EightBlack.

Charlene Li from Forrester interviews Max Levchin from Slide at the first Keynote of the Expo.

I only recently learned who Max was - which is probably the way he likes it. Fame and fortune came his way with the creation of PayPal and he gracefully exited PayPal with US$1.5 billon of eBay’s money.

Most entrepreneurs in the room breathed a collective sigh of relief when Max recounted the 4 failed start-ups and an obliterated credit history before finding success with PayPal.

He’s clearly excited about the future of Slide. Who wouldn’t be given the mass exposure their applications receive within Facebook. According tho the Slide website they reach 144 million global viewers each and every month and have 30% of the US internet audience. (Slide make those zany applications like Funwall and Superpoke).

Max strikes me as still the sort of guy who doesn’t really know what all the fuss is about, is clearly uncomfortable about the fame and attention and simply wants to get on with his quiet world domination plans.

Bravo.

On the drive into work this morning, news on the radio mentioned that one of our main broadcasters, Network 7, was banning all staff from accessing the social networking site - Facebook. (Pictured above is Channel 7 Head Honcho Kerry Stokes). He’s clearly got unresolved issues with his parents by the look on his face.

Anyway.

In this day and age, draconian measures like this are just plain dumb. The line from management is that they want their staff focussed on other things. What a crock.

Clearly a case of old media, not knowing how to handle new media. Treating employees like naughty school kids is about as useful as telling either Britney Spears or her promisicuous sister the benefits of birth control.

*Image courtesy ABC

It was a deal Microsoft virtually had to win. (And I think they got off cheap).

Does it make sense? Not sure yet. Too early to tell. Apparently, negotiations were going on as late as Thursday/Friday last week when both Steve Ballmer and Mark Zuckerberg were in San Francisco attending the Web 2.0 Summit.

There is no doubt Ballmer would have gone “ballistic” if this deal had fallen into Google’s hands. It was probably the reason why he allegedly handled the final negotiations himself. They always had the upper hand in one sense, because of the existing ad relationship that was in place. That was always going to be a hurdle for Google to jump over.

And last week at Web 2.0, Mark Zuckerberg struck me as the sort of young man that wasn’t easily as influenced with the standard job spiel enticement from the Google HR folks (ie “Mark, dude, come to Google, free food, great facilities and technology and you get to work on the coolest shit in the world”). Zuckerberg’s response would most probably have been “but I already am…”

The cash injection of US$240 million for a 1.6% stake values the social networking at US$15 billion.

Apparently, the funds will be used for infrastructure, hire more super geeks, make acquisitions (of more super geeks) and help with international expansion, which is where the growth lies for the barely 3 year old company.

From today’s Facebook-Microsoft conference call with reporters: Microsoft needs the international ad agreement because Facebook says nearly 60 percent of its 50 million active users are based outside of the US. Facebook also claims to be gaining 200,000 new users per day, worldwide.

The deeper issue here is not that Microsoft won and Google didn’t - although its psychologically important. The bigger issue is that Facebook may have cracked the “AdCode” and found a very viable alternative to the absolute market dominance of Adwords and Adsense.

If, as is reported at VentureBeat -

Yesterday, reports also surfaced a new Facebook ad product, apparently trademarked “SocialAds,” will be previewed November 6 to some of Facebook’s closest advertisers. Conde Nast, Nike, Apple, Sony, General Motors, Coke, CBS, Chase and Verizon have paid $300,000 each to be “Landmark Partners,” meaning they are the first advertisers to try SocialAds, according to these reports, none confirmed by Facebook. When asked for comment, a Facebook spokeswoman responded: “Facebook does not comment on speculation or rumor.”

The idea of the deal is to focus on “demand fulfillment” by taking advantage of Facebook users’ high engagement with each other, Facebook VP of product marketing and operations Chamath Palihapitiya was quoted telling FastCompany.

Facebook has a unique set of data about users that may be able to provide more relevant targeting, more often, possibly putting Facebook in competition with Google’s Adwords and AdSense programs.

You can be sure that the “courting” has only just begun. Microsoft’s deal simply gets them a seat at the table. Sort of like a rich uncle coming to dinner.

Google will scramble to push MySpace as quickly as they can now and the sooner MySpace opens up its API so the world’s development community can get to work, the better. Momentum has shifted to Facebook of late, but I for one, wouldn’t write off Murdoch and DeWolfe over at MySpace just yet.

According to this chart (courtesy Commscore and WSJ), MySpace still have more than double the unique visitors, but the percentage change with Facebook’s numbers is what should be worrying Murdoch.

One things for sure, the social networking “fad” as many people were referring to is no longer one of fiction. It’s here to stay.

And Microsoft, to their credit, are now a serious player.

Round One to Microsoft.

I think a lot of people forget that Facebook’s Mark Zuckerberg is still only 23. Most of us cant remember what we were doing when we were that age. Well, we probably can, but we just don’t want to talk about it or admit it.

Safe to say that most of us weren’t being courted by the world’s leading technology companies, or being offered just shy of a billion dollars to sell something we cooked up in our dorm room at University.

Fast forward to now whereby the valley is placing a valuation on the social networking juggernaut somewhere in the vicinity of $15 billion. He’s got Venture Capitalists salivating all over him like Pavlov’s dog, the world’s leading search company playing second fiddle for once, an ad partner in Microsoft probably so determined not to lose this deal that they’ll probably pay anything to gain control and the entire technology sector watching his every move. The kid can’t fart without someone noticing.

Poor bastard.

And people still don’t think we’re in a bubble. Anyway.

After a brief intro by Web 2.0 Summit founders, John Battelle and Tim O’Reilly - the slightly awkward Mark Zuckerberg appeared on stage. Jeans and sandals as per normal.

I’m sure there are times when he wishes that all this attention would go away. Unfortunately, today at Web 2.0 was one of those days when it wasn’t.

Here’s my take on the session.

(JB = John Battelle, MZ = Mark Zuckerberg)

JB: Hows the financing going?

MZ: Well, almost wrapped up…

JB: Don’t you think you’re selling yourself short at $15 billion?

MZ: We’ll see…(uncomfortable, yet slightly cheeky grin…)

JB: Lets talk about what you do…How do you spend a day, what % on corporate development and what % on Financing and the IPO?

MZ: Financing and the IPO, none. Building the team….all the time.

JB: What about the revenue model?

MZ: We spend a lot of time on product development.

JB: But don’t you sit there and sometimes say “Damn it, we’re not making our numbers!”

MZ: No, because they’re so good

JB: Ok, not so much then on revenue model…

MZ: We don’t focus on exceeding – just break even. Even when we started out in my dorm room at Harvard, and our server costs were less than $100 bucks a month, all we’d make sure we did was to sell enough to cover those costs.

JB: Lets talk about growth. How many people are onboard now?

MZ: A little more than 300…I think.

JB: And in a year from now…?

MZ: Probably 700 or more in another year

JB: That’s massive growth by anyone’s standards? Do you have a process? How do you get a job at Facebook, especially before say an “event” might occur? (Battelle cheekily refers to the pending IPO, audience laughs, but Zuckerberg remains straight faced. He obviously played a lot of poker when he was at Harvard).

MZ: The IPO is years out…

JB: Are you sure…? What about recruiting then…?

MZ: Most of the recruiting is happening via referral and that in itself is providing far more than we can handle in terms of people to talk with.

JB: Can you define the term “social graph”?

MZ: I think the term is a misconception…we talk about the set of connections, our friendships, people we do business with, etc. We want to map out the real connections people have in the world. Once we have it, we can map it out and match it to a set of applications. No one has a social graph, but I think Facebook has a model of one.

JB: Is it heir to pagerank? Is the Facebook social graph akin to the secret sauce of Facebook?

MZ: The social graph is a structural thing, what can you learn by your connections, shared values, perceptions.

JB: When was it that you figured out you wanted to build Facebook?

MZ: Facebook wasn’t the original idea, but the ramp up has been incredible, and we’re still in it’s early stage. When we did decide to build Facebook, we wanted to release it quickly. We could have delayed it 6 months and ironed out all the bugs, but we decided to launch (lesson here, when at 80% it’s good enough, refinement and fine tuning can be done in real time)

JB: Lets talk about the developers Terms of Service (TOS) – Can you stop anyone anytime you want?.

MZ: I think Facebook has built incredible trust with the community we have. We have gone out of our way to open up the platform so anyone can develop anything. The intent of the actual TOS is not as harsh as the language in it sounds.

Battelle then continues to probe about the TOS issue as it relates to developers…

MZ: I don’t think it would be a good idea if we became too draconian..

JB: Do you see areas where FB might want to expand in….?

MZ: There might be something in ads…

JB: Do you want to elaborate on that…?

MZ: No! That’s enough. More in a few months…

JB: What about media? Integrated media, music etc Is media something that FB is interested in?

MZ: We’re not really a media company.

JB: One more question on ads. Hows the deal with Microsoft going?

MZ: We’re both happy?

JB: Are you sure?

MZ: I think so…

JB: Do you want to build a syndicated version of that, adwords, adsense?

(Zuckerberg avoided this and said we’ll talk in 3 months. There’s something brewing with this).

JB: What is your view re privacy?

Mark then referred to an example of someone putting up a Photo album on Facebook – ie you can share it with just a few people (ie friends) or a lot. He stated that Facebook take privacy very seriously and spoke about “a granular control of sharing information…”

JB: Would you endorse the statement “don’t be evil”

MZ: We probably would, but we wouldn’t expound it.

JB: Whose data is it Mark?

MZ: It’s the users data.

Questions from the floor then started. Some moron waffled on about how a profile was created in his name without his permission. Waste of time and Zuckerberg was starting to lose the will to live and clearly perplexed as to how the guy actually made it to the gig in the first place.

Thankfully, Charlene Li from Forrester went next and asked a more sensible question referring to the 6000 apps Facebook has. She wanted to know which one is still yet to be developed and was Mark happy with all the apps out there.

John Battelle then asked when was Facebook going to adopt the same approach Google took and bring in an adult to run the place. I thought Zuckerberg handled this exceptionally well. He stated that the Facebook model isn’t the same as Google and all he’s concerned with is building the right team.

Summary: Was there a lot of insight into Facebook? Perhaps not. But what I am sure after watching Mark Zuckerberg is this. He know’s a lot more than he lets on (obviously). Facebook is just getting started and there is sure to be a play in the online ad space - of that I am convinced. It’s also very clear that he is getting some very smart advice now from probably a handful of trusted “adults”. All staff now have equity and no there are no plans to change that. International expansion is a key driver, as is customisation of the FB applications to suit each market.

As someone on just the wrong side of 40, I never took much notice of Facebook. Until recently. There is a huge play in the corporate world - more so perhaps than in the individual one. Facebook can evolve with you from the time you create your first profile as an awkward yet fearless teenager, to an adult with a career and family.

It clearly is the company to watch. More so than MySpace. And it’s here to stay. There is good coverage from this session here and here.

(Image courtesy the SMH website).

God I hope this doesn’t happen. News today running in the US edition of the Wall Street Journal talks about Microsoft taking a 5% stake in the social networking darling for anywhere between US$300-$500 million. The full article is here.

Mark Zuckerberg, the young CEO and founder is no fool. He’s already knocked back a billion (or just under) from Yahoo! a little while ago. And Google has made it abundantly clear that it wants to play.

Microsoft, for whatever reason, has the tactical advantage given that it already has an ad syndication deal with Facebook which has been running for just over a year now and continues through to 2009.

If Zuckerberg knocked back a cool billion from Yahoo!, I can’t understand why he jumped into bed with Microsoft and what is clearly an inferior search partner with their AdCenter platform. It can’t have been money alone - he’s got people throwing the stuff at him in the same way the US Department of Defense spends money on going to war.

It seems on the surface such an unlikely combination. I can’t imagine a guy who wears thongs to work, comes in when he wakes up, and running one of the hottest online gigs around sitting down for sushi with someone like Microsoft’s Steve Ballmer. It’s about a likely combination as Britney Spears and Barry Manilow.

Maybe Microsoft hired some private investigators and has photos of the Facebook team doing unflattering things with 2 camels and a goat.

Because I’m buggered if I know why the ad deal got done in the first place and equally buggered as to know why on earth Facebook would sell a stakeholding to a 30 year old dinosaur.

Maybe you’ve got the answer?

Here’s a recent video interview of Mark Zuckerberg at the recent Techcrunch4.0 gig held last week in the states. Maybe this has the answer I’m looking for.

I want to talk about Facebook for a sec.

Maybe its me. Maybe I’m too old. I just dont get it (ok, I’m 40 - so sue me. Or stop laughing).

I was talking to some folks last night at MODM4 at Riverland. Incidentally, my mate Dave Sharry has done a great job with Riverland. The atomosphere is just great and even on a mild winters night in Melbourne, they’ve done all they can with an abundance of heaters and big, PVC umbrellas. Davo is great at attention to detail.

Here’s a picture of me with the Gabriel brothers from MyLiveSearch (look at the back of the room, thats me on the left, beside me is Rob Gabriel the smart bastard behind MLS and his younger brother, Mark beside him). More on MyLiveSearch later.

Back to Facebook.

I was talking with 3 people who I had not met before, 2 of whom quickly became apparent to even me, were a couple. They met on Facebook. The girl said that initially she thought the guy who she was now dating was a bit of a wanker because he had a profile on MySpace and also on Facebook. But then she said something that made even me feel a bit awkward.

She said, “but I decided to poke him”.

“Excuse me….?”

“Yeah, I poked him….” She smiled wrily knowing full well what a silly moron I was.

“Really” I said, wondering how I might be able to do the same without my wife finding out…

Apparently, poking is like winking online, giving someone a nudge. It indicates “oy, I want to talk with you”. Or something like that.

I excitedly went and logged into my Facebook profile, but sadly there are only 2 girls and 1 guy in my “friends” area. One of the girls was a bridesmaid at our wedding and now lives in London. I didnt have the courage to “poke” her. I thought she might ring and abuse me or something.

Anyway, when I was driving home tonite, one of the news stories talked about how the number of Aussies now on Facebook has grown by 200% or something equally impressive in the past few months. Apparently, subscriber numbers globally on Facebook now exceed 32 million. A mere pittance compared to Old Man Murdochs MySpace - which allegedly has 200 million plus.

The MySpace interface is like a teenagers bedroom - a bloody mess. And profiles are a mash-up, but not in the Web 2.0 sense of the word. It gives me a freakin’ headache just looking around at how some people have butchered their personal “spaces”.

2 of the young guys who work with me dont have a MySpace profile (or a Facebook one). They’re nerds so its probably a little understandable. Our new Account Executive does though. They were all laughing at me today in the office as I was trying to work out this whole “poking” thing.

Call me old fashioned. But I’d rather pick up the phone. Especially if I wanted to talk with someone.

I dont know what it is with the 18-24 year old demographic that has forced them to go off and create another cyber language. There’s SMS or text language, there’s IM language, there’s email language. Abbreviations of all kinds. Psyuedonym’s that drive you crazy.

Here’s a random question. Do you reckon there are more chicks on social networking sites than guys? Probably makes sense that there are for a whole host of reasons.

All I know is the social networking is here to stay. Period. Corporates are trying to hunker down the company networks and ban their staff from using or accessing social networking sites during business hours. Its fruitless. And pointless in this day and age. Let em network their hearts out is all I say.

After all, someone has to teach old pricks like me how to use the damn things.

PS. My Facebook profile is here. Poking is encouraged. But be quick. Before my wife finds out.