Last August, when I wrote about Facebook’s evolution from a social network to a social utility, the lingo around the social networking phenomenon was well established. We friended college classmates, facestalked exes, posted public messages on walls, unwisely poked colleagues and watched the newsfeed update us on everyone’s recent activity.
In the context of recession, wars and sharp cuts in online advertising, however, Facebook’s path to profitability is under increased scrutiny. ROI for traditional online advertising on the social networking platfrom hasn’t panned out as Facebook execs might hope, as numerous bloggers wagged about in several reports last year.
Facebook Beacon was one approach to monetizing over a hundred million users, though a massive backlash put Mark Zuckerberg and company back on their heels. Beacon is back now, along with ‘Social Ads.”
Enter Facebook Connect. When it was announced in the May of 2008, developers and tech pundits took notice of the further extension of Facebook’s open API. TechCrunch saw it as a response to MySpace’s Data Availability.
Facebook Connect is the latest example of data portability, where users of one website can bring their established personal data, friends and preferences into another network. Connect allows Facebook users to their identity as an authenticating credential on third-party websites, desktop applications or mobile device.
Using Connect, users can log on to other websites using Facebook IDs. Users can choose to rebroadcast their actions on that third-party site to all of their friends within Facebook, whether it’s watching TV shows or movies on Hulu, CBS..com or CNN.com, Digging news stories, buying products or the like.
Does that sound familiar? It should — OpenID was supposed to be the decentralized single sign-on authentication system for the Internet. And before that, Microsoft’s Passport. Neither one has really caught on, for a variety of reasons.
It took until this past week for the buzz around Facebook Connect to really take off, when the New York Times broke the story of Facebook aiming to extend its reach across the Web, rolling out the system to Digg, Hulu and Discovery.com, among 24 other partners.
And, as Michael Calore explains on Wired, as Facebook Connect expands, OpenID’s challenges grow. Some pundits think it may be a fatal blow, because of Facebook’s reach, popularity and the partnerships it has worked out with other sites.
Facebook is being quite careful in its approach to Connect, given privacy concerns. If it pulls it off, however, the social networking giant will have unprecedented data about Internet users browsing, watching, commenting and buying habits to offer advertisers — and that might just be be worth something.
That’s a good thing, too, as some clarity in Facebook’s path to profitability would be timely. The costs of operating one of the world’s top 10 websites are staggering. According to this post from Frédéric Filloux, editor of Monday Note on Dan Farber’s Outside the Lines blog, Facebook has:
- 13,000 servers, with an estimated 50,000 more needed in 2009
- a million dollar monthly electricity bill and a half-million dollar monthly bandwidth tab
- 2 terabytes of data uploaded every day that require the purchase of one NetApp 3070 every week
With those kinds of numbers, the connection Facebook will need most may be one straight to your wallet.