AM Roundup: Twitch, Facebook’s Clickbait Crackdown & Siracusa’s Reviews

Good morning. Some headlines in tech over the last 12 or so hours that aren’t mobile-specific but are making an impact on the larger tech ecosystem:

Amazon bought Twitch for a little over a billion dollars, $970 million of that in cash, according to Eric Johnson at Re:Code. The video game livestreaming service, which came out of Y-Combinator 2007 class’s Justin.tv, has 55 monthly active users, the brunt of which are free and being monetized off of advertising. However, there’s a growing subscription business that makes up 600,000 users, giving the service a more diversified revenue stream which I’m sure appealed to the folks at Amazon. What was especially interesting about this story is that Twitch was already marked as an acquisition target just days earlier by Google; however, sources at the WSJ say the search giant got cold feet over the last few weeks and pulled the plug on the deal. (edit: Business Insider, citing Forbes, claims it broke down due to antitrust issues)  That gave Amazon the opportunity to sneak in and complete the transaction. So was this a strategic move for Amazon or merely a defensive acquisition to make Google weaker by proxy?

Facebook’s news feed algorithm, EdgeRank, will attempt to crack down on linkbait-y headlines. So the media organizations that make a living off of hyperbolic headlining (BuzzFeed, Upworthy & a host of others) will now be subject to what amounts to informal penalties: their stories will be given less weight by the algorithm and will not show up nearly as frequently in most users’ news feeds. The algorithm will also be giving credence to publishers who post links using Facebook’s now-standard paste-a-link format (which automatically produces the URL/caption) rather than pasting that link within the context of the article itself. You can see examples of both scenarios on Facebook’s press page announcing the changes, which explains it in better detail.

Finally, this was an interesting interview with John Siracusa, he of the exponentially long Mac OSX review. (You can see examples of this at his Ars Technica author page) Some would say he’s swimming against the tide by writing such long-form content but his argument is that people are actually starving for this kind of in-depth analysis, which is hard to argue against considering his reviews actually sell as E-Books on Amazon….and more importantly, sell well.

Why Doesn’t Facebook Want to Brag About Its Billion-Dollar App Ad Business? (@recode)

Facebook isn’t sure that app ads, which showed up out of nowhere, are going to stick around. Developers are buying app ads because they work. But now that lots of people are using the ads, it’s not nearly as cheap and easy to acquire app users this way. And there’s also something about app ads that triggers flashbacks to AOL in the boom years, and Facebook doesn’t want any part of that

App ads don’t fit Facebook’s larger narrative.. Facebook’s goal is ultimately to take big chunks of money that brand advertisers are spending on TV. There are some brands spending money on app ads. But they’re not the ones driving that business, because people don’t use brands’ apps (besides Starbucks, do you have any big brands’ apps on your phone?). So Candy Crush money is great, but it’s not GM and P&G and Coke money, and that’s what Sandberg really wants.

Facebook and Uber Discuss Integration of Car Service Into Messenger (@recode)

That’s why Zuckerberg has held preliminary talks with Uber CEO Travis Kalanick about potentially embedding the service into the Facebook Messenger app, according to sources who have been briefed on the discussions.

“It’s very conceptual, and nowhere near execution,” said one person with knowledge of the situation. “But it’s a direction that Messenger has to go in.”

Smart. Google Maps already added their own integration with Uber. Not to mention WeChat and their integration with e-hail services in China.

Instagram’s “Bolt” Leak Could Be A New Facebook App Or An App Install Ad Test (@techcrunch)

Some Instagram users are reporting having briefly seen a banner advertisement within the Instagram application which pointed to a new app called “Bolt,” described as a “one tap photo messaging” app. Next to the app’s name and description, a download button linked out to a non-functional URL on the Google Play store.

The current speculation being shared around the web is that Bolt is a new application soon to be released by Instagram. However, it also seems likely that the Bolt leak was a test involving an expansion of Facebook’s app install ads to the company-owned Instagram platform.

Would be funny if it were the latter. I’m not sure why Facebook (through Instagram) would produce another Snapchat competitor. Is Slingshot already old news?

Confirmed: Facebook Messenger will eventually do payments (@venturebeat)

Now we have confirmation on why Facebook hired PayPal’s David Marcus: Payments and Messenger will eventually “overlap,” Zuckerberg said during today’s earnings call. When the company first announced it had hired Marcus, the former president of PayPal, the industry took it as a strong hint that Facebook was looking to monetize its messaging app. After all, Marcus joined PayPal after parent-company eBay acquired his mobile-payments startup Zong in 2011, first leading PayPal’s mobile efforts before taking the lead as president.

Everybody kind of knew this was going to happen. The question is whether payments will stay confined to messenger or whether it will eventually branch out to include other Facebook-owned properties (Instagram, WhatsApp etc.)

Americans Spend Average Of 40 Minutes Per Day On Facebook, 1 in 5 of Which Are On Mobile (@techcrunch)

Josh Constine from TechCrunch:

Zuckerberg said that the 40 minutes a day on Facebook account for one in five minutes spent on mobile in the US. Yet Facebook’s CEO sees plenty of room to grow, as he said that Americans spend about 9 hours per day engaging with digital media. Facebook has 204 million monthly users in the US and Canada.

Facebook also downplayed mobile app install ads as a % of overall FB mobile revenue:

COO Sheryl Sandberg downplayed the impact of mobile app install ads to the 62% of Facebook’s ad revenue that comes from mobile and its total $1.66 billion it made this quarter from mobile ads. Her goal was likely to show Facebook’s mobile advertising offering is diverse, and its mobile ad revenue is not subject to instant disruption if, say, Apple and Google started offering app install ads on the app stores themselves.

More FB Earnings call stuff later.

Facebook Launches Save, A Read-It-Later List For Links, Places, And Media Pages (@techcrunch)

Two years after acqi-hiring read-it-later startup Spool, Facebook today launched a basic Pocket competitor called Save. It’s a feature for iOS, Android, and web that lets you store links from News Feed and Facebook Pages for Places, Movies, TV shows, and music to a list where you can view them later.

While Save doesn’t cache content behind links like Pocket or Instapaper, it should give all Facebook users a quick way to stockpile links and content they find so they don’t have to interrupt their News Feed reading flow. As it rolls out over the next few days, Save could let people browse the feed in shorter bursts without worrying about forgetting things they don’t have time to explore right away.

As a heavy Instapaper user, this would be infinitely more useful if Save could then export these items to Instapaper, Pocket or whichever read-it-later app one may happen to use. If it’s confined to Facebook, it has limited utility for me: I’m not going to use two separate services to save links. Instead, I’ll just do what I normally do when I see something interesting in my news feed: click the link, then copy to Instapaper if I don’t have time to read.

If Slingshot fails, can mobile startups start ignoring Facebook’s empty threats?

Of the many things that keep founders up in the middle of the night, one of the biggest may be the looming specter of the “Big Four” as a competitive threat. Founders are taught to have a good answer for the question that inevitably rises in pitch sessions or fundraising excursions: what would you do if Facebook, Google, Apple or Amazon entered your market? How would you react?

Perhaps, if recent history is any indication, the reaction should be: bring it on. At least if you’re a social app and Facebook has you in their crosshairs.

Some Backstory

While most point to Mark Zuckerberg’s apparent $3 billion offer for Snapchat as the first publicly expressed moment of validation for Snapchat’s business model, Zuckerberg actually had his eye on the nascent LA-based startup for some time. The Facebook Poke app, released in December 2012, was the first app built with the intent of dethroning Snapchat’s reign as the pre-eminent ephemeral app. Spiegel himself acknowledged as such, sending a note of congratulations to Facebook:

“Snapchat co-founder Evan Spiegel responded to Facebook’s new Poke app today with the brief statement, “Welcome, Facebook. Seriously.” He declined to comment further.”

Columnist MG Siegler encapsulated the sentiment of this veiled threat:

I also can’t help but wonder if maybe this is a message from Facebook: don’t want to come work with us? Fine, we’ll clone your service in a couple weeks and ship it to a billion users.

What actually happened is that a healthy percentage of those billion users not only ignored the Poke app but continued using Snapchat. In fact, Snapchat’s monthly share actually grew from December to January ’13, leading one to suspect that perhaps Facebook’s focus on the space also helped turn more attention towards Snapchat that may not have been there to start. A rising tide lifting all boats, indeed.

Facebook’s inability to gain any traction for Poke led to the infamous talks of late 2013 where supposedly an offer of $3 billion was made to Spiegel by Zuckerberg that was rebuffed.

The Empire Strikes Back

So after failing to lure Snapchat into the fold, Zuck went back to the well again and had his Facebook Creative Labs team give it another go, this time with an app called Slingshot, an asynchronous photo sharing app that again focused on the dynamics that made Snapchat such a success: ephemerality, spontaneity & customization.

Now we’re only a month into it’s release, so it’s probably too early to write Slingshot off entirely. But the numbers don’t look good. After briefly cracking the top 50 upon launch, the app has tumbled out of the top 1000 and its growth is slowing monumentally.

Which leads us back to our earlier question: is Facebook still an entity to be feared in the consumer-focused, mobile-social landscape?

Leaving aside the question (for a moment, anyway) of whether or not it would have behooved Snapchat to accept Facebook’s offer, it seems painfully obvious that once a startup has established itself as the market leader, it makes it very difficult for anyone to catch them, even if that competitor has billions of dollars at their disposal.

So what does this mean for Facebook? If they can’t entice a valuable startup (think: north of a billion dollar valuation) to sell at the price they want, they will inevitably have to overpay for the peace of mind of not having a competitor chip away at their market share in social.

Creative Labs Holds the Key

But perhaps we’re asking the wrong question. Maybe what we ought to be asking is something much deeper than that. And that is this: Can Facebook’s Creative Labs team come up with software that seriously challenges ascendant competitors on their own turf? Or perhaps more importantly, can they produce experiences independent of both the core Facebook functionality AND that of their competitors? Because that’s what ultimately will get them out of this reactive cycle of producing copycat apps and having to go back to the well (sometimes in vain) to acquire their competitors.

Facebook should be setting up Creative Labs to function more like Google X’s project teams: independent of Facebook and designed to build stand-alone experiences that leverage the creative muscle of the larger company but are ultimately their own projects capable of standing on their own accord.

Easier said than done, of course. And perhaps Facebook has already started along that path. But after missing out on ephemeral media and having to pony up $19 billion for WhatsApp, it’s high time for Facebook to start developing their own moonshots and putting a scare back into smaller upstarts in mobile/social instead of buying everyone else’s. Otherwise, startups will have their answer to the “800 pound gorilla” question, at least relative to Facebook: and that is that the emperor has no clothes.

Why aren’t App Constellations working? (@quibb)

Some fantastic insights here.

Storm8’s Toufeeq Hussain:

The App Constellation strategy works when you have a core resource which can be shared across multiple apps. Slingshot and Poke are attempting to create a new resource (reply-to-view-images for Slingshot and disappearing images for Poke) and hence isn’t really leveraging whats core to Facebook (social graph and shared photos). In the case of Slingshot, even the social graph had to recreated from scratch. So even though these apps get huge media attention when they launch, they slowly slide down the charts as there is nothing holding them up.

Pinterest’s Casey Winters:

You don’t have the advantage of iterating and starting small and working your way up to popularity like most apps do. It’s very tough to launch new apps this way and be successful because a ton of people try the app the moment it’s launched before you have any market feedback. Typically, people try it, discard it, and you don’t get another shot. So what ends up happening is that popular apps buy newly popular apps instead.

These are fair points although in Facebook’s case, the perceived non-utility or “blah factor” of these apps may have just as much to do with their falling down the charts as any perceived connection to Facebook’s core product.

Moreover, in Facebook’s case, I think there’s a more fundamental reason why they’ve chosen to build new experiences that don’t leverage the core Facebook experience: they’re worried about younger generations developing fatigue from the core product. While there are conflicting reports as to just how prevalent this is, these new app experiences, combined with strategic acquisitions of some of the most buzz-worthy apps on the market, give Facebook a way to reach users who may not be interested in FB the product and its leveraged dataset. So unlikely some other companies, there is more behind what they’re trying to do than simply saying “let’s build out an app constellation.”

Facebook Introduces AppLinks Open-Source Initiative

Very cool. Possibly the most disruptive thing Facebook’s done in a long time. The one pain point that remains acute for most users of apps is shareability: how to get that content out of the closed environment of a mobile app into the hands of someone else in the same seamless fashion as has been done in the web for years. This may work to solve that. By getting major publishers to sign off on this at launch, it makes it that much more likely that smaller developers will catch on as well and bake this into the apps they’re building.

Facebook’s decision to spin off Messenger is the smartest, safest choice (@gigaom)

GigaOM’s Lauren Hockenson:

Facebook’s decision to remove messaging from its main app is bound to cause initial pain for users who are resistant to change (and reluctant to toggle between two apps to engage with a single platform), but it’s the smartest, safest choice Facebook can make to keep its service thriving on mobile.

I agreed with everything up until the end:

Features like video messaging, contact exchanging and location sharing are great parts of the WhatsApp experience that would also be at home on Facebook’s Messenger, and could take advantage of Facebook’s video and Maps content to enrich it even further. Furthermore, if Facebook does decide to finally merge WhatsApp with Messenger in the long run, it’s imperative that the company does its best to pluck the best aspects of its acquisition early on to appease loyal WhatsApp users.

Facebook is not merging Messenger with WhatsApp. No way, no how. And definitely not in light of the agreement that the FTC is making both companies live up to with regards to user privacy and data. They both happen to be messaging apps but the two services couldn’t be any different: they each have a different set of users, with different permission settings and different use cases. It makes no sense for them not to be run as stand-alone services and I think like Instagram, Zuck is smart enough to know that WhatsApp has far more value to Facebook the company as a separate service distinct from anything Facebook as a platform comes out with.

Will Facebook buy Secret? (@danprimack)

The first rumblings of Facebook’s (FB) acquisition interest in Secret came last week, with widespread talk that a $100 million offer was on the table. Mike Isaac of Re/Code quickly shot that down, saying instead that the two companies had met to explore how they could “work together.”

Which was the exact tone of the conversation Zuck had with Kevin Systrom at Instagram, Evan Spiegel at Snapchat and most recently, the two founders of WhatsApp. Seems like an offer was very likely made, although obviously not the $100 million that was originally reported. If a purchase does happen, it’ll be another example of Zuck’s strategy of positioning Facebook as a mobile-focused holding company, distinct from Facebook the service.

The Mobile Identity Question: I still think it’s Facebook for now

Another thoughtful post from Ben Evans re: mobile, Facebook & what will ultimately act as the identity on your phone:

I also think that retailers should be thinking about how they can leverage the social platform aspects of smartphones – shouldn’t the Zappos app show you which of your friends have it and let you share shoes directly? Again, doing that well on the desktop would be really hard, but on a smartphone it’s just a tap or two away.

I’m all for it, in fact I had a similar use case pop up yesterday when I was away from my desktop, browsing for tickets to a game on Stubhub’s app on my iPhone. To have been able to easily share a potential seat location with my friend prior to purchase (complete with seating chart visual) in a seamless way, via a card or some other form of atomic content would have been fantastic. Instead, I have to take a screen cap (or several, depending on whether or not I can get all of the pertinent ticket information in one shot), go through my address book, find the person I’m texting, find the screenshot in my photos, pass the screenshot on and hope/pray that it gets their without failing, while I’m at a bar with no wi-fi to speak of.

Of course this also speaks to the larger point Ben brings up in this piece which is identity and how it evolves in a mobile context: who owns it? Facebook? The retailers (or whomever) themselves? Someone else? Of course like Ben, I think there are no winner-takes-all dynamics here. But I also think that it remains tied to Facebook for the time being just because there are already so many other apps & services that utilize it already as a central login and I’m not sure Apple or Google, while they certainly have the leverage, want to get into the larger identity game. I think Zuck has realized for some time now that Facebook as a company needs to evolve beyond Facebook the service as its been traditionally known for the last 10 years. One of the methods for remaining not just top of mind but tangentially connected to the Facebook ecosystem is to allow other companies the ability to leverage its platform to connect people to other native app experiences. The other of course, which Zuck is engaging in right now, is to use the cash at FB’s disposal to make strategic acquisitions in growing mobile-social platforms that allow FB the company to rely less on FB the service to serve up ads. Indeed, there may well come a point where the majority of Facebook users don’t engage with the platform at all, aside from Messenger (which is already its own de facto service); where it simply acts as this central gateway to point you to everywhere else in the mobile landscape. A more seamless version of the old portals (Yahoo, Excite) or AOL’s home screen.

Funny how these all come back around to services that existed a decade or more ago. But hey, everything is a remix, right?

@Facebook Paper: First Impressions

We’re being bombarded with snow here in the Northeast so while I’m waiting to dig myself out, I took some time to download Facebook’s new paper app.

The tutorial is top-notch. It should be the gold standard for any mobile-first startup or really anyone doing an app. Unlike some other reviews I’ve read today, I think the swiping is actually quite intuitive once you get used to it. The tutorial helps a lot in that regard. However, I don’t think it’s that innovative and differentiates itself much from Flipboard, let alone all of the other services for curated news that are out there. I’m going to mess around with it a little more before I make a final judgment. But right now I would say it’s a well-designed service that’s lacking in the innovation department. As I mentioned yesterday, I still feel that there’s a lot more that Facebook can do to create neat experiences beyond just the unbundling of their core services.

You can download the app from the iOS App Store here or just go directly to the storefront: it should be the first app you see under ‘Best New Apps.’

Paper, All The Mobile News That’s Fit To Print (@semil)

Can Facebook, moving forward, effectively leverage the power and scale of its own network to drive its daily active users to new mobile experiences (as they’re doing with Messenger), or will users only temporarily flock to only to abandon them (as they did with Poke)?

The problem for Facebook is that these experiences aren’t particularly new or innovative. They’re simply moving the same experience you already get within Facebook to an isolated, walled garden that only contains that one core feature. I think the separate messenger app worked because, over time, there developed an ever-increasing subset of Facebook users that were only using the service for messaging and nothing else. Give those folks an opportunity to try a messaging only platform (e.g. WhatsApp) and they probably would’ve removed themselves from Facebook entirely. With a separate messaging app, Facebook mitigated that to a large extent, giving them a chance to keep those folks within the Facebook ecosystem.

I don’t know if that’s the same case for the news feed simply because it’s such an inherent part of the overall Facebook experience. If Paper is a more personalized version of my existing news feed, what reason to I have to continue using the main Facebook app? Unless this app is drastically different, it’s almost like their cannibalizing their own experience.

Facebook releases visual news curation app Paper

From FB:

Your Paper is made of stories and themed sections, so you can follow your favorite interests. The first section in Paper is your Facebook News Feed, where you’ll enjoy inspiring new designs for photos, videos, and longer written posts. You can customize Paper with a choice of more than a dozen other sections about various themes and topics—from photography and sports to food, science and design. Each section includes a rich mix of content from emerging voices and well-known publications.

PaperNRP2

TechCrunch’s Josh Constine writes: 

Paper creates this opportunity for Facebook to surprise like a newspaper, but on mobile. It can show content you might have missed by bubbling up public content with lots of Likes or that a Paper editor thinks is brilliant. Sure, friends act as curators of the web at large, but not everyone’s friends share content in the areas they’re interested. I might be the only one of my friends that digs business news or foodie stuff, and Paper could deliver it to me without me having to track down specific Pages to Like.

Yeah, certainly they have the power of the news feed algorithm which they can leverage. But I don’t see this being a game changer in any way. Curated newspapers abound, with Flipboard being the most well-known example. In fact, you can get your Facebook news feed there if you want it, plus all of your other social feeds worked in. Not to mention Zite, Pulse and the more non-visual interpretations of curated news that are specific to mobile (we covered Inside just a few days ago) that are already out there.

Obviously, they’re flexing their mobile chops and I love the idea of a home-grown app development team. The odds are pretty good that they’ll hit a home run somewhere. I don’t see this particular app being the one.

Also, I don’t think the FiftyThree guys are too happy right now.