Like Dropbox, Google’s storage service, called Drive, is a response to the growth of Internet-connected mobile devices like smartphones and tablets and the rise of “cloud computing,” or storing files online so that they can be retrieved from multiple devices, these people said.

Drive allows people to store photos, documents and videos on Google’s servers so that they could be accessible from any Web-connected device and allows them to easily share the files with others, these people said. If a person wants to email a video shot from a smartphone, for instance, he can upload it to the Web through the Drive mobile app and email people a link to the video rather than a bulky file. [The Wall Street Journal.]

The question we should all be asking: How is it that Google, with its vast army of smart people and billions of dollars, couldn’t build a cloud storage drive over past five years? Why did it fail in its previous attempts and how is it that a company whose core competency includes “infrastructure” has failed to build this very basic cloud offering? And most importantly, how can a company that is intimate with the concept of cloud and owns Android, the mobile computing platform, not be able to understand the strategic importance of an “online storage drive”?

What’s Wrong With Google?

The answer for those questions lies in what I see is a growing problem at the Mountain View, Calif.-based search giant — me-too-ism. Saying that won’t win me any fans — certainly not amongst the Google faithful — but the fact remains that with the exception of “search & advertising” & “communication” — its two areas of core expertise, Google has been unable to predict where technologies are going to lead the society (and yes that does include business.) Android? That came through an acquisition and that too at the insistence of one of Google’s founders.

Where Google does have a stellar track record is web infrastructure and innovations in network design and architecture. And that is because, infrastructure is Google’s DNA. The companies, I have always maintained, have a DNA and it is what makes the companies self-aware, which in turn defines how they view the world, how they compete, hire people and most importantly build products. Google has spent a lot of its corporate energy chasing Facebook instead of focusing on what was really important — not only its present, but its future.

Social as it stands today is a battle between two companies — Facebook and Twitter. Google’s quest to become social is making it do some unnatural things. Instead, Google should have been figuring out ways to use its infrastructure and delivering magic on the Android phones. Some good examples include Google Voice on Android or Google Mail on Android.

The reason they are so impressive are because they leverage Google’s awesome infrastructure. A virtual online storage drive should have been top priority for the company. Why? Because it would have enhanced company’s Android experience. Many of Google’s customers — handset makers like HTC who are using Android are turning to Dropbox to add more space to the phone.  In an interview  Dropbox co-founder and CEO Drew Houston told us:

Dropbox can help deliver on the “connected anywhere” promises that have been around for years, but that he doesn’t think have truly materialized with regard to data. But once consumers experience having their “stuff” with them wherever they are, it will be “like the first day of the rest of your life,” he explained, like when we first were able to boost productivity by using e-mail and other applications on our phones.

A month later, when Houston and I chatted on stage at our GigaOM RoadMap conference in November 2011, Drew hinted that the company was looking beyond what was simply storage.

Dropbox will also be able to store not only a person’s photos but the metadata about that photo, the location information. “All of these things become possible. We can index all that metadata in the pictures and then tell you where the picture is taken, and maybe give you all the pictures taken within ten mile radius.” This sounds like a lot more than storage.

Google, too, should have been looking at its “drive” from the perspective as Dropbox long before now. It would have allowed the company to get better traction with app developers and at the same time differentiate from its biggest mobile rival, Apple.

Google is really good at finding information and using the “drive” as a hub to connect to various services, and then finding information on top of that should have been a primary focus for the company. Instead, it went chasing Facebook and social. Much like Microsoft kept chasing and chasing and chasing opportunities in search and advertising.

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For anyone who loves taking pictures, the arrival of digital photography has been a huge benefit: for one thing, even the cheapest smartphone has a camera in it whose quality would have seemed almost unimaginable a decade ago. The result is that it is easier than it has ever been to take a good snapshot, but it also means we are drowning in digital photos. And instead of taking up a few shoeboxes in the corner of the basement somewhere, they are piling up on memory cards and hard drives and DVDs, as well as on dozens of incompatible photo-sharing services and social networks. Where are these digital memories going to be when we need them in the future?

I have been thinking about this ever since I got my first digital camera (which had a then-impressive resolution of 1.2 megapixels), and it comes to mind every time I try to organize all the photos I have taken across multiple computers and devices and services. I was reminded of it again on Thursday when I attended the funeral of an old family friend. As with so many life events, there were stand-up photo galleries put together by his daughters and other relatives, with hand-picked prints from his early years: his wedding, his children when they were babies and so on. Afterward, there were family albums to look through, each with treasured (if slightly yellowing) photos of special moments.

Will our digital photos be there when we want them?

There was a DVD of some photos as well, but it wouldn’t play on the funeral home’s DVD player for some reason. That got me thinking about the technological aspect of trying to retain our digital memories — the need to transfer photos and video from incompatible format to incompatible format, from old memory cards or Minidiscs to new ones, the fears about DVDs deteriorating over time until they become unreadable. Printed photos may get yellow, but at least you can still make out what is in them.

Of course, we should all be printing out special photos that we take and storing them carefully so that we will always have a copy. But who has the time to do that? The same people who are scanning all of their old printed photos and saving them somewhere other than a shoebox, presumably. There are services that will do this for you, of course, but that also takes time and is expensive. Like many people, I try to back up my pictures to an external hard drive, and I also use Flickr as a backup. But how do I know Flickr will still be around in 20 or 30 years? Facebook clearly wants to be the main repository for your digital memories with its new Timeline view, which looks better when you upload all of your photos, and it is a useful feature. But what happens if Facebook becomes the next AOL or the next Friendster? Then you have to download all of those photos (if Facebook still has them) and find somewhere to put them.

That is the other downside of digital photography. At the funeral I attended, there were a handful of photos of special moments, and it probably didn’t take all that long to pick them out, even though this friend took a lot of pictures during his life. But with film cameras, most people would wind up with perhaps a few dozen photos during the course of a year, taken at birthdays, on holidays, etc. Now it is so easy to take pictures that it is difficult to stop — I went on vacation for a couple of weeks and took over 300 photos. More than 250 million pictures are uploaded to Facebook every day.

Easier to take but harder to find

Not all of those photos are worth keeping, of course, but when storage is so cheap and sorting through them takes so long, why not just put them all somewhere and forget them? And so they pile up, gigabyte after gigabyte. Some recent research found that 39 percent of those surveyed couldn’t find digital pictures of a recent life event, even one that took place less than a year earlier. Instead of helping us remember the key moments in our lives, digital photos seem to be making it harder.

Apps like Instagram and Path, both of which I love, actually make this problem worse instead of better in some ways. They are great for sharing quick snapshots of a place you are visiting or someone you are with or what you are eating — and you can share those easily to Flickr and Facebook and Tumblr and lots of other platforms (more than 26 photos are uploaded to Instagram every second). But do you want to save all of these for a lifetime, along with the ones you took of your new baby or your sister’s wedding? Probably not. So again, there is a filtering problem.

These problems are compounded when it comes to video, of course: It is just as easy to shoot, takes even longer to process or edit, takes up more space, and yet is likely to be just as ephemeral in nature. And that is not to mention all the videos that are trapped on Hi-8 tapes and mini-DVDs and other formats.

In the past, photographs were treasured because they were so rare: It took so long to make them and the process was so expensive that having one meant a lot. It was like a moment in time had been frozen forever, and the way those photos could trigger memories was unlike almost anything else. Now photos are just another form of digital detritus; there may be treasures in there somewhere, but we don’t have time to find them, if we can even remember where they are. Photography seems to have become more ephemeral, less permanent — whether that is a good thing or not remains to be seen.

Post and thumbnail photos courtesy of Dear Photograph and Flickr user Leon Rice-Whetten

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Screenshot of Foodie (click to enlarge)

Glam Media, the online media company that produces content and serves ads for a primarily female audience, on Thursday is launching a new website Foodie.com, its first foray into the culinary space. Social networking features will be built into the new Foodie website, making it the first site from Glam that deeply incorporates the technology acquired when it bought Ning in late 2011.

A launch with great expectations

In an interview this week, Glam CEO Samir Arora said he expects Foodie to very soon become one of his company’s top most highly trafficked sites. “One year ago, we discovered that our top ad category in revenue during the first quarter of 2011 was food. We didn’t even have a dedicated food category at that time,” Arora said. “That really drove us to sequence Foodie as an important launch.” Glam expects Foodie.com to attract 10 million monthly uniques soon after it debuts — a very impressive draw by most standards.

At launch, Foodie will feature content from prominent chefs, restauranteurs, established food critics and bloggers, and ads from companies including Betty Crocker and Dannon Activia. The real key news about the site, though, is that readers of Foodie will be able to fill out complete social profiles to let them interact with each other and Foodie’s content creators and brands. Glam describes Foodie.com like this: “A full social network for consumers to directly discover, connect and follow top foodies.”

Still an appetite for social media

But will people really want to create yet another social media profile? Glam certainly thinks so. According to CEO Arora, that’s because sites like Facebook are just too general to help us connect with our individual interests like food. The people with whom you’re friends on Facebook may not be the same people with whom you’re interested in sharing recipes. “When I connected my Facebook graph to my Yelp account, I found that I have nothing in common with my friends in terms of our restaurant tastes,” he said.

It’s a fair point — as popular as general social networking sites have become, people still go to specialized content producing sites on the web. Facebook’s Timeline and Open Graph is trying to turn Facebook into a central place where people can customize their ideal web experience content and all, but perhaps people will still want to keep separate online niches where they deal with people who align with them along very specific interests. Foodie.com wants to be the place people go to read and connect with like-minded people about all things culinary.

Food may be just the beginning

Arora said this push toward social was always the direction in which Glam planned to go, and that the Ning acquisition which closed in December accelerated the process. “Otherwise, if we had to build it ourselves, we’d probably take five years.” If Foodie is the success it’s expected by the company to be, other verticals in Glam’s portfolio could go the social route as well.

It’s an ambitious move to make, but Glam already has such a massive audience — 220 million unique visitors a month, 90 million of them in the United States — that if anyone besides Facebook is going to turn itself into a totally social content web destination, it’s them.

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Facebook CEO Mark Zuckerberg

Facebook on Wednesday updated its S-1 document to the Securities and Exchange commission for its planned initial public offering, and it’s a veritable data dump of new information about the social networking company. The good news is, we’re digging through it so you don’t have to. Here are some of the more interesting tidbits disclosed in this latest regulatory filing:

• The rent is really dang high.You think you spend a lot of money on rent? According to the new filing, Facebook’s new Menlo Park, Calif. campus is costing the company well over $1 million per month for the next 14 years (the 15 year lease began in February 2011.) The company’s monthly rent will actually go up as time goes on, from $1.175 million/month now to $1.9 million/month in 2025, because ostensibly Facebook’s revenue will grow at the same time. The company is, however, getting a million square feet of space for that money, so in context it’s not that ridiculous.
  

  Graph representing Facebook's property rent (click to enlarge)

• Facebook controls even more of its data center strategy than you think. A couple years ago, rumors started buzzing about how a Delaware-based company called Vitesse was behind the planning of Facebook’s Prineville, Oregon data center. In 2011 Facebook eventually came clean with the details of all the ins and outs of the massive data center as part of its Open Compute Project, and now it’s totally clear that from day one it has been completely in charge of the effort: Vitesse is actually a wholly-owned subsidiary of Facebook, according to the newly filed S-1 documents.
• Facebook wears the pants when it comes to Zynga. The updated filings included tons of information about Facebook’s relationship with Zynga, the social gaming giant. Even though Zynga has been asserting its own independence from Facebook, the details of the contract between the two companies shows that Zynga can never quite become a standalone business if it wants to maintain ties with the social media king. These clauses are especially key:
  

  “All Zynga Users must have a valid (e.g. real; not suspended) FB account. Zynga will require all Zynga Users to connect their Zynga account to their FB account. In addition, Zynga will require all Zynga Users to be logged-in to their FB account with an active session to use or access any Covered Zynga Game, Zynga Mobile Game or any Zynga Property” [except in limited situations.]

  and

  “Zynga Users who are not Facebook Users must create a FB account.”

  and

  “Zynga may not prompt any users on the Facebook Site to create, log-in with, register for or otherwise use Zynga Credentials on the Facebook Site.”

• Zuck, Sheryl Sandberg, and the other execs have it pretty good. Of course, you already knew this. But the new S-1 shines a bit more light on the compensation packages of Facebook’s executive team. Mark Zuckerberg’s base salary for 2012 is $500,000 (which was shown in the initial S-1) and the new filing shows he is eligible for a semi-annual bonus of 45 percent of that salary based on his performance; COO Sheryl Sandberg’s salary is $300,000 and she is also up for the 45 percent twice yearly bonus. They each get 21 days paid vacation annually (this is on par with the rest of Facebook’s employees.)

We’ll continue to pore over the documents and will update this story with any more gems we come across. And keep checking in at GigaOM for our full Facebook IPO coverage.

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Updated: Path and Pinterest are probably two of the hottest social services right now, racking up millions of users and generating an ocean of favorable coverage. But both have gotten tripped up by the same thing that has made the social web a minefield for both Facebook and Google: namely, decisions that put their interests ahead of their users and a lack of disclosure about what was going on behind the scenes or under the hood of their services. Will these missteps spell doom for either company? Probably not. But the backlash is a welcome reminder that for social apps, the trust of users is not something to be toyed with.

Path, a mobile photo-sharing app that expanded to become a full-fledged mobile social app when it relaunched a couple of months ago, was co-founded and is run by Dave Morin, an early Facebook staffer. You might think the privacy blowups that the giant social network has experienced over the past couple of years would make Path pretty sensitive to handling user data properly, but that doesn’t seem to be the case: Earlier this week, controversy erupted when it was revealed that Path was uploading all of its users’ contacts to the company’s servers, something many users have taken as a breach of their privacy.

It may not seem like a big deal, but you should still disclose it

In public comments on the blog post that first brought this to light, Morin apologized and said that Path will fix the problem in an upcoming version by requiring users to explicitly opt-in. He also tried to defend the company’s behavior by saying that it is the “industry best practice.” As a commenter on the Hacker News thread about the issue put it, however, a better phrase might be “industry lowest common denominator.”

Update: Path’s CEO later apologized in a blog post for the way the service handled users’ data, and has said that in an attempt to make up for its mistake it has deleted any address data that was stored on its servers.

It is true that other apps and services also do this, including WhatsApp, Beluga, Hipster and others, and the ability to do so has been a part of Apple’s iOS since 2008. Others have also noted in Path’s defense that Apple allows apps to upload contacts without explicitly asking users for permission – something that it doesn’t do for other data such as a user’s location. And it is also true that importing a user’s address book makes it a lot easier to scan for friends who are already on Path and that this can be a benefit for a user in the long run.

That said, however, the anger and shock that Path’s move seems to have triggered among many users — some of whom say they have deleted the app and will never return — makes it pretty clear that even if this behavior has benefits for users, the lack of disclosure about what Path was planning to do is a deal breaker for many.

Pinterest, meanwhile, did something completely different to upset some of its users, but the underlying lesson is the same: The company — which says it has built up a massive user base of more than 10 million in just two months — is a content-sharing service where fans of different products and websites can post (or “pin”) their favorites. Since popular posts can drive a lot of traffic to websites that sell these products, Pinterest has been adding affiliate links that generate revenue for the site when users click on them.

Lesson: Never take your users for granted

As many of the company’s defenders have pointed out, this behavior makes a huge amount of sense for Pinterest, since it is providing a free service and needs to generate revenue somehow. But as with Path’s move — which also makes a lot of sense from a purely utilitarian point of view — Pinterest failed to disclose what it was doing to users or at least failed to make it obvious. Perhaps the company thought (as Path likely did) that users wouldn’t mind. But it turns out that plenty of them do mind.

Path’s decision seems the more surprising of the two, if only because there are so many examples of similar undisclosed or opt-in-by-default moves that have triggered a huge amount of backlash, and not just for Facebook but for Google as well. The search giant’s engineers also clearly thought that merging people’s email contact lists with their new Buzz service was a great idea — after all, it was the most efficient way to populate a user’s follow list. But many users disagreed, and so did the federal government, and the resulting backlash arguably helped kill Google’s first attempt at a real social service.

The lesson here is that for social apps, the trust of users is paramount, and the best way to maintain that trust is to be as open as possible about everything that is occurring, particularly if it involves a user’s personal data. Whatever you are doing with it may not seem like a big deal to you, but better to be open about it than have it revealed by someone else, at which point you look sneaky. As Craigslist founder Craig Newmark has put it, “Trust is the new black,” and it never goes out of style.

Post and thumbnail photos courtesy of Flickr users Lars Plougmann and Christian Ditatompel

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As Facebook draws close to the billion-user mark and a $100-billion market valuation, the giant social network’s dominance has reignited old fears about the decline and fall of the open web. John Battelle argues that we need a manifesto for the truly open Internet in order to rally the troops, but blogging veteran Robert Scoble says it is too late and he has already given up the fight. And longtime technology watcher and investor Esther Dyson says we need to remember that the Internet is prone to cycles of open vs. closed. In the end, the only thing that determines whether a closed model succeeds is the willingness of users to put up with its restrictions. For Facebook, that is both its biggest strength and its biggest weakness.

Not that long ago, the open web seemed to be the default for most users: America Online, one of the longest-lasting of the old walled-garden portals, was mostly an afterthought, used only by older consumers who were tied to its dial-up business (a business that even now continues to provide the lion’s share of AOL’s declining profits). Google was the model of the open web, with its objective algorithms and its commitment to sending users away instead of trying to keep them on its site. Websites and blogs were run on open platforms like WordPress (see disclosure), TypePad or Blogger, and anyone could link to anyone.

Then along came Facebook, which took the ultimate “gated community” approach right from the outset by restricting access to university students. As it grew and expanded, it maintained this walled-garden strategy by making it easy for users (and their precious data) to get into its network but much harder for them to get out — something Google highlighted in an attack on the social network’s data-hoarding policies. And the trend has only continued with the rollout of Facebook’s frictionless-sharing apps, which effectively make the network the hub of personal activity of all kinds, even newspaper reading.

If the garden is appealing, the walls don’t matter

What is the benefit for users that makes them so eager to place their entire online experience in the hands of a single company? The same as it was with America Online: namely, the fact that it provides a friendlier, safer — and ultimately easier to use — version of the Internet for non-geeks. As John Battelle puts it:

The open web is full of spam, shady operators, and blatant falsehoods. Outside of a relatively small percentage of high quality sites, most of the web is chock full of popup ads and other interruptive come-ons [but] in the curated gardens of places like Apple and Facebook, the weeds are kept to a minimum, and the user experience is just . . . better.

For open-web advocates like Dave Winer, there is almost nothing to like about this phenomenon — or, to shift the spotlight from Facebook for a moment, the fact that a powerful, global real-time information network like Twitter is controlled by a single corporate entity. The risks for Twitter users have been highlighted by the company’s announcement that it will censor tweets if asked to do so and by attempts on the part of countries like Brazil (and even the U.S.) to force the company to either turn over data or block specific accounts that they disapprove of.

Open alternatives such as Status.net and the would-be Facebook competitor Diaspora exist, and they have attracted support from the hard-core geek community. But they have made virtually zero impact on the vast majority of Internet users, who seem more than happy to disregard all the warnings about proprietary models coming from open advocates, including the man who invented the World Wide Web.

If there is one thing that we can learn from the runaway success of Apple, it is that the vast majority of users don’t particularly care about abstract concepts like openness or metaphors like walled gardens. What they care about, as Chris Saad of Echo and Dataportability.org noted recently, is that the products or services that matter to them about are easy to use and provide some benefit to them. In effect, they are willing to make a trade-off between the virtues of data portability or the downsides of having a single entity control their experience and the benefit they get from that product or service.

If you stop being useful, users will revolt

If you have a really attractive garden, users are more than happy to spend time there without moaning about the walls or the gates. In a nutshell, that explains Facebook’s dramatic rise: It has made connecting with friends and sort-of friends so easy and provided so many obvious benefits — photo sharing being one of the main ones — that most users have been blissfully unconcerned about giving so much of their personal data to the network. And while some argue they should be paid for their membership, others clearly feel that the trade-off is more than worth it.

So far, so good. But the looming risk for both Facebook and any other provider that wants to control the output of its users — including Twitter and Google — is that even complacent users can become militant when the service they depend on mistreats them in some way. We have seen flashes of that whenever Facebook changes its privacy settings, when Twitter changed its censorship rules, and even when Google started fiddling with its search results to promote its own social network instead of remaining objective about its content. And we see flashes of it when Facebook blocks content, as it has with breast-feeding photos — causing demonstrations by outraged user groups.

While none of these tremors has turned into a seismic shift so far, that doesn’t mean they won’t. AOL seemed so dominant in its time that it managed to convince Time Warner that it was worth $160 billion, in what is still one of the most disastrous technology deals of all time. But it faded because users realized that the benefits of being inside its garden were far outweighed by the downsides and that the open Internet wasn’t so bad after all. Will users eventually come to the same conclusion about Apple or Facebook — or even Google?

For social networks and tools like Facebook and Twitter, the relationship with users is an even more fragile one. Facebook’s 800 million users may seem like an unassailable moat around the giant social network, but if enough of them decide they are better off elsewhere, Facebook will become a ghost town. Twitter could easily meet the same fate. As Mark Zuckerberg prepares to count his billions, he needs to remember that in the end, it’s not open or closed that wins — it’s useful and not useful.

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But while the Google founders went on to become dotcom billionaires at the head of one of the Internet’s most powerful companies, Marchiori turned down the offer of a job with them and returned to Italy to work on his own projects.

And today, finally, he unveiled what it is he’s been tinkering away on all this time: a social search engine called Volunia that he claims represents the “third generation of search.”

And what is it? Well, that’s hard to tell.

Not only is the service not yet open to the public — although Volunia promises a hundred thousand users will be let in today — but the hour-long press conference to launch the site was held entirely in Italian, struggled with technical problems and had very little in the way of actual demos to show us what the service really did.

The best visuals were a handful of ropey screenshots that suggested little about what was on offer. Most reports seem to repeat the rhetoric without offering any significant insight into how the site works.

So given the lack of hard information, here’s what we have so far:

Volunia is a search engine that indexes and maps out the web and then ranks it through a mixture of algorithms and the opinions of visitors. Marchiori alluded to the fact that it was intended to be like GPS for the web — but said it does not use semantic technology.

At the same time, Volunia provides a place for social interaction in a sidebar that lets users talk to each other and to the owners of the websites they are visiting; a service that seems to be half chatroom, half SideWiki, the universal commenting engine introduced — and then killed — by Google.

And that, for all of the words, seems to be the heart of it.

It’s a search engine that lets people talk to each other while they surf around the web. Marchiori was keen to stress that he wasn’t trying to take Google on, and intended to simply offer a new way of doing things, but the comparisons will inevitably be made.

I’m not going to pass judgment on the product itself, however, not least for the simple reason that I haven’t seen it in action.

But there are a few conceptual problems I have with the project as it stands.

First, there is the simple question of whether it can live up to its own hype. The approach taken so far leaves it wide open to criticism of over-promising, with Volunia doing some serious PR ahead of the launch, mainly with the Italian press and odd little pre-announcements. Such bluster usually end in disappointment — a perfect reason why you should never launch your startup in the press. Who remembers Cuil, the site that promised to take Google head on but turned into a $33 million turkey?

Second, the idea that social search has not been done is only true if you have a very particular view of what social search is. Google and Yahoo have talked a lot about it over the years — and Google has finally got around to seriously implementing that vision with its awkwardly named Search Plus Your World features. But the reality is that social search is something different today than it was to this previous generation of web companies. Right now, Facebook and Twitter are social search, because they are where people interact.

That doesn’t look much like traditional web search — certainly not the sort of search engine that Marchiori has spent his life building — but it’s hard to tell whether Volunia is a step forward or a move back.

And third, regardless of how good your service is, does it work to compete like this? Google has slugged its way to the top, and seems more likely to be unseated by antitrust investigations than straight rivals like Bing. Facebook, meanwhile, is preparing to fill up its coffers from an IPO that will probably make it unassailable in the social space as we understand it. Once somebody has won a market, is it worth fighting them on their own ground — or is it better to simply try and work out where the next big developments online are going to come from?

The Volunia team, backed by serial entrepreneur Mariano Pireddu, may be playing down their attempt to revolutionize the world. Marchiori explicitly told journalists at the press conference “not to expect the moon”.

But evidence suggests they think they can make a significant impact. By my count, judging by the various landing pages, the site appears to be launching in a dozen languages, including English, Chinese, Spanish and Japanese. That means it’s either ambitious or covering as many bases as possible — or both. It is not something that can be dismissed as merely an experiment.

Reaction online seems mixed at best. To me, everything from Volunia so far seems to suggest it’s trying to solve a problem that nobody needs to solve right now. I can’t wait to see it open up and find out whether I’m right or wrong.

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An image from the SodaHead poll results (click to enlarge)

Facebook is in the process of converting all user profiles to the new Timeline design. But according to a new poll, the majority of people aren’t so keen on the new look.

Seventy percent of respondents to a poll of 1,900 people held by online opinion site SodaHead.com said they did not like the Timeline design and that Facebook should get rid of it. Just 20 percent of respondents liked Timeline, and 10 percent said they did not have Facebook profiles.

And it turns out that the older people are, the less they like the new design: Only 10 percent of people over 65 liked Timeline, compared with 34 percent of people age 18 to 24.

That won’t come as a big surprise to the folks at Facebook, since it lines up with the research the company itself did before Timeline was announced this past fall. At a press Q&A during the f8 conference, in September, Facebook CEO Mark Zuckerberg said that older users tended to respond more negatively to Timeline than younger ones. But, he said, that would not stop Facebook from making big changes: “The world is moving quickly, and we want to be innovative and try new things,” he said at the time.

Either way, it seems that Timeline is here to stay. With the Open Graph API, scores of third-party developers have invested significant time and money into building apps that work within the Timeline interface. So now it is not only Facebook that is tied to the new look but also an entire ecosystem of other companies. Besides, this is certainly not the first time Facebook users have reacted negatively to a change in the site’s look, and it seems that by now the people who run the social networking company have learned to ride out the initial jeers.

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Marc Andreessen

There’s no question that Andreessen Horowitz, the venture capital firm headed up by Marc Andreessen and Ben Horowitz, has become a major force since it was founded back in 2009. The young VC firm has funded some of the best and brightest companies in the tech industry: Facebook, Twitter, Zynga, Groupon, Airbnb, Box, Fab.com and Pinterest, to name just a few. And this is just the beginning — Andreessen Horowitz just announced it has raised $1.5 billion in fresh funding to invest in even more startups.

I talked to Marc Andreessen this week to get his thoughts on Silicon Valley, the startup ecosystem, and where the larger tech world is headed in 2012. Here’s what he had to say:

Silicon Valley is still tech’s ground zero

“Our firm is very Silicon Valley focused. Now, we’re not religious about it. We’ll go far and wide to find the best companies and fund them. But there is a magic to Silicon Valley. It’s a lot like Los Angeles with film, New York City with finance or fashion, and Washington D.C. with politics. A lot of people want to work where there’s a critical mass of other people in their field; it’s like a natural force of gravity.

Because the best people in technology keep coming to the Valley, there tends to be a self-renewing property to it. It’s become a place where great technology franchises have been built repeatedly. I would love for there to be a dozen Silicon Valleys around the world. But it’s a very hard thing to replicate.”

When running a VC fund, it pays to walk the walk

“Closing this latest [$1.5 billion] round from our investors was a pretty straightforward process. The key thing is, we’re really focused on the alignment of our interests with the people who invest in us. Each of us at Andreessen Horowitz has a significant personal investment in the firm ourselves. We each pay full management fees and carried interest, so we’re exactly side-by-side with our investors.

We also have a hard commitment that none of our partners will make private technology investments outside of Andreessen Horowitz — you won’t see me investing in a startup as an individual. Our investors really like that, it makes them feel that we’re real partners.”

Tech should learn the language of Washington

“Ever since I arrived in the Valley, there’s been a debate about how the tech industry should approach government and legislation. There’s one school of thought that says we should just ignore Washington and build the future on our own, the idea that we’re going to invent our way out of any problem that comes up. Then there’s the other school of thought, that it’s very important to engage with Washington on their terms, because the industries that are threatened by technology are very good at lobbying. I’ve always been more in the second camp.

Technology is very important and it has a big impact on the world. Politicians are naturally going to want to be involved in something that is that important, and they’re going to try to make laws about it. For every exciting advance we make, there’s someone on the other side that is threatened by it. The oldest and most entrenched industries are lobbying like crazy, so for the tech industry to not participate is just handing the ground to them.

On top of the traditional methods, we can also do new stuff like the SOPA/PIPA blackout, which was a whole new form of engagement and protest. I know that a lot of people in Hollywood were absolutely shocked at the effectiveness of that.”

A startup shakeout is coming, but that’s OK

“There has been a lot more seed funding in the past two to three years. In terms of our own self interest as a VC firm, we want as much seed funding as possible — it presents us with a lot of great opportunities to evaluate for a venture round.

There is going to be a shakeout at the seed stage. A lot of companies will come up for Series A funding at some point, and there are just too many of them to really raise what they’ll need. But that’s not a bad thing. It’s a very small amount of funding they’ve taken on so far, and nowadays a lot of them will have the opportunity to sell as a talent acquisition. It’ll work out fine for them. In the long run, imagination tends to be rewarded, not penalized.”

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In a blog post at her eponymous website, Arianna Huffington has provided some numbers that describe the growth of the news network over the past year — a year that coincided with its acquisition by AOL for $315 million — and more than a few of them are eye-popping. At a time when some newspaper websites are happy to get page views in the tens of millions in a month, The Huffington Post racked up more than a billion page views in December. And while page views can be inflated, some of the site’s other metrics show that if there’s one thing the team that build the HuffPo understands, it is how to get reader engagement to hit levels that other news sites and publishers can only dream of.

It should be noted that AOL started redirecting its existing news portal site to the Huffington Post site in May, which undoubtedly helped boost many of the traffic numbers (although it’s not clear just how many visitors the AOL News site was getting when it made the switch). That could help explain why unique monthly visitors — a metric that many websites prefer over raw page views — climbed by almost 50 percent to 36 million. But in any case, that puts the site ahead of the New York Times, and not far behind the Daily Mail, the largest newspaper site with 45 million unique visitors a month.

Not the web’s largest news site, but it’s getting there

The Huffington Post isn’t quite the largest news site on the web just yet — Yahoo News says that it gets more than 80 million unique visitors a month, and more than 5 billion pageviews, and CNN gets about 73 million uniques a month. And there are some other massive websites who are on the fringes of the media business: Reddit recently crossed the 2 billion page-view mark, and says it gets about 34 million uniques a month, and Tumblr said recently that it gets over 15 billion page views a month, and reaches about 120 million users through its network of 42 million blogs.

Apart from the monthly unique visitor or page-view figures, however, some of the most fascinating numbers from Huffington Post are the ones around reader participation, including more than 6 million comments in the past month alone, and more than 1.4 million referrals from Facebook in a single day. Some of the other numbers include:

• Comments on a single day: 253,331 (Jan 25, 2012)
• New commenters signing up per day: 5,500
• Social referrals in a month: 21.6 million (December 2011)
• Facebook referrals in a day: 1.4 million (January 4, 2012)
• Blog posts in last year: 61,688
• Stories published per day: over 1,000

One of the secrets to the site’s massive traffic numbers is probably the sheer volume of stories and blog posts that Huffington Post publishes — over 1,000 every day. Many of those, of course, are likely to be the kind of “aggregated” story from another publication that has drawn so much criticism from traditional news entities such as the New York Times. And in many cases, at least judging by the numbers above, the Huffington Post is probably getting orders of magnitude more engagement from readers even on those stories than the newspaper or website that originally carried them.

The lesson: Use whatever social tools are available

Among the things the Huffington Post did that helped make it a social-news behemoth was to integrate Facebook’s open platform (then called Facebook Connect) into the site almost as soon as it was launched — something that immediately allowed readers to see what articles their friends had read, shared and commented on. That drove millions of readers to the site, and also boosted the number of comments by over 50 percent. And the site has also integrated virtually every other sharing tool known to man to make it easy for readers to share, and even come up with some of its own.

Traditional media critics attack the Huffington Post for its aggregation, but as Nieman fellow David Skok pointed out recently at the Nieman Lab blog, aggregation is deeply embedded in the DNA of the media industry, and always has been. And as we’ve tried to point out before at GigaOM, aggregation and particularly curation are two of the skills that modern media companies need the most — or readers overwhelmed by information will go elsewhere, whether to apps like Flipboard and Zite or to new services that give them the tools they need to filter that growing ocean of content.

Some media outlets are experimenting with new services that show they understand this, including Reuters with its just-launched Social Pulse feature — which aggregates top news from both its wire service and other news sites. Meanwhile, new players like BuzzFeed (which is run by many of the key players from the early Huffington Post) are moving from being just aggregators to becoming news entities in their own right by hiring reporters, and even Tumblr is hiring journalists to act as curators of its network — a very media-like thing to do. New media entities are everywhere, it seems.

Post and thumbnail photos courtesy of Flickr users Libertinus Yomango and World Economic Forum

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• The Bottom Line - The initial read-through for ZNGA is potentially a negative indication for ZNGA’s 4Q revenue estimate.
• Assuming ~93% of ZNGA’s bookings are generated through FB (average of first three quarters of 2011), then total net FB bookings for ZNGA for 2011 would be $1,117mm (based on FB’s ZNGA rev of $445mm divided by 30%, generating gross FB bookings of $1,484mm for ZNGA, then multipled by the 70% that ZNGA keeps).  This implies $268mm in total net bookings for the fourth quarter, while our model estimates $302mm in 4Q bookings.  In other words, unless ZNGA has meaningfully diversified its revenues away from FB, it could miss our 4Q bookings estimate.
• Additionally, this ignores the fact that some percentage of FB’s ZNGA revenue is generated by ZNGA’s purchase of FB advertising, thus the actual ZNGA bookings from FB is likely even lower.
• Where we could be wrong – there could be other definitional items around revenue recognition and advertising that we are failing to incorporate into these estimates.

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There has been a lot of attention — to say the least — paid to Facebook’s long-awaited public stock offering, which could put a valuation on the company as high as $100 billion. For the first time, average investors will get a chance to own a piece of the massive social network and its multibillion-dollar revenue stream. But in a very important way, Facebook still remains a private company. Why? Because it is controlled by CEO Mark Zuckerberg through a special class of stock that gives him super-voting rights, and he also controls the board. In other words, you may own stock in the company, but you have virtually no say in what happens to it.

As described in the Facebook prospectus, when new shareholders buy stock in the company, once it is publicly traded they will get class A shares, which carry a single vote each. Mark Zuckerberg and the rest of the early investors in the company own class B shares, which have 10 votes each. The co-founder and CEO has about 28 percent of this class of stock; but he also has voting agreements with a number of other Facebook insiders and co-founders that give him about 57 percent of the votes in the company.

Zuckerberg retains control forever, even after his death

And what happens when other holders of the class B super-voting stock decide to sell their shares, as some early investors will no doubt do when the company starts trading publicly? At that point, they are automatically converted to class A shares, which means Zuckerberg’s control over the voting structure effectively remains the same. And the Facebook founder even has the right to transfer control of the company to a handpicked successor after his death.

Facebook is far from the only tech superstar to choose this kind of tiered structure: Larry Page and Sergey Brin retained control of Google after it went public by owning super-voting shares that gave them 10 votes per share, although the two have said they will be selling some large chunks of their stock over the next couple of years, which will reduce their control. Zynga also has super-voting shares that give founder and CEO Mark Pincus 10 votes per share, just as LinkedIn’s and Groupon’s founders have votes that come with 150 votes each.

So are multiple-voting shares good or bad? That depends on whether you believe that giving a 27-year-old entrepreneur almost complete control over the fate of a $100-billion company is a good thing or not. In terms of what is called “corporate governance,” multiple-voting shares are seen as a large risk factor, in part because of what some corporate raiders like Conrad Black have done to their companies by controlling them so completely.

Is giving the CEO ultimate control good or bad?

In Silicon Valley in particular, where entrepreneurs are seen as a special breed, retaining control over your company is viewed as a positive thing. Zuckerberg has been congratulated by many insiders for managing to keep an iron grip on the company through multiple rounds of financing. And this perspective is understandable for entrepreneurs, many of whom are afraid that their successful company will be taken over by VCs or others who don’t have its best interests at heart, as Apple was early in its history.

But when you are a public company, retaining that much control not just only the votes but also over the board of directors — Zuckerberg has the right to nominate a majority of the board as a result of voting agreements with other shareholders and founders — can be a dangerous thing. Although Steve Jobs didn’t control his board in the same way Zuckerberg does, Apple’s board of directors was criticized for keeping the details of Jobs’ illness hidden from investors and also for approving the repricing of options in a way that arguably went against the interests of common shareholders.

Did the kind of control that Steve Jobs wielded over Apple ultimately result in some incredible, world-changing products? Sure it did. And shareholders who have seen their investment multiply a hundredfold are likely unconcerned about any of the board or option irregularities. But does the end always justify the means?

Selling shares to the public is supposed to come with a certain amount of responsibility to those shareholders, and they should have the ability to hold a CEO and a board accountable if decisions are made that go against their interests. But controlling almost 60 percent of the votes and a majority of the board means Zuckerberg gets to fundamentally do whatever he wants with Facebook — and public shareholders are just along for the ride. Investors should be aware of that before they decide to buy a ticket.

Post and thumbnail photos courtesy of Flickr user Faramarz Hashemi

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Facebook is selling investors on the dream that the company is just getting started — not only with selling ad space on its current product, but in creating nearly an entirely new Internet, one where Facebook doesn’t simply create connections between sites and people but creates many different social products too.

This ambitious goal creates an interesting dichotomy. Although every hot startup wants to be the next Facebook, Facebook needs to be every hot startup as well. To execute its vision of total web dominance, Facebook is recreating and competing with nearly every significant Internet product of the last few years. It’s an unprecedented pivot that threatens Facebook’s core products and may eventually benefit the very same startups Facebook is trying to crush.

Back in the Day

For the first five years or so, Facebook helped users do three simple things: share photographs, status updates and links with friends. But somewhere along the line Facebook recognized two important facts:

1. If it was going to be worth tens of billions of dollars, it needed to attract hundreds of millions of eyes to the site every day. To do this, it needed to be a portal for every type of content, or better yet, the shell for all consumption of that content. In other words, they needed to become the entire Web.

2. New companies, like Twitter and Instagram, were creating compelling social products that not only challenged Facebook’s dominance but threatened to steal users’ time away from Facebook.

If Facebook was going to be more than a destination for sharing updates with friends and family, it had to move fast. And it did.

Unparalleled Ambition

It’s hard not to respect Facebook for its relentless innovation and lightening fast product updates, as well as its fearlessness in pushing the limits of privacy, user experience  and integration with the web as a whole to achieve its vision.

However, if you look at Facebook’s list of 22 (and growing) products– not to mention the thousands of third-party apps — you begin to wonder if Facebook is overreaching and confusing its members.

Over the last couple of years, consumers have been trending towards products with the opposite approach. Simple, stark, and direct sites and apps that do one thing very, very well. We open Instagram because we want to do one easy thing — share a great picture or see our friends pictures. It’s fun. It’s lightweight. It scratches an itch.

What itch is Facebook scratching? Most people I know can’t clearly articulate why they use Facebook. Now that we’ve reassembled our high school physics class, shared every song we listen to, and uploaded every cat video out there, our feeds (we now have two feeds!) have become cluttered news tickers without any focus or context.

Facebook’s expansions of services and connections don’t come with a backup plan. After Facebook realized that we don’t want to connect with close friends and casual acquaintances in the same way, what did the site do? They added yet another new feature so that we could segment the giant list of friends that they pushed us to assemble in the first place. Meanwhile, the easier option is to just declare Facebook bankruptcy and start over on another social network like Path.

That’s the real irony of Facebook’s recent moves. By copying the startups that threaten them, Facebook actually muddles members’ experience so much that it enhances the need for its competitors.

Here’s an incomplete list of companies Facebook is actively competing with:

• Flickr/Picasa/Instagram (pictures)
• YouTube/Vimeo (video)
• Beluga/GroupMe (group messenger apps)
• Foursquare (location sharing)
• Twitter (activity feed)
• Turntable.fm (shared listening)
• vBulletin (groups)
• News.me/Flipboard (frictionless social news/reading)
• Tumblr/Pinterest/etc (share other people’s pictures)
• AIM/GChat (chat)
• Gmail, Yahoo Mail, Hotmail (Facebook Messenger)
• About.me/Flavors.me (Timeline)
• Google+, Path (create rings of friends/acquaintances)
• Plancast (events)
• Craigslist (classified listings)

Many of the hottest startups have easy to use, beautiful and elegant sites built around small but significant problems. Several, including Foursquare, Tumblr, Living Social and Groupon, have had astounding results even in the face of Facebook’s attempts to move into their spaces.

Does Facebook really believe it can implement every solution better than its competitors? Does it think its social graph is so much of an advantage that it can sustain a confused and complicated product?

A lot of VCs ask startups what they’ll do when Facebook copies their features. But come IPO time, maybe Facebook’s shareholders should start asking what happens when Facebook tries to do too much.

Edward Aten is the founder of Swift.fm, a social distribution service for musicians. He’s an active startup advisor, blogger and marathoner in San Francisco. Follow him on Twitter @edwardaten. The views expressed here are personal and do not necessarily reflect those of any Company with which he is or has been affiliated.

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There is a lot to take in when it comes to the much-anticipated Facebook IPO filing: the company’s massive user base of 845 million (more than half of whom log on at least once a day), the $1 billion in net income it made last year, the almost $4 billion in revenue and so on. And it is pretty obvious that co-founder and CEO Mark Zuckerberg wants to extend his social network beyond that, to reach as many human beings on the planet as possible. But in the letter to shareholders that is included in the filing, Zuckerberg makes it clear that his vision goes beyond even that: He wants to fundamentally rewire the way the world works, from interpersonal interactions to commerce to even government.

In the note, which founders and CEOs typically include in their securities filings as a way of introducing themselves and their vision to investors (Google introduced the phrase it is probably best known for, “Don’t be evil”), Zuckerberg says he believes the social connections Facebook allows users to create are more than just a way for friends to stay in touch. He says they can help to change the world:

By helping people form these connections, we hope to rewire the way people spread and consume information. We think the world’s information infrastructure should resemble the social graph — a network built from the bottom up or peer-to-peer, rather than the monolithic, top-down structure that has existed to date.

We also believe that giving people control over what they share is a fundamental principle of this rewiring. We have already helped more than 800 million people map out more than 100 billion connections so far, and our goal is to help this rewiring accelerate.

Think about that for a moment. It is fairly common for mission statements in IPO filings to be grandiose, but even so, Zuckerberg’s vision is fairly massive: He is saying he believes social connections will rewire the entire structure of society, that it will become more like a network graph, with multiple connections among points, instead of a top-down hierarchy. He says that a more open and connected world will “help create a stronger economy with more authentic businesses that build better products and services,” because as people share their opinions, it makes it easier to “improve the quality and efficiency of their lives.”

A more networked world — and one company at the center

Not only that, but Zuckerberg says social tools — experienced through Facebook, obviously — can “bring a more honest and transparent dialogue around government” that could help empower people and make officials more accountable:

By giving people the power to share, we are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few.

This view of a networked world isn’t something the Facebook CEO came up with all by himself. Academics and social theorists such as Yochai Benkler — the author of the book The Wealth of Networks — and others have been discussing the impact of network theory for some time and the value of what sociologist Mark Granovetter called “weak ties” among individuals (as opposed to the strong ties of religion, culture, etc.). And we have already seen how powerful Facebook connections can be during events like the Arab Spring in Egypt.

But Zuckerberg isn’t just another social-networking theorist. He is the CEO of a company that touches close to a billion people in one way or another, with a market value in the $100 billion range. And he doesn’t just want to enable these changes in society; on a fairly fundamental level, he wants to control them. Whether (and for how long) Facebook can manage to walk the line between enabling and controlling social change remains to be seen.

Post and thumbnail photos courtesy of Richard Engel, NBC

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Facebook's old Palo Alto headquarters during Hackathon 28

Initial public offering filings typically include a letter to potential investors from the company’s CEO. These missives are generally used to discuss basics like the company’s growth so far and its bright future ahead. In Facebook’s IPO document filed Wednesday, however, Mark Zuckerberg dedicated a significant portion of his letter to something a bit out of the ordinary: Teaching potential investors about “the Hacker Way.”

For one thing, it’s a sign of Zuckerberg’s commitment to maintaining a rigorous engineering culture at Facebook, even as it becomes an increasingly powerful media entity. It’s a statement that at Facebook, technology — and the programmers who push it forward — will always come first. The company’s “hackathons” (one of which GigaOM recently attended) are a key example of this. Hacker Way is also what Facebook named the road inside its new Menlo Park, California headquarters.

But it’s also a powerful statement on a larger scale. Digging into the SEC’s online database of company filings, it looks like the word “hacker” has been used just 6400 times in the past four years. That may seem like a lot, but out of the millions of words that have been filed to the SEC in that amount of time, it’s a pittance. And from the looks of it, practically every time the word “hacker” has been used in regulatory filings, the connotation has been negative: “Data security breaches as the result of hackers,” “The acts of a hacker causing damage or destruction to data” and so on.

For Zuckerberg to use this platform to embrace the word hacker and actively change its definition into something positive comes at an excellent time: Right now, the tech industry is waking up to how important it is to help the government and regulatory bodies understand what it is that they do. Facebook’s IPO could serve as a call for hackers everywhere to get more respect, which would be a great thing for the tech industry as a whole.

Below I’ve excerpted some key parts of Zuckerberg’s treatise on hacking from the IPO filing:

“The word ‘hacker’ has an unfairly negative connotation from being portrayed in the media as people who break into computers. In reality, hacking just means building something quickly or testing the boundaries of what can be done. Like most things, it can be used for good or bad, but the vast majority of hackers I’ve met tend to be idealistic people who want to have a positive impact on the world.”

“The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it — often in the face of people who say it’s impossible or are content with the status quo.”

“Hacking is also an inherently hands-on and active discipline. Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works. There’s a hacker mantra that you’ll hear a lot around Facebook offices: ‘Code wins arguments.’”

“Hacker culture is also extremely open and meritocratic. Hackers believe that the best idea and implementation should always win — not the person who is best at lobbying for an idea or the person who manages the most people.”

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A graphic included in Facebook's S-1 (click to enlarge)

The most highly anticipated initial public offering in today’s tech world is officially happening. Facebook filed S-1 documents with the Securities and Exchange Commission Wednesday afternoon to raise a maximum of $5 billion.

The company plans to trade under the ticker symbol “FB.” According to the filing, Morgan Stanley, JP Morgan and Goldman Sachs are the lead bookrunners on the IPO; Bank of America Merrill Lynch, Barclay’s Capital, and Allen & Company are also listed as underwriters.

Here are some of the key numbers revealed in the filing:

• Facebook made $3.7 billion in revenue in 2011, an 88 percent boost in year-over-year revenue compared to 2010, when the company made $1.97 billion in revenue.

• The company has been solidly profitable for at least three years — its net income for 2011 was a very cool $1 billion.

• Facebook has been saving up a nice bit of the cash it’s made: The company had $3.9 billion in cash and equivalents on its books as of the end of the 2011 calendar year.

• Facebook now has 845 million monthly active users and 483 million daily active users.

• Co-founder and CEO Mark Zuckerberg’s base salary was $500,000 in 2011; COO Sheryl Sandberg’s was $300,000.

• Zynga accounted for 12 percent of Facebook’s total revenues in 2011.

According to a letter written by Zuckerberg included in the S-1 filing, the money Facebook gets from an IPO will help it take advantage of the gold rush around increased worldwide connectivity to the Internet and the mobile devices boom.  The letter reads in part:

“Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones — the raw tools necessary to start sharing what they’re thinking, feeling and doing with whomever they want. Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries.

There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on.”

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