading becoming more social, or would some of these features be too much of a distraction? Do you think the privacy concerns are a serious issue, or overblown?

Foursquare and Facebook Places: educate me, entertain me, supersize me.

John Johnston — Thu, 11 Nov 2010 00:42:21 +0000

I thought I’d share a couple of nearby Foursquare offers as a snapshot of what’s going on in the geolocation space, just in my local area. Regular readers will know I’ve written a few other posts about Australian businesses experimenting in the geolocation space.

I see we have the University of Technology, Sydney offering a free movie ticket for the Foursquare Mayor of the UTS Library on a certain day. Interesting new way to encourage students to study? If you come an study at the library regularly, we’ll reward you with some entertainment.

Of course we also have fast food chains starting to offer the “supersize me” types of deals we’re all familiar with.

Never to be outdone, I see that Facebook is now introducing Facebook Deals, which is layered on top of Facebook Places, to provide a similar service to local businesses and users of Facebook.

What kind of offers have you seen in your local area? Anything that’s tempted you yet?

Facebook is all Green now, don’t give us any more suggestions please.

John Johnston — Tue, 09 Nov 2010 00:40:40 +0000

Perhaps in response to the earlier reported pressure from Greenpeace and others, Facebook has put up a ‘Green on Facebook’ page, highlighting the company’s “efforts to be a green and sustainable global citizen”.

The page has information on Facebook’s environmental and energy efficiency programs, and has links to its energy efficiency partners, such as Digital Energy Solutions Campaign, Alliance to Save Energy and The Green Grid.

Facebook may be correct in asserting that “By enabling millions of people from diverse backgrounds to easily connect and share, we believe we can help unleash innovative environmental initiatives across the globe.”. In addition, it appears that Facebook has now realised, with more than a little pressure it has to be said, that it should also lead by example.

An obvious question now, given how big Facebook has become, is: do you think Facebook is doing enough? Facebook’s stated programs and energy efficiencies now include:

Encouraging recycling and composting throughout Facebook facilities.
Reducing water consumption by nearly 60%, including auto/dual flush toilets and motion sensor faucets.
Motion sensor controlled lighting, reducing energy consumption by 60%.
A Green transportation program offering shuttles, car and vanpooling, bike racks and subsidised public transport for employees.
Facebook has designed a programming language (HipHop for PHP) that provides 50% CPU savings, meaning fewer servers are needed.
Facebook has made the storage of user photos more efficient, so it uses 20% less power than industry standard storage architecture.
Facebook has invested in and is introducing various data center efficiencies on an ongoing basis.

Not bad. They have also added a “Have any further suggestions related to Facebook and the Environment, submit it here” link, but strangely enough, when I clicked it, it came back with:

Hmm, bit of an oversight there. No doubt they’ll fix that. They do allow comments on their wall though. I noticed quite a lot of “No To Coal” spam there as it happens.

Have you tried Instagram iPhone app for image sharing yet?

John Johnston — Wed, 03 Nov 2010 01:37:27 +0000

Here’s a little iPhone app I’m now using that I think is pretty cool.

Instagr.am is a new image sharing service (currently just for iPhone) that enables you to take a photo, or use an existing photo from your iPhone photo library, and share it. There is also a decent choice of interesting filters you can quickly apply to each photo and preview before uploading.

I think the really handy things about this service are that it’s really easy to use, and that you can crosspost the images to Facebook, Twitter, Flickr and Tumblr if you so desire – greatly increasing the sharing aspect. You can also locate a photo using Foursquare before you share it. As Foursquare doesn’t yet have image uploads the way Gowalla does, it’s a welcome addition.

It’ll be interesting to see how this service develops, if it develops. Surely they’ll be adding platforms other than iPhone, if they have the funds to do so.

If you’ve used Instagram, what do you think of it? Good enough to keep using? If you haven’t, do check it out.

‘The Social Network’ movie: “Like”, a lot [review].

John Johnston — Fri, 29 Oct 2010 03:31:47 +0000

Not long ago I previewed The Social Network movie, so I thought I should see it as soon as it came out here in Australia and report back. Turns out the film lived up to my reasonably high expectations, given that it’s directed by David Fincher and written by Aaron Sorkin, and has had many good reviews.

The film really focuses on the relationship between co-founders Mark Zuckerberg and Eduardo Saverin (who was forced out of the company but I understand still owns about 5%), and to a lesser extent the relationships between Zuckerberg, Saverin and Sean Parker. Sean Parker, who founded Napster, helped Zuckerberg during the early stages of the company and also owns a small but valuable percentage.

The film also deals with the case between Zuckerberg and the Winklevoss twins, the Harvard classmates who accused Zuckerberg of stealing the idea for Facebook from them and then sued him for ownership of it.

Jesse Eisenberg is brilliant as Mark Zuckerberg and Andrew Garfield is good as Eduardo Saverin. Beyond expectation, even Justin Timberlake is not bad at all in the role of Sean Parker.

Even if you’re not into Facebook and know or care little about the founding of the company, seeing the tensions between the characters involved is fascinating. Needless to say, I’m sure many of the situations never happened, or not in the way portrayed, but the elements of loyalty, envy and competitiveness certainly go together to make great drama viewing.

By the way, the first scene is brilliantly written and sets the tone for the whole film, so don’t be late if you’re going to see it at the cinema. Go and see it though, I definitely recommend it. “Like”.

jjprojects: our social web » Facebook

“Great vampire squid” wraps itself around The Social Network.

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