Posted by: Patrick | March 14, 2010

NYTimes.com: Facebook Helps Social Start-Ups Gain Users

By JENNA WORTHAM

Published: March 12, 2010

Frank Curry for The New York Times

Mark Hendrickson, the chief executive of Plancast, where members share social or business plans, said social networking services are more valuable when your friends are using them.

But a growing number of start-up companies are getting around this problem by, in essence, outsourcing the sign-up process. They are making use of a Facebook service that lets users log into new sites using their Facebook credentials. The free service, Facebook Connect, can help nascent Web services recruit a healthy crowd of users in a hurry, and help the users find their friends on those sites.

At the same time, the service reinforces Facebook’s role as the central hub of the social networking world.

“There is always a chicken-and-egg problem with any social service,” said Mark Hendrickson, co-founder of a service called Plancast, which lets members share their social or business plans with their online circle of friends. “You have to have friends there already to make it valuable.”

Relying on another company for such an important function can be risky. For example, an unexpected technical problem at Facebook could affect a start-up’s site. More broadly, any big change in the way Facebook works could have ripple effects.

Mr. Hendrickson acknowledged those challenges, saying, “These platforms are essential for next-generation technologies, but they are also still minefields for those same new technologies.”

Most sites hedge their bets by also creating ways for people to sign up directly, or to use their log-in information from Twitter, in addition to Facebook, as Plancast has elected to do.

Of course, coming up with a clever idea and synching it to Facebook Connect does not guarantee a home run. Gelato, a matchmaking service that finds other lovelorn people in your social circle, failed to gain much traction after it was introduced last fall.

On the other hand, Aardvark, which lets users seek answers to questions from people in their extended online network, was bought by Google for a reported $50 million last month.

Facebook Connect has helped give rise to a new wave of social Web services that benefit from piggybacking on Facebook and its 400 million users.

Blippy, for example, is a new service that allows members to give friends a glimpse into their spending habits by showing purchases made through iTunes and Netflix and on major credit cards.

“There hasn’t been a big forum for talking about what you buy online,” said the service’s co-founder, Philip Kaplan. “The concept came from the idea that every time you use your credit card to pay for something, there is potentially an interesting conversation to be had with friends and online followers.”

The approach seems to be working. Although Blippy opened its site to the public only in January, members have shared details of more than $15 million in purchases with their friends.

Quora, a question-and-answer service that is still in a test phase, uses new members’ Facebook profiles to flesh out their Quora accounts, picking up clues as to which topic areas the members are experts in. In contrast to most question-and-answer sites, Quora attaches real names to answers.

Another advantage to using the Facebook service is that it makes it easy for people to send messages back to Facebook from the other sites that are linked to it. A service called LoKast, which lets users share media like songs and videos with others nearby using a mobile application, will rely heavily on Facebook and Twitter to increase its user numbers.

“People also invite friends through Facebook Connect, but you can also use it to find new users to share content with,” said Boris Bogatin, co-founder of the company. “You may not know who is in your vicinity, but if you twittered or posted to Facebook that you’re on LoKast with media to share, you can find people.”

Businesses built around Facebook Connect could also reap benefits when it comes to advertising, said Charlene Li, founder of the consulting firm Altimeter Group.

“Knowing the tailored details about a user and their interests is infinitely more valuable to an advertiser,” said Ms. Li.

Since Facebook Connect was introduced in December 2008, more than 80,000 Web sites and services have put the log-in feature to use, said Ethan Beard, director of the Facebook developer network. They are not just start-ups either: The Huffington Post uses it to allow readers to comment on news articles, and Yahoo recently built it into a handful of its products, including Yahoo Sports and Yahoo Answers.

But just as the service allows people to travel across the Web, bringing their identities and social networks with them, it is also a way to cement Facebook’s role as a central hub for socializing — and to keep other Web companies from usurping it.

“Facebook is evolving through Facebook Connect into much more than a Web site,” said Mr. Beard, who works closely with Facebook’s community of third-party developers. “It’s also a technology and a service to provide social plumbing and creating a social layer the whole Web can leverage.”

Although there is no formal process to approve the Web services and applications that use Facebook Connect, the company says it has a team that keeps close watch on it to curtail spam and other illicit activity.

Amanda Lenhart, a researcher at the Pew Internet and American Life Project, said that services like Facebook Connect could help people cut through the noise online.

“In a way, these services are a response to the ever-increasing amount of information on the Web,” she said. “How are you going to filter it? We need our network and like-minded people to connect us to the information we need the most.”

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