At the end of July, roughly two months following the opening of Facebook’s social media platform, I wrote that “Closed is the New Open.” I anticipated that Facebook would enable tremendous innovation by virtue of how few options it provided for expression as opposed to how many. In the roughly two months since, developers have harvested the Facebook social graph to create a veritable rain forest of myriad applications.

The original sin of social media may be remembered by future generations as the moment when poke and wall exposed themselves at the Facebook Platform F8 event in SF on May 24, 2007.  Against the backdrop of an open social graph API, these core functions suddently enabled 3rd parties to create entirely new forms of social interaction: “Who do you want to XXX now?,” “Wanna send a XXX to your friend?,” “Who is XXXer?,” “What do you want to draw on your friend’s XXX?”

Platforms

A platform’s success is based on its generosity: how many sustainable applications have been built on said platform?

For an embodiment of a successful platform, cf Dave Morin, the authentic leader of Facebook’s technical platform. When you sit down with him, you are struck by his commitment to openness and providing all applications with a level playing field. He combines the intellect of an economist with the empathy of a sociologist. Any fear a developer may be wrestling with in terms of whether to base their business on Facebook, melts melts away in Morin’s disarming presence. You think to yourself, “Geez, sounds like these guys at Facebook are genuine- the platform is open.”

Applications take what the platform gives.

Applications

The success of an application is based on its ability to consume, to take, information from a platform and interpret it specifically for a user’s benefit. In media futures speak, the Facebook platform exposes an API which creative developers use to infuse their apps with a certain alchemical magic, otherwise known as engagement.

Perhaps the best personification of a successful application is Max Levchin, the intense, “nothing will stand between our engineers and N consumers” CEO of Slide. Slide is the biggest application suite on the Facebook platform. Max wastes little time at conferences educating others, as he seems to prefer notating on a whiteboard about optimizing viral growth paths. If Morin is like Jeff Sachs the world economist– working hard to reassure countries that he will promote free trade– then Levchin is like Dmitri Balyasny, the hedge fund trader who stays under the radar while managing vast money flows.

Advertising takes what the applications give.

Advertising

While apps take from the platform, they give to advertising. The 10-year procession of online advertising models from when banners first appeared in 1995 to today’s behavioral targeting, can be seen simply as an emerging ability for web sites to share more about what they know about their users with the advertisers that want to reach those same users. This is the apogee of what I shall describe as personal advertising, which is all forms of advertising that try to market to you based on who you are, what you have done, and what your commercial intentions may be. All advertising today, more or less, falls under this umbrella.

Recently, I have been working on a different kind of advertising, social advertising. This is when the ads you see aren’t simply influnced by your behavior, but in fact are driven by the behavior of those in your “friend group.” This was never possible before a social network such as Facebook enabled new kinds of applications that could carry social graph information up into the advertising layer of the online media stack. These kinds of ads take the value of rich data about social influence (which is extracted from the applications) and pays this value back to the underlying platform, which benefits in the form of increased CPM. I will have much more to show and tell about social advertising next week at the Web 2.0 conference. One thing that should be self evident is that the only forms of advertising that work inside of social media are social advertisements.

The most desperate attempts that personal advertising continues to make in order to capture my attention not withstanding:

* For a powerpoint-icized description of Social Advertising, see the brief presentation I gave at Dave McClure’s excellent Graphing Social conference this week

It has been hard to write of late. There is so much going on right now in terms of new social media experiences. My wife said it was so “cute” that I was just getting into Facebook now, after it had been open for 18 months already. I snapped back that it was really just opening up now. My spontaneous application promiscuity on its platform is embarrassing. I feel like a teenager with raging widget hormones.

It is a lot of work to express yourself uniquely online. You need to manage all of your various profiles across so many networks. Each network and engine represents a different source of traffic to your personal stream- Google, LinkedIn, WordPress, MySpace, Facebook, etc. Furthermore, they each provide different degrees of control over how your electronic likeness is distributed to others. In Media Futures speak, these are your various API’s (some which you control fully like your blog, others not at all like your PageRank) that together form your unique Algorithm identity in the online world.

This all makes sense, from the 30,000 feet perspective that I typically have written from in the intellectual capital that is New York City. But now that I meet with folks at Grove in the Marina instead of La Fortuna on West 71st street, I am both more engaged in the “real” world of Internet startups but also that much more conflicted by it.

While there are certain voices out here that call for radical transparency so as to keep any unsavory data mongers at bay, those same voices forever remain two cycles ahead of what gets funded and remain marginalized to watch as others commercialize their ideas from two cycles hence. The Internet is a data platform and therefore Internet businesses need to generate cash flow off of people’s data. This is the reality of the multi-billion dollar cookie cocoon that we are all clicking away within.

Still, regardless of how hopeful or hopeless the open Attention ecosystem proves to be, there are early traces of “mass market” Internet services paying Attention to Attention. For example, YouTube now enables me to “broadcast” what I am watching as a form of entertainment for others:

And LinkedIn now enables me to see who else has visited my profile

Granted these are small steps, but they are small steps by large players. Not to mention some truly open Attention thinking practiced by Google in both their Reader and Web History products that I will discuss in a coming post.

The most valuable form of attention is that which you are most reluctant to part with.

This is what you do, privately, that you dont wish to share with anybody else, including your friends, family and maybe even your spouse.  Oftentimes we are even willing to pay subscription fees for content that we wish to consume in complete confidence.     Perhaps this is because we intuit that ad-supported media has a way of capturing information about our attention that we don’t wish to share.

A few weeks ago my friend Scott Heiferman of meetup.com came by to visit on the eve of a board meeting in SF.   I was astounded at the hundreds of thousands of live, real-life group meet-ups he has facilicated from a simple software platform.  Scott has always been a champion of expressing yourself on the Internet, from his first days at iTraffic when he taught his clients how to market links to their own web sites.   Before search engine optimization and marketing, remember, the primary traffic generators were banners.  A few years ago he became fascinated with the idea of putting pictures online, even before flickr shifted their focus from mmorgs to images.   So Scott started a company called Fotolog, which is one one of the most popular Spanish-language sites in the world (even if it is driven by intense social media consumption in Brazil).

Over dinner, Scott said that he had swore off mail and rss clients, and had gone entirely to the Web, courtesy of Google.  I asked him if he had seen what Google was now offering to users of its reader product, in terms of helping them understand which feeds they were paying the most Attention to.  No surprise that I believe that the socialization of Attention data will usher in the next great wave of innovation online; and I shared my enthusiasm with Scott about a world where people were able to (selectively) expose various aspects of their online behavior to others that they trust.  I encouraged Scott to log in to his Google Reader account so he could see what i meant.    He paused for a moment, obviously not willing to share this level of intimacy with me and said:

"You know Seth, I would be embarassed for you to know how much time i spend each day reading Valleywag.”

It was only fitting, then, that I got Valleywagged last week for wading too deep in theory: late Monday night I ruminated over how the identity of a blogger essentially becomes the clicks that lead to the blog ("products of environment" in the always clarifying words of Yardley.ca) and then Tuesday morning I awake to see a rash of new incoming clicks from Valleywag.  Valleywag c’est moi.  Not quite sure what to make of the Transparent Bundles - Valleywag mashup.  Reminds me of when Brecht traveled to Hollywood to write screenplays…

At the First Round Capital dinner at Bibibbo in Menlo Park, I ran into Jeremy Liew from Lightspeed Ventures who leaned over and apologized for not understanding what I was talking about in my last post.  And so there I was, after a day of absorbing Michael Arrington’s perfect pitch lunch address; Fox’s Heather Hardee establish a modicum of  diplomacy with 3rd party widget networks on MySpace; and Google’s Chris Sacca remind us that there is no better place to find meaning in your work than inside of their work; than I was reminded to start making sense.

“Cookies are worth dimes, but profiles are worth dollars”

Scott Rafer’s performance at Web 2.0 in October, where he pitched 10+ Yahoo! execs in a row, may forever cast him as the Paul Revere of this pending revolution:  “Attention is coming… attention is coming!”   This was a transformative event, if only because it put an real value (ie $10+ million) on otherwise invisible data about people reading blogs.   Sure, we have recognized the economic value of explicit social media- user generated videos (ie YouTube), tags (ie del.icio.us) and photos (ie flickr); but this was the first time that the implicit, behavioral contributions of users were valued as an asset.

Eric and Todd started MyBlogLog as a stats package, which dropped a cookie on each reader so as to report better stats back to the writer of the blog.   As blogs have taken off, MBL was able to drop more and more cookies on the machines of users that it otherwise had no relationship with.   This “worthless traffic” of readers would have remained such if it were not for a unique insight by Rafer.   His contribution, having no doubt listened to one of the many sermons on Attention, was to see the cookie as a social media input.   Why not give readers of blogs the opportunity to express their readership to the writers they visit?  In other words, why not enable users to connect their anonymous implicit cookies to their personal explicit profiles?

This was a simple enough proposition but amounts, in my mind, to something new and important:  the reader as activist.  Offering little more than the ability to have your icon appear on the blogs that you visit, MBL turned the cookie from something that exposes you to something that expresses you.    What had always been limited to passive behavioral data for publishers and advertisers to target against had now become something different- a continuous stream of active Attention gestures.    As Scott recounted, “They [Eric and Todd] were gathering implicit data before I got there.  We added explicit, public rendering of that implicit data."

Yahoo!’s decision to purchase MBL makes sense as a means of converting some of their 150+ million  “worthless” page views into opt-in Attention profiles.  Already, groups are starting to form within the MBL communities that recognize their own opportunity to “vote with their feet” which in this case would be more akin to marketing through their clicks.   For example, just think of small groups of members, organized around a cause or particular passion, descending en masse upon a site.  The widget expressing the last 10 readers suddenly becomes a powerful tool for asserting a certain position.  First comes the inane home town fans click-pack with each user wearing a Cincinnatti Reds baseball hat in the picture on his profile; then come the more interesting political agendas and petitions.

One thing is for sure- behavioral targeting companies such as Tacoda, Revenue Science and Blue Lithium have no choice but to align themselves with the user in control.  In the wake of MBL/Yahoo!, these behavioral networks can no longer sell advertising through publishers without giving some real functional or economic benefit back to the the users creating the behavior to begin with.    And because these networks dont have a profile-based relationship with their audience, they have to start from scratch.

Please allow me to introduce myself

Im a man of wealth and taste

Ive been around for a long, long year

Stole many a mans soul and faith…

Pleased to meet you

Hope you guess my name 

Rolling Stones, Sympathy for the Devil

Enabling readers to express their unique identities with minimal transaction costs is what the best social media services are able to achieve.  The vast majority, however, fall on either side of this:  either they are too sheepish to let their users know how much they really know about them, or they are too presumptuous and excite privacy hysteria.  One young entrepreneur who has been building fair-trade Attention services put it best when he said:

I’ve often wondered if and when users will become aware of the value their data holds, and whether they’ll demand ownership of it, or simply throw a fit that such data is being mined.