Instagram, Foursquare, Facebook: Ten Nyman on Packaged Lives

Ted Nyman hypothesizes in his post “The Horrible Future of Social” that our obsession with digital services is cheapening our lives:

We have begun to pollute and desecrate and cheapen all of our experiences. We are creating neat little life-boxes for everything, all tied up with a geo-tag, a photo, a check-in; our daily existence transformed into database entries in some NoSQL database on some spinning disk in some rack in suburban Virginia.

The end-game is this. Slowly, gradually, without realizing: we stop participating in our own lives. We become spectators, checking off life achievements for reasons we do not know. At some point, everything we do is done soley to broadcast these things to casual friends, stalkers, and sycophants.

It’s a profound observation.

Today, I got my first Mayorship badge on FourSquare. But I didn’t know how to feel about it. Was it an actual accomplishment? A momentary boost of ego, sure, but what does it matter a week from now? A month? A year?

Mark Zuckerberg Visits Russia, Avoids Wearing Hoodie

The New York Times details Mark Zuckerberg’s recent trip to Russia, where he met Prime Minister Dmitri Medvedev. The big story here is that Zuckerberg didn’t wear his hoodie and instead looked professional in a suit and tie…

But on a more interesting note, this paragraph intrigued me:

More Russians are online today than Germans, making Russia the largest Internet market in Europe. Russians also, strangely, have spent more freely relative to their income than Americans on virtual products, like special powers for online games, making their country a useful market for testing revenue streams other than advertising.

I don’t have a guess as to why virtual products are so popular in Russia.

On another note, check out the bottom of the article for a hilarious correction:

An earlier version of this article misstated the surname of Mark Zuckerberg as Zuckerman at one point.

Why Facebook Stock Will Continue Its Decline

From this excellent New York Times piece detailing the woes of the Facebook stock, I wanted to highlight these two paragraph:

The next test for the stock could come soon. Over 1.6 billion shares will be eligible to come on the market in several waves, starting on Thursday, when a number of shareholders are allowed to sell. Investors may fear that an influx of shares could cause prices to fall even more.

One former Facebook employee, who did not want to be named because he did not want to damage his relationship with onetime co-workers, said he expected other employees to cash in their stock options as soon as they could, and predicted that the stock’s woes could make it difficult to retain and hire talent. He no longer owns Facebook stock.

My prediction? A lot of insiders are going to unwind Facebook stock, and the effect will be a further decrease in the stock price. I am staying far away. I wouldn’t be surprised if the stock price is trading below $10/share by the beginning of 2013.

Stocks Perform Better If Women Are On Company Boards

Heather Perlberg  for Bloomberg reports:

Shares of companies with a market capitalization of more than $10 billion and with women board members outperformed comparable businesses with all-male boards by 26 percent worldwide over a period of six years, according to a report by the Credit Suisse Research Institute, created in 2008 to analyze trends expected to affect global markets.

Net income growth for companies with women on their boards has averaged 14 percent over the past six years, compared with 10 percent for those with no female director, according to the Credit Suisse study, which examined all the companies in the MSCI ACWI Index.

The analysis doesn’t apply to IPOs, as evidenced by Facebook’s decline. Facebook appointed Chief Operating Officer Sheryl Sandberg as its first female director about a month after its May initial public offering; the stock is down nearly 50% since the $38 initial public offering in May.

Facebook’s Business Model

Before you go out and buy that Facebook stock when it IPOs today, consider the warnings. There are plenty of opinions out there. But the best consideration of the whole matter I have read in the last two weeks comes courtesy of Chris Dixon, who considers Facebook’s business model. Namely: display ads. Display ads generally hurt the user experience, and are also not very efficient at producing revenues. The crux of the matter:

The key question when trying to value Facebook’s stock is: can they find another business model that generates significantly more revenue per user without hurting the user experience? (And can they do that in an increasingly mobile world where display ads have been even less effective.) Perhaps that business model is sponsored feed entries, as Facebook seems to be hoping (along with Twitter and perhaps Tumblr). The jury is still out on that model. Personally, I have trouble seeing how insertions into the feeds aren’t just more prominent display ads. You still have to stoke demand and convert people from non-purchasing to purchasing intents. A more likely outcome is that Facebook uses their assets – a vast number of extremely engaged users, it’s social graph, Facebook Connect – to monetize through another business model. If they do that, the company is probably worth a lot more than the expected $100B IPO valuation. If they don’t, it’s probably worth a lot less.

Chris’s short post is worth reading in entirety.

The Decline of the Public Company

As Facebook debuts its IPO today, a good reminder at The Economist on the decline of the public company:

The number of public companies has fallen dramatically over the past decade—by 38% in America since 1997 and 48% in Britain. The number of initial public offerings (IPOs) in America has declined from an average of 311 a year in 1980-2000 to 99 a year in 2001-11. Small companies, those with annual sales of less than $50m before their IPOs—have been hardest hit. In 1980-2000 an average of 165 small companies undertook IPOs in America each year. In 2001-09 that number fell to 30. Facebook will probably give the IPO market a temporary boost—several other companies are queuing up to follow its lead—but they will do little to offset the long-term decline.

So why is Facebook going public, anyway? It’s not like it needs to raise the cash.

Mark Zuckerberg has resisted going public for as long as he could, not least because so many heads of listed companies advised him to. He is taking the plunge only because American law requires any firm with more than a certain number of shareholders to publish quarterly accounts just as if it were listed.

 

Bloomberg Billionaires Index

With Facebook set to IPO on May 18, with the share price set in the $28 to $35 range, Bloomberg has now updated its Billionaire List to reflect Mark Zuckerberg’s wealth at $17.6 billion.

It’s kind of ridiculous, but this billionaire index is updated daily. For instance, here are today’s top 40 wealthiest people according to Bloomberg:

NAME EST. NET WORTH CTRY $ CHG DAILY % CHG YTD
1. Carlos Slim Helu $ 75.0 billion MEX $ 65.5 M 21.7
2. William “Bill” Henry Gates III $ 63.2 billion USA – $ 394.8 M 12.7
3. Warren E. Buffett $ 45.4 billion USA $ 12.2 M 6.1
4. Ingvar Kamprad $ 42.5 billion SWE – $ 570.0 M 14.6
5. Bernard Arnault $ 42.2 billion FRA $ 234.2 M 19.6
6. Amancio Ortega Gaona $ 38.3 billion SPN $ 716.3 M 9.8
7. Lawrence “Larry” Joseph Ellison $ 37.2 billion USA – $ 377.0 M 12.8
8. Charles De Ganahl Koch $ 35.5 billion USA $ 119.7 M 5.7
9. David Hamilton Koch $ 35.5 billion USA $ 119.7 M 5.7
10. Eike Fuhrken Batista $ 31.7 billion BRA – $ 84.6 M 40.8
11. Sheldon Gary Adelson $ 25.0 billion USA – $ 576.9 M 26.6
12. Christy R. Walton $ 24.7 billion USA – $ 35.2 M – 1.3
13. Li Ka-Shing $ 24.6 billion CHN – $ 169.1 M 11.0
14. Stefan Persson $ 24.0 billion SWE $ 379.8 M 10.2
15. Liliane Bettencourt $ 23.8 billion FRA $ 53.2 M 17.7
16. Jim C. Walton $ 23.4 billion USA – $ 6.9 M 0.1
17. David K.R. Thomson $ 23.2 billion CAN – $ 157.2 M 8.5
18. Samuel “Rob” Robson Walton $ 23.0 billion USA – $ 6.8 M 0.2
19. Michele Ferrero $ 22.6 billion ITA – $ 111.3 M 7.4
20. Alice L. Walton $ 22.4 billion USA – $ 6.9 M – 0.2
21. Karl Albrecht $ 22.0 billion GER $ 466.9 M – 1.6
22. George Soros $ 22.0 billion USA – $ 13.6 M 3.7
23. Mukesh D. Ambani $ 21.8 billion IND – $ 444.7 M 1.9
24. Jeffrey “Jeff” Bezos $ 21.4 billion USA – $ 95.4 M 30.5
25. Alwaleed Bin Talal Al Saud $ 20.5 billion SAU 0 18.2
26. Lee Shau Kee $ 19.5 billion CHN – $ 20.3 M 13.0
27. Alisher Usmanov $ 19.3 billion RUS $ 38.4 M 10.8
28. Cheng Yu Tung $ 19.1 billion CHN $ 87.6 M – 4.9
29. Lawrence “Larry” E. Page $ 18.9 billion USA $ 73.3 M – 3.9
30. Sergey Brin $ 18.8 billion USA $ 71.7 M – 3.8
31. Georgina “Gina” Hope Rinehart $ 18.7 billion AUS – $ 144.8 M – 7.5
32. Alberto Bailleres Gonzalez $ 18.6 billion MEX – $ 212.2 M 7.9
33. Rinat Akhmetov $ 18.1 billion UKR – $ 72.1 M 25.8
34. Lakshmi N. Mittal $ 18.0 billion IND – $ 227.7 M – 14.7
35. Iris Fontbona $ 17.7 billion CHL – $ 538.1 M 0.7
36. Mark Elliot Zuckerberg $ 17.6 billion USA – $ 2,900.0 M – 2.2
37. Azim Premji $ 16.3 billion IND $ 97.0 M 1.5
38. Jorge Paulo Lemann $ 15.8 billion BRA $ 20.8 M 28.8
39. Vladimir Lisin $ 15.8 billion RUS – $ 231.7 M 6.3
40. Steve Ballmer $ 15.4 billion USA – $ 38.3 M 17.5

Mark Zuckerberg is number 36 on the list, well ahead of Steve Ballmer.

On another note: this is a good article to read about the Facebook IPO.

On Instagram and Facebook

This piece by Paul Ford who compares Instagram and Facebook is well-written, savvy, and less “tech-y” than anything I’ve read since the announcement.

Remember what the iPod was to Apple? That’s how Instagram might look to Facebook: an artfully designed product that does one thing perfectly. Sure, you might say, but Instagram doesn’t have any revenue. Have you ever run an ad on Facebook? The ad manager is a revelation — as perfectly organized and tidy as the rest of Facebook is sprawling and messy. Spend $50 and try to sell something — there it is, UX at its most organized and majestic, a key to all of the other products at once.

To some users, this looks like a sellout. And that’s because it is. You might think the people crabbing about how Instagram is going to suck now are just being naïve, but I don’t think that’s true. Small product companies put forth that the user is a sacred being, and that community is all-important. That the money to pay for the service comes from venture capital, which seeks a specific return on investment over a period of time, is between the company and the venture capitalists; the relationship between the user and the product is holy, or is supposed to be.

Also, props to Paul Ford for one of the best analogies I’ve read in a long time:

In terms of user experience (insider jargon: “UX”), Facebook is like an NYPD police van crashing into an IKEA, forever — a chaotic mess of products designed to burrow into every facet of your life.

Definitely take five minutes out of your day to read the whole thing.

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Unrelated, but “How To Say I Love You” is one of Paul Ford’s gems from last year. A must-read.

Facebook Acquires Instagram for $1 Billion

Well, this is huge news in the tech world today. Facebook acquires the photo app Instagram for $1 billion in cash and stock. Here is Mark Zuckerberg with the announcement:

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

This is the pivotal reaction from Instagram’s founders:

It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.

Based on the above statements, the Instagram app should still remain the same. I hope that’s the case. Something I value deeply is ability to post items on Instagram unaffiliated to my Facebook timeline/stream. I feel the same way about discovering other photographers using the app.

On Facebook Passwords and Employment

There’s been a lot of talk these days about employers asking potential employees for their social media credentials. Facebook, in particular, has issued strong resistance against this trend, going so far as publicly explaining their stance in a blog post:

The most alarming of these practices is the reported incidents of employers asking prospective or actual employees to reveal their passwords.  If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends.  We have worked really hard at Facebook to give you the tools to control who sees your information. 

As a user, you shouldn’t be forced to share your private information and communications just to get a job.  And as the friend of a user, you shouldn’t have to worry that your private information or communications will be revealed to someone you don’t know and didn’t intend to share with just because that user is looking for a job.  That’s why we’ve made it a violation of Facebook’s Statement of Rights and Responsibilities to share or solicit a Facebook password.

We don’t think employers should be asking prospective employees to provide their passwords because we don’t think it’s the right thing to do.  But it also may cause problems for the employers that they are not anticipating.  For example, if an employer sees on Facebook that someone is a member of a protected group (e.g. over a certain age, etc.) that employer may open themselves up to claims of discrimination if they don’t hire that person. 

Today, The House of Representatives shut down a bill that would have prevented employers from demanding your Facebook password. So, what’s the worst that could happen?

Reginald Braithwaite has a fictional post on the matter titled “I Hereby Resign”. Just imagine if this scenario played out for real (if it hasn’t already somewhere around the world):

One of the new terms is that every prospective new hire allow their manager to “shoulder surf” as they browse their Facebook or better still, to voluntarily log their manager into their Facebook account. If I recall correctly, she claims that we have the obligation to do a “background check” on prospective hires. I’m extremely vague on the correlation between faux-promiscuous sex or drinking and employee performance, but as she is a seasoned veteran, I have to trust her when she says that things like this overrule my judgment as to who is and who isn’t fit to be a programmer in our employ.

I was willing to go along with things and see how they panned out. But today something went seriously wrong. I have been interviewing senior hires for the crucial tech lead position on the Fizz Buzz team, and while several walked out in a huff when I asked them to let me look at their Facebook, one young lady smiled and said I could help myself. She logged into her Facebook as I requested, and as I followed the COO’s instructions to scan her timeline and friends list looking for evidence of moral turpitude, I became aware she was writing something on her iPad.

 “Taking notes?” I asked politely.

 “No,” she smiled, “Emailing a human rights lawyer I know.” To say that the tension in the room could be cut with a knife would be understatement of the highest order. “Oh?” I asked. I waited, and as I am an expert in out-waiting people, she eventually cracked and explained herself.

“If you are surfing my Facebook, you could reasonably be expected to discover that I am a Lesbian. Since discrimination against me on this basis is illegal in Ontario, I am just preparing myself for the possibility that you might refuse to hire me and instead hire someone who is a heterosexual but less qualified in any way. Likewise, if you do hire me, I might need to have your employment contracts disclosed to ensure you aren’t paying me less than any male and/or heterosexual colleagues with equivalent responsibilities and experience.”
I got her out of the room as quickly as possible. The next few interviews were a blur, I was shaken. And then it happened again. This time, I found myself talking to a young man fresh out of University about a development position. After allowing me to surf his Facebook, he asked me how I felt about parenting. As a parent, it was easy to say I liked the idea. Then he dropped the bombshell.
His partner was expecting, and shortly after being hired he would be taking six months of parental leave as required by Ontario law. I told him that he should not have discussed this matter with me. “Oh normally I wouldn’t, but since you’re looking through my Facebook, you know that already. Now of course, you would never refuse to hire someone because they plan to exercise their legal right to parental leave, would you?”
Worth reading in its entirety. Think your stance on this issue doesn’t matter? Think again.