The San Francisco company, which we covered in October, claims it can scope out more fraudsters before they do harm because it is not constrained by the finite number of rules that most vendors use to flag suspicious activity. “Many anti-fraud technologies follow a set number, maybe 175 to 225 rules, against which to measure user behavior —  the problem is fraudsters don’t follow the rules and change all the time,” Sift Science co-founder Brandon Ballinger said in a recent interview.

Customers can flag users as fraudsters in order to train Sift Science’s algorithm to spot patterns unique to their site.

“We take a machine learning approach to learn from patterns early as they form to predict whether a new user is fraudulent,” he said. Sift Science’s machine learning algorithm has automatically learned one million patterns that predict fraud, and as more sites join the network, it will learn more patterns to help everybody fight fraud more accurately, he said.

Speeding up fraud defense

“You might expect the worst type of users to sign onto a site and make an immediate purchase [with a stolen credit card] but in reality if they wait an hour or so they’re more likely to be a fraudster than a fast buyer,” Ballinger said. “Or, if you’re an auction site and a seller posts an item where the text is all in caps, the user is four times more likely to be a fraudster — they’re not posting real items, it’s usually some sort of money laundering scheme, they’ll have 100 stolen credit cares and create a seller account and a bunch of buyer accounts then they post fake items and buy them.”

But the bad guys are always going to change things up to avoid detection. An example,  in the past, the most popular time to conduct online fraud was at 3 a.m. local time but now it’s midnight to 1 a.m., Ballinger said. And, while a large percentage of traffic coming out of Nigeria remains fraudulent, a whopping 81 percent of fraud comes from U.S.-based IP addresses. “That means either they’re in the U.S. or are smart enough to use a proxy,” Ballinger said.

Applying webscale data and analytics to fraud detection

That fluidity and flexibility is important as is the company’s Google DNA. Ballinger said 8 of the company’s 9 employees are engineers and 5 are ex-Google engineers. “We’re taking the Google approach of large-scale machine learning,” he said. Except Sift Science is running on Hadoop, Hbase and MapReduce on Amazon’s public cloud.

Network funneling is one of many fraud patterns identified by Sift Science, which uses symmetry to detect when a fraudster is funneling money through a large network of accounts.

It is thus able to use Amazon Web Services huge scale –and the network effect of all the companies on it — to build its knowledge base. “If someone attacks AirBNB and Affirm we can apply that knowledge and use it elsewhere,” Ballinger said.

Sift Science, which relies on what Ballinger calls a dead-simple REST API,  will face off against in the fraud detection space including Silver Tail Systems, which EMC bought last year and which watches and tracks user navigation trends; and Threatmetrix which watches device IDs.

Early customers include payment processors, online retailers, and some name brands including Airbnb and Affirm, Max Levchin’s latest startup.

The $5.5 million in funding comes from some big names including Union Square Ventures; Max Levchin of PayPal, Slide and Affirm fame; Marc Benioff of Salesforce.com; Kevin Scott of AdMob, Google and LinkedIn; Alexis Ohanian (Reddit and YCombinator); and Rich Barton (Zillow and.)

Prospective customers can sign up on Sift Science’s site for the service, which is free of charge for their first 5,000 users, the service is free; after that it’s 10 cents per user.

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Levchin co-founded PayPal and then sold his second company, Slide, to Google for hundreds of millions. Slide came out of MRL Ventures, a similar type of R&D lab, that also produced Yelp as one of its companies. The Ukraine-born founder first pitched his idea for the new lab in Munich in January of this year, and explained the idea behind it to Om:

“As we become more connected, we can make things a lot more efficient around us,” he said at the time. “There is a lot of change that is going to happen.” Levchin explained that the companies coming out of HVF would revolve around the importance of data and how we use it. He said at the time that he was almost ready to launch two different ventures from the self-funded lab.

Affirm will allow merchants to convert mobile browsers to buyers by making purchases easier for people who don’t want to pull out their credit cards. The company’s website explains the concept behind it:

“The mobile shopping experience attracts a certain type of shopper – impulsive, time-constrained, exploratory. Retailers must evaluate how their purchase flow aligns with these motivations. Affirm greases the skids between intent and purchase for these shoppers.”

The concept sounds very much like PayPal or Square or any number of other payments startups on the market right now, but Affirm is looking to distinguish itself by acting as a digital charge card where users can add items to their tab and then pay later, according to the report. At launch, the company is just launching with one partner, 1-800-Flowers, but is allowing more interested merchants to sign up.

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Carr looked at a recent speech from PayPal co-founder Max Levchin at the DLD conference in Germany (one Om also attended, where he conducted an in-depth interview with Levchin) and clearly didn’t like what he saw. Levchin’s view of people, according to Carr, is that they are just resources that are not being utilized efficiently, and the technology of sensors and real-time information can be used to improve that, in much the same way that programmers try to optimize the clock cycles of a microprocessor. To take one example, Levchin said:

“How about dynamic pricing for brain cycles? We have been maximizing utilization of very high-value, very low-frequency specialists — today you can already rent the brain of a data-mining genius via Kaggle by the hour, tomorrow by brain-hour. Just like the SETI@Home screensaver ‘steals’ CPU cycles to sift through cosmic radio noise for alien voices, your brain plug firmware will earn you a little extra cash while you sleep, by being remotely programmed to solve hard problems.”

More efficient for users, or just creepy?

If you are a geek, this might sound like something with a lot of potential, but Carr describes it as “Clay Shirky’s ‘cognitive surplus’ idea taken to its logical, fascistic extreme.” Levchin goes on to paint a picture of a future in which his insurance company learns — via sensors in his car — that he is taking his children to work, and boosts his insurance premium by a few dollars for the extra risk (Note: we’ll be talking more about the potential of big data at our Structure:Data conference in New York).

Levchin no doubt sees this as efficient, but Carr sees the looming shadow of Big Brother: What if those same sensors detected that you were overweight, or had eaten too much pizza, he asks — would they report that to your insurance company? Maybe the company would boost your rates a little, or maybe you would be “scheduled for a brief re-education session down at the local office of the Bureau for Internal Resource Optimization.” As he puts it:

“This is the nightmare world of Big Data, where the moment-by-moment behavior of human beings — analog resources — is tracked by sensors and engineered by central authorities to create optimal statistical outcomes. We might dismiss it as a warped science fiction fantasy if it weren’t also the utopian dream of the Max Levchins of the world. They have lots of money and they smell even more.”

In a recent piece for Slate, Carr’s fellow digital skeptic Evgeny Morozov looked at the potential implications of banks and other credit-issuing agencies using big data to determine who deserves a loan. Although he says the idea of big data is “mostly big hype,” Morozov talks about several companies that are trying to use data from all kinds of sources — including social networks such as Facebook and Twitter — to figure out who is credit-worthy.

Hong Kong-based Lenddo and U.S.-based LendUp look at an applicant’s connections on Facebook and Twitter, Morozov says, and “the key to getting a successful loan is having a handful of highly trusted individuals in your social networks.” A British payday-loan company called Wonga even considers the time of day and how a user clicks around a website in order to determine whether they deserve a loan (although Morozov doesn’t mention it, PayPal uses similar methods to gauge credit-worthiness).

The key is who controls the use of the information

Morozov also mentions ZestFinance, founded by former Google chief information officer Doug Merrill (who we had at our Structure: Data conference in New York last year), whose company looks at more than 70,000 signals and 10 different models to assess credit risk. And he draws a direct link between this and Big Brother, saying: “If only East Germany’s Stasi — the true pioneers of ‘big data’ — had the same model for assessing potential dissidents!”

Despite that comment, however, in the end he (somewhat surprisingly) seems concerned mostly that these companies will use all this information to market things to people who don’t need them, rather than turning them in to the government or their insurance company:

“What happens once these firms, having figured out that all data are credit data, realize that all data are also marketing data? Given how much they know about their clients, it would be very hard for such lending companies not to use this information to sell their existing customers on yet another loan or, perhaps, encourage them to use the loan to take advantage of some unique online sales offer.”

The common thread in both of these dystopian visions is a world in which our data is transmitted without our knowledge, and/or used against us in some way. Where Levchin seems to see an efficient exchange of data between user and service, one with benefits for both — and presumably a level (and secure) playing field in terms of who has access to it — Carr and Morozov see companies and governments misusing this data for their own nefarious purposes, while we remain powerless.

What makes it difficult to argue with either one is that we’ve already seen the building blocks of this potential future emerge, whether it’s Facebook playing fast and loose with the privacy settings of a billion people, or companies aggregating information and creating profiles of us and our activities and desires. What happens when the sensor-filled future that Levchin imagines becomes a reality? Who will be in control of all that information?

Images courtesy of Shutterstock / Lightspring and Flickr / Thomas Leuthard.

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PayPal co-founder and HFV CEO Max Levchin at DLD 2013 Conference in Munich Photo by Om Malik

It is not the first time Levchin has turned to such a structure. In early part of the 21st century, he started MRL Ventures, with backing from Peter Thiel, who was chief financial officer of PayPal. MRL resulted in ten startups; two became successful — Slide and Yelp — while one, AdRoll, briefly flirted with bright lights. Others withered away. Levchin is betting that lightning will strike twice. “It is the same approach, but this time it is around data,” said Levchin.

The Kiev, Ukraine-born entrepreneur made his big pitch at the DLD conference in Munich in a speech that needed parsing. So we ended up having a chat about his plans.

When Sensors Meet Data

The focus at a very basic level is “data” and how it will influence our daily lives. Max believes — and I most certainly agree — that we are going to see digitization or penetration of technology into parts of our lives which have been hitherto untouched by it. Whether it is sensors or smartphones, we will have data emanate from different sources, and using that data to shape experiences is a big opportunity.

The word he used in our conversation often was “friction” or how sensors, embedded computing and the data that will result will reduce friction and inefficiency in many of our daily tasks. He pointed to Uber, the on-demand transportation service based in San Francisco as an example.

“The world of real things is very inefficient: slack resources are abundant, so are the companies trying to rationalize their use. Über, AirBnB, Exec, GetAround, PostMates, ZipCar, Cherry, Housefed, Skyara, ToolSpinner, Snapgoods, Vayable, Swifto…it’s an explosion! What enabled this? Why now? It’s not like we suddenly have a larger surplus of black cars than ever before.

Examine the DNA of these businesses: resource availability and demand requests — highly analog, as this is about cars, drivers, and passengers — is captured at the edge, automatically where possible, then transmitted and stored, then processed centrally. Requests are queued at the smart center, and a marketplace/auction is used to allocate them, matches are made and feedback is given in real time.

A key revolutionary insight here is not that the market-based distribution of resources is a great idea — it is the digitalization of analog data, and its management in a centralized queue to create amazing new efficiencies.”

“As we become more connected, we can make things a lot more efficient around us,” he said. “There is a lot of change that is going to happen.” Levchin pointed to a future where sensors in our clothing communicate with our in-home systems and adjust the temperature of our environment based on our body conditions.

Say No To The Four-Year Startup Cycle

As we talked about his plans, I couldn’t help but notice a certain level of maturity. Whether it is age or the fact that he is a family man, the older Levchin is in less of a hurry and is taking a more nuanced and longer view of the world. When asked, he said that it is time to get off the four-year-cycle of the Silicon Valley startup.

However, to solve bigger problems, sometimes you need a longer horizon: a ten-year schedule for example, Levchin said. “At PayPal, we viewed the world in a four year horizon,” he said, “Because that is how the valley worked. Had we thought it as a 20-year old company, the whole thing would be different.” He believes that for some odd reason being a 10-to-15 year old technology company isn’t cool, but that thinking has to change in order to get bigger breakthroughs.

The four year-cycle implies a certain pacing and if you don’t show returns in that time, people start quitting — whether it is your investors or employees, he added. Sure, some break out — Google and Facebook for example — but “we need more of those breakouts,” Levchin said.

It is a common refrain within the group of folks popularly known as the PayPal Mafia. Thiel, a controversial investor, has been most vocal of the lot. There is Elon Musk, the real life Tony Stark, who is probably the most successful. Levchin, too wants to make big impact with his new efforts.

The story of HVF

Levchin started HVF in 2011 with the notion of “going for bigger and longer term projects.” HVF, he said, will essentially be a vessel for working on his ideas and he will have a team, but some of those ideas will become mature enough and will be spun out as separate companies.

So far, he has about a dozen engineers working with him and he is close to announcing at least two projects later this year. But he is not willing to put down any dates, because again, he feels that it makes the efforts part of a rat-race. “Launch time frame is tied to value creation,” he added. It is one of the primary reasons why he is funding HFV himself.

Flush from the sale of Slide to Google, and thanks to his other investments in different PayPal Mafia companies, he has enough to self fund this new quest. However, that doesn’t preclude companies coming out of HVF from raising money from outside investors, Levchin said.

From the archives: A video chat with Max Levchin

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However, they are being illogical in believing that they can revive Yahoo and turn it back into a relevant Internet player.

I had outlined my reasons for being a non-believer in a Yahoo turnaround in a post almost a year ago. Nothing really has changed in my mind — not even the new new CEO or the new board member. The only thing that would change my mind would be if the company talks specifics and share a timeline for the systematic changes that need to be implemented.

Yahoo was a giant once — but now it is surrounded by competitors who are vying for the attention of consumers, who are attracted to new sources of entertainment and information, be it Pinterest or Facebook. It has been lagging on mobile and most importantly, it has systematically lost all its technical leadership.

Whenever, I talk to former Yahoo employees, other folks who still work at the company and other Silicon Valley insiders, they all come back with the same sentiment — the problem is foundational and the core of Yahoo is pretty hollow. Others have compared it to an industrial-era giant caught in a bureaucratic cobweb. Ask any 25-year-old young programmer who he or she wants to work for. Yahoo isn’t the name you hear.

An empty cupboard?

Yahoo’s paucity of technical capability was up for all to see this week, when Yahoo launched a mobile app, with filters and stuff. Folks loved it. Nick Bilton was ecstatic about it. Many said it was an end to the tyranny of low resolution, square shaped photos that was imposed by Instagram. Others waxed nostalgic and saw a Flickr Spring.

What I saw: Yahoo using a third party (Aviary in this case) to build the mobile app for Flickr, that one web service inside that still has loyal and passionate users among the snap-happy folks. [I will give them full marks for doing a good job on sprucing up Yahoo Mail, though they certainly took their time with it.]

It is a pretty damning testimonial of company’s technology capabilities that it can’t really build a product. How can anyone turn a company that is lacking in product capabilities and technology leadership into a player? I don’t quite understand.

Yes, Yahoo has made some sporadic buys. It is going to buy more of these small companies to bolster its bullpen, but you can’t buy your way into being innovative. It is a cultural and a structural issue and is a long process. I don’t think this honeymoon Yahoo is having with Wall Street is going to last for long.

But the Yahoo revival starts when the new technology talent makes it the first place to go work — ahead of Pinterest, AirBnB, Twitter, Facebook and even Google. Up until then, all board makeovers and new additions to the top layer of the company are nothing more than eye candy for the stock market.

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After a quiet testing period, the London-based company — which uses a peer-to-peer engine that lets people transfer money between currencies and countries at radically cheaper rates than traditional banking — is officially announcing on Friday that users can now move money into and out of Swiss Francs (CHF) and Polish Zloty (PLN).

It’s a new service based around a partnership with The Currency Cloud, another London finance startup that provides a platform for APIs to access banking services across 200 countries.

“When we’re looking at rolling out in new currencies we have to look at the regulatory situation and partner with a bank,” Transferwise co-founder Taavet Hinrikus told me. “The Currency Cloud help us with the banking component.”

“The systems for currency conversion used by banks are outdated,” added Currency Cloud CEO Michael Laven. “We’ve been working with Transferwise for quite a while… but while we admire their approach to mainstream customers, we’re in the background, we’re a technology platform.”

But while the choices of new currency may seem odd at first, there are good reasons for both Swiss and Polish links. The company is currently regulated to operate across Europe, and beyond Euro payments it now has access to the extensive Swiss financial system and Poland’s large community of ex-patriot workers who are spread all over the continent.

Since launching last year, Transferwise has already process millions of Euros in payments for its customers, and now counts PayPal co-founder Max Levchin among its investors.

But Hinrikus suggested that with the help of The Currency Cloud, his company could begin expanding into new currencies — including what could prove to be the biggest prize of all.

“Without them it would have been much harder to do this,” he told me. “We’re looking forward to adding new currencies very soon.”

Including the U.S. dollar? He wouldn’t say exactly, but suggested that it might have moved up in the company’s plans.

“It’s definitely much closer to happening than it was before,” he said.

Photograph of Taavet Hinrikus and Kristo Kaarman used under Creative Commons license courtesy of Seedcamp / Money photograph copyright Shutterstock/Glovatskiy

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The company, which makes it radically cheaper to transfer money from one country or currency to another, is announcing a small seed round today of just €1 million, or $1.3 million. While that’s not a lot for a financial startup, the money is really a secondary concern compared to where it comes from, since the list of investors reads like a who’s who of financial startup entrepreneurs.

Alongside Levchin, who earned his chops a decade ago with PayPal and later sold Slide to Google, comes an array of talented angels, including Shamir Karkal of banking startup Simple, Errol Damelin of British loans service Wonga and former Betfair CEO David Yu, and others.

It’s not just angels either. From the institutional side comes money from IA Ventures in New York, Index Ventures in Europe, as well as France’s Kima Ventures, Seedcamp and The Accelerator Group.

“We were self-funded and we figured: let’s go out and get the best group of people together,” Transferwise co-founder Taavet Hinrikus told me. “It’s fairly small but it didn’t take us too much time to do… we said ‘who do we want to help build this up as a global business?’.”

Sounds like they got who they wanted.

But what, exactly, is this collection of big hitters putting their money into?

Transferwise’s business is simple: it basically cuts out the fat from currency exchange and passes the savings on to customers.

It does this by bypassing traditional ways of wiring money and instead making the process transparent and consumer friendly. The service’s engine essentially matches transfers in one currency to those in another, and sends the money locally, from a bank account in the host country to the target account, instead of transferring it across borders — a P2P-styled approach that has led some (including me) to call it the “Skype of currency exchange.”

Users don’t necessarily see the matching process, but they do see what it produces: savings. The approach the company takes means that it can offer consumers a competitive exchange rate — at the rates banks use themselves, not the rate they charge you — and minimize fees too.

As an example, says Hinrikus, a typical transfer of £1,000 into a Euro account through Western Union will cost you more than €120: with Transferwise it will cost €5.46.

I think the idea has got a lot going for it, but given the size of the market — conservative estimates suggest around $150 billion flows through currency exchanges each day — things are still very, very small right now: the company saw €10 million of payments go through its systems in the first year, for example.

Hinrikus says that is partly because there is only one currency pairing available on the site — from pounds to Euros and vice versa — and because marketing is nothing more than word of mouth. However, the numbers are growing, he says, and businesses are even starting to use the site for their payroll in foreign countries.

There are plans to expand the currency slate (though the US dollar remains unlikely due to regulatory constraints) and try to speed up the process. It currently takes 1-3 days for a payment to arrive, because that’s the minimum speed required to be competitive — but the team says they’d love to make wiring instantaneous in the future. And there are other possibilities, too: there may even be a long-term business product for heavy users, for example.

But right now the small team of 10 is focused on improving the service full stop and be as disruptive to traditional banking as possible.

“The disruption in airlines happened about 20 years ago, with Easyjet and Ryanair and the like, and Telecom disruption happened about 10 years ago with Skype,” he said. “It hasn’t happened in finance yet: we’re seeing it in different verticals, with Wonga do lending, we’re seeing Lending Club do peer to peer lending, now we’re doing payments. But this is at the very beginning.”

But how easy would it be to disrupt the disruptors? Is this idea easily copied? Could the banks and simply drop their prices?

“I’m not worried about that part,” says Hinrikus. “The business we’re in there is technical complexity, regulatory complexity, business complexity, so it needs a very specific group of people. What we have, with my background as the first employee at Skype and growing an idea from the back of a napkin, and [co-founder] Kristo Kaarman’s financial background, we have really complementary skillsets — and now we’re being supported by the smartest investor group.”

Which, it seems, is probably a useful point to lay out the remaining list of investors. As well as IA, Index, Kima, Seedcamp, TAG, Levchin, Karkal, Damelin and Yu come some less familiar — but equally experienced — names: Denise Aptakar of PayPal, early Skype employee Sten Tamkivi, and Meyer Malka, the founder of South American trading platform Patagon.

This brains trust, the company hopes, can help launch it from a regional concern to a global player, which may mean more funding is necessary sooner rather than later.

“It is, in the end, a scale business,” says Hinrikus. “The goals we have are much further ahead — and we know we have to invest to get there.”

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PlugShare creators Armen Petrosian and Forrest North tell me that they have launched a wiki-style feature that enables the community to add the location of any public charging stations, which the founders say has morphed into a very popular feature. In addition PlugShare just came out with its Android app (download it here now), and the team is planning a Yelp-style section for the community to rate and comment on charging stations in the network.

So far, after about five months post-launch, PlugShare has had 20,000 downloads and about 2,000 users turn to the app on a daily basis to find chargers, says the founders. Given the electric car market is still tiny — there’s only several thousand new plug-in cars out there in the U.S. plus hundreds of DIYers — 2,000 daily active users isn’t as small as it sounds.

Petrosian formerly worked at battery startup Amprius, and North worked first at Tesla, and then founded electric motorcycle company Mission Motors. The founders both led the Stanford Solar Car team and managed to round up an all-star advisory board for Xatori including PayPal and Slide co-founder Max Levchin, and Tesla co-founder Marc Tarpenning.

North says that the goal of the growing mobile and social service is to “do whatever we can to enable electric vehicles to take off faster than they have been taking off.” That includes both enabling a network of people to share the plugs at their homes — and donate the electricity — and thus acting as a peer-to-peer EV charging network, or just reducing EV drivers range anxiety by showing drivers the closest plug.

That latter function might prove to be the service that generates PlugShare revenues. While the electric car charging infrastructure companies all have mobile apps, too, PlugShare can act as “Switzerland,” says Petrosian, and offer a place to organize all of them. Electric car makers also might be interested in partnering with a neutral startup, for their in-vehicle EV charging locator services, similar to the ones Nissan and GM are offering.

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For first three years of its life, the company was merely a social network, but then it transformed itself in quick succession into a social web platform and then a social aggregator of the web. Today, the company launched its “social inbox,” a new kind of messaging system that is the first public manifestation of the new new Facebook.

Facebook’s newest core competency is communications — a way to become even more indispensable in our daily web lives.

About four years ago, I wrote a column for Business 2.0 that essentially asked for what Facebook has done with this new social inbox:

E-mail ought to be reinvented to meet the needs of our always-connected lives. That means there’s still a mega-opportunity to reinvent the entire medium. E-mail has become a crutch, a way of passing the buck. In today’s inboxes, all e-mail messages are equal. In reality, of course, some are more equal than others. Spam, alerts, and calendar items all need to be treated separately. A smart inbox would — all in one interface — catch spam in junk filters, display the wine reminder in an IM, move company news to an RSS feed, and intelligently negotiate appointment requests with your calendar in the background.

Facebook has not only reinvented the idea of the inbox, but it has gone one better: it has done so by moving away from the traditional idea of email. One of the reasons why Yahoo and Google Mail have struggled to become entirely social is because it is hard to graft a social hierarchy on top of tools of communication. If you look at Gmail – it has most of the elements that are available in the new social inbox, but they are all discrete elements and give the appearance of many different silos, being cobbled together.

Facebook did the exact opposite – it imagined email only as a subset of what is in reality communication. SMS, Chat, Facebook messages, status updates and email is how Zuckerberg sees the world.  With the address book under its control, Facebook is now looking to become the “interaction hub” of our post-broadband, always-on lives.  Having trained nearly 350 million people to use its stream-based, simple inbox, Facebook has reinvented the “communication” experience.

Soon after the announcement, my Facebook account was upgraded: I have a new email address, I have my inbox connected to the SMS on my mobile phone, and I have Facebook messages. The new inbox doesn’t look any different from the old Facebook inbox, except now I can email the outside world and folks can email me directly. I can check a small box and send a message as an SMS and receive replies.

All the “messages” look essentially the same. The social graph acts as a gatekeeper against spam – only friends or friend-of-friends can email me. Others, when they email me, will see their emails end up in a folder called (what else): “Other.” It is not email as you and I know it — and I like it. Will this be my main email client or service? Not likely! But it has the utility to send messages outside of Facebook’s walled garden.

A few weeks ago, in a conversation with Slide CEO Max Levchin, I mused about how Facebook has essentially become the address book of our ever-connected lives. Thanks to seemingly frivolous tasks such as throwing sheep, poking people or simply wishing others happy birthday, the company has built an effective, socially relevant and meaningful map of relationships.

Facebook knows who our friends are, where we can find them and how much we communicate with them. The address book status allows the company to essentially become a communication hub for all sort of services. So, when looked at from that perspective, the launch of the new Social Inbox is not a surprise, and in fact it is a prescient move by Facebook.

Why?

Facebook as a service is amazingly effective when it focuses all its attention on what is the second order of friends – people you would like to stay in touch with, but just don’t have enough bandwidth (time) to stay in touch with. Those who matter to you the most are infinitely intimate, and as a result you communicate with them via SMS, IM Chat and voice. So far, this intimate communication has eluded Facebook. The launch of the new social inbox is a first step by Facebook to get a grip on this real world intimacy.

For an alternative take, check out Dan Gillmor’s thoughtful and cautionary essay on the Social Inbox.

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