Facebook splashes out on social networking upstart FriendFeed

[Al-khiyal]

Facebook splashes out on social networking upstart FriendFeed

August 10, 2009 -- Facebook has acquired fellow Silicon Valley startup FriendFeed, in the clearest sign yet that it plans to extend its lead over rivals such as MySpace and Twitter. The world's largest social networking company said it was acquiring its Californian neighbour for an undisclosed sum – believed to be in the tens of millions of dollars – in an attempt to hire "the best engineers". "Since I first tried FriendFeed, I've admired their team for creating such a simple and elegant service for people to share information," said Mark Zuckerberg, the co-founder and chief executive of Facebook. "As this shows, our culture continues to make Facebook a place where the best engineers come to build things quickly that lots of people will use."

FriendFeed, which was founded in by a quartet of former Google employees in 2007 but still has just 12 employees, has gained a devout following of more than a million users with its all-in-one approach to social networking. It allows members to interact with a variety of different websites from a single place, plugging into popular sites like Blogger, Facebook, Digg and YouTube as well as a host of others. While the site's fast pace and overwhelming approach has proved baffling to some, others have claimed its focus on short, conversational messages could also prove a possible rival to Twitter. In recent months, Facebook has made a significant number of changes that aped FriendFeed's approach, including changing user homepages to it what it has called its "real-time stream". The acquisition will bring the company's team of engineers to Facebook – and while for the moment FriendFeed will remain a standalone product, it is expected that many of its systems will be integrated more fully with Facebook in time.

"As my mom explained to me, when two companies love each other very much, they form a structured investment vehicle," said the FriendFeed chief executive, Bret Taylor, in a blog post on the company website. "We've always been great admirers of Facebook, and our companies share a common vision. Now we have the opportunity to bring many of the innovations we've developed at FriendFeed to Facebook's 250 million users around the world." The company's co-founders include Taylor, Jim Norris, Sanjeev Singh and Paul Buchheit – who all found success as engineers in Google, and led products including Google Maps and Gmail. They initially funded the company themselves, before raising $5m funding last year from Benchmark Capital, a Californian venture firm with offices in London and Israel.

What they're saying around the web:

In an interview with Silicon Valley news blog TechCrunch, Bret Taylor said that it was "an 11th hour deal" and that "The basic idea is that Facebook doesn't want to disrupt the product". Blogger Robert Scoble, one of FriendFeed's most evangelical users, said that he was "excited" by the acquisition. "Facebook is aiming its big guns at Google NOT Twitter," he said. Developer Dave Winer – a vocal proponent of open systems such as those promoted by FriendFeed – said that the acquisition was "bad news" for the site's users. Talking to Kara Swisher, Facebook's director of product Chris Cox said that it was important to compete against Twitter, which has stolen a march on both its bigger rival and smaller competition (as well as turning down a reported $500m buyout from Facebook) in the area of real-time information. "I think all this stuff is evolving very quickly and and at the speed of light and there are not many that understand it at a deep level," he said.

[Al-khiyal]

How Facebook's $50 million deal could help it to web domination

August 11, 2009 -- Spurned by Twitter – for which it last year offered a rumoured $500m (£300m) – Facebook has instead this week bought FriendFeed, a social networking site that previously had barely scratched the surface of the public consciousness. The deal appears to be an attempt to confound Google by making Facebook the largest space on the web that the search engine cannot index properly. It will also gain three of Google's former star employees who played a vital role in developing its biggest money-making ideas. "Since I first tried FriendFeed, I've admired their team for creating such a simple and elegant service for people to share information," said Mark Zuckerberg, the co-founder and chief executive of Facebook in the official announcement. It appears that he wants the team – not the site itself.

Facebook is reckoned to have spent around $50m ($15m in cash and the rest in its own stock) acquiring FriendFeed, a social networking site that employs a team of 12 people, of whom eight are former Google staff. Although FriendFeed's users number about 250,000 – a minnow compared with Facebook's 250 million – some had thought it offered a path through the perplexing proliferation of such sites: integrating on a single page whatever you did or posted on Facebook, Twitter or dozens of other sites, and creating a "feed" like Facebook's personal "wall" for each user.

But the real key was the team behind it: Paul Buchheit, Bret Taylor, Sanjeev Singh and Jim Norris left Google in mid-2007, set up FriendFeed in October and made it public in February 2008. They raised $15m venture capital, making Monday, when the deal was done, a fairly successful payday for investors. The founders' track record at Google is impressive and explains why Zuckerberg was keen to get their expertise on board. Buchheit, the 23rd employee at Google, came up with its "Don't be evil" motto. He also developed the prototype of its lucrative AdSense program while developing the Gmail webmail service. Singh worked on Gmail and the Google Search Appliance for companies while Taylor was group product manager for development of Google Maps.

The challenge for Facebook is to stay ahead of Google. To do that, its founder and chief executive Mark Zuckerberg knows that he has both to limit Google's access to Facebook's content – because letting it index all of Facebook's millions of pages would simply give up advertising revenue to the search giant – while making Facebook easier to navigate and search than it is now. And he needs to find ways to serve more relevant adverts, so that he can keep bringing in the money to keep expanding the site.

The FriendFeed team will in effect become Facebook's research team, trying to find ways to implement that improved search and pull people who would otherwise be using external networks – particularly Twitter – on to Facebook. Zuckerberg wants Facebook to be more than a place to talk to your friends: ultimately, he wants it to be an internet in itself where his company knows what is going on all the time.

Searching questions

For Google, that ambition poses a real problem. Its difficulty is that when trying to index sites such as Facebook and Twitter, its traditional method of determining what is important in a search fails. Google gained its ascendancy through its "reputation" system: if, for a given search phrase, more sites link to web page A than web page B, then A will come higher in the search results.

But on Facebook or Twitter, that "inbound links" method breaks down, because a user's number of friends or "followers" is not necessarily a measure of accuracy or knowledge; it's purely personal, or sometimes fortuitous. And the links on those networks are fleeting: a Facebook posting may be popular for a day and then effectively vanish to be replaced in popularity by something similar but different. With better internal searching, Facebook will know what's hot from hour to hour.

Google, unable to index all that content, and unable – using its previously successful algorithm – to work out what's really important, will struggle to keep up. Perhaps it's no accident that this morning it announced a "caffeinated" version of its search engine, offering "the first step in a process that will let us push the envelope on size, indexing speed, accuracy, comprehensiveness and other dimensions".

And Twitter? It is substantially bigger than FriendFeed, but still tiny compared to Facebook. The question will be whether it chooses to side with Google or with Facebook. If enough people start posting to Twitter from a FriendFeed that is incorporated into Facebook, the gravitational attraction of the larger network may become irresistible – unless Google leaps in first.