Facebook’s recent announcement of its Open Graph (an effort to map the Web’s content in social terms) and the manner in which it impacts privacy have been the subject of pointed debate for the past few weeks. While these developments will certainly raise questions among Facebook users, they’re also cause for concern for the other major stakeholders in this graph of the Web: content publishers.
More than 100,000 sites have signed up for at least a basic version of Facebook’s Open Graph — the “Like” button, which ties a user’s affinity for a given Web page to his or her profile on Facebook. The Open Graph is Facebook’s bold attempt to step beyond its own website and structure the Web by organizing both content and users’ behavior on third-party sites.
On the face of it, Facebook’s move is a welcome attempt to bring a sense of order to the chaotic manner in which the Web has expanded. For news organizations already grappling with a decline in their traditional business and a slowdown in online advertising, the lure of becoming Facebook-friendly is indeed high. But, does that mean publishers have no other option but to welcome Facebook with open arms? Already, Facebook is serving more ads than Yahoo. Are publishers in danger of becoming commoditized in a situation where Facebook builds a much stronger and larger advertising ecosystem than their traditional enemy, Google? These and many more questions should be top of mind for publishers.
Traditional publishers have been under significant pressure for a while, given the declining state of print. So most have been attempting to build a strong online presence that encourages engagement and the viral spread of their content. Meanwhile, online advertising has evolved beyond the display advertising offered in the Web’s early days, when content was mostly static. Going forward, advertising is set to shift so that it ties into conversations people are having (think product recommendations). It is precisely these conversations that Facebook has in its crosshairs. The opportunity to build a strong database of real human interactions around third-party-generated content is what Facebook is aiming for with its Open Graph.
To be fair to publishers, most of them have long realized the importance of a social web around their content and have over the years tried to add social elements. They started off by letting users email links to friends and add comments, then they added sharing features, and then they warmed up to using systems like Facebook or Twitter to encourage users to log in to their sites. Some content players, such as Bloomberg Businessweek and the New York Times, have gone one step ahead and even attempted to create a complete social service (Business Exchange & TimesPeople) on top of their content — but found it difficult to compete with established social networks not tied to a single website.
So there’s the dilemma: to Facebook or not to Facebook? Publishers feel a lot of pressure to embrace the next big thing. But as with every business decision, there are pros and cons.
* Traffic. An obvious benefit: Facebook’s 400 million-plus users are an audience ready to consume, share, and possibly pay for content. (Facebook’s new Credits, while designed for use on Facebook.com, could easily be expanded to third-party websites.) For smaller publishers, adding a Like button is a highly cost-effective way of tapping into the social web.
* Revenue. Facebook is widely expected to launch an advertising network that will sell ads on partners using elements of its Open Graph.
* Engagement. Publishers already know users are far more likely to click on a link emailed to them by a friend. By instantly seeing which articles are popular among their Facebook friends, users are more likely to spend time with content — and time spent on websites is increasingly valued by advertisers over simpler metrics like pageviews.
* Commoditization. Facebook’s Like button moves the conversation off the publisher’s site and sets up Facebook as an intermediary. Facebook offers only limited data about how users interact with a third-party site’s content on Facebook.com.
* Distraction. Publishers understand the content business. Learning the dynamics of the social web is a challenge outside their core competence and can distract from more important business.
* Dependence. Facebook’s infrastructure is a single point of failure. Look at the recent outage of Facebook’s search API, which Facebook representatives dismissed as a minor glitch. Such outages could have far more serious consequences as publishers intertwine their sites more closely with Facebook.
Facebook’s clearly doing something that appeals to publishers — otherwise, it wouldn’t have signed up 100,000 websites so quickly. But publishers — especially larger ones — need to be a bit more contemplative about embracing Facebook’s vision. Remember how thrilled they were when Google’s search engine started sending users their way? That enthusiasm faded as they realized how dependent they were becoming on Google-generated search traffic. With its Like button, Facebook aims to displace Google’s PageRank as the way content gets discovered on the Web. Publishers just need to make sure the graph doesn’t disconnect their businesses.