My friend Auren periodically pens insightful posts about topics on his mind.  He recently shared his thoughts on social shopping.  To summarize:

Social psychology
has shown that people tend to develop relationships with those that have
similar interests to them, transcending demographics and psychographics. And those that have a strong relationship
with each other have the capacity to influence each others’ behavior.

Marketers traditionally have put consumers into various
buckets in order to compartmentalize and therefore easily learn and make
assumptions about them. These marketers
lack the Holy Grail social-graphic information: friend connections and
relationship information amongst their consumers. 

I agree with Auren in that the power of the social graph as it related to shopping behavior is extremely tempting.  In fact, I suspect that Beacon was the "wow" element in Facebook’s $15b valuation round.  However, I also think the trick to successfully putting social graph to e-commerce use is more complex than it first appears.

Auren lists those who have access to various types of social graph information:  telecom providers,
social networks, webmail and IM clients, and search aggregators. It’s true that all of these companies possess a slice of the social graph information, but each slice represents varying contexts.  Connections represented in one’s business email account will vary vastly from those in her personal one.  The problem is you can’t really make assumptions on which is more relevant for commercial behaviour.  Some will related better to their business contacts, others to friends, yet others to family.  An additional layer of complexity is in identifying the context of the email account.

Effective marketing using social graph data is probably closer to traditional targeted marketing than a truly AI-driven pinpoint attempt like beacon.  It’s a very fine line where these presumptive attempts start feeling creepy (not unlike the "Uncanny Valley" phenomenon in robots).  If a marketer starts assuming that my ex-girlfriend is my mother because I called her a few times on mother’s day, it’s not effective marketing.  In fact, Auren had a funny post the next day about how Evite thought he was a woman.

I do believe the social graph will continue to be a tremendously useful data set for marketers.  But, I think it will remain more an art and less a science.

There’s a great article in this week’s NY Times magazine, titled "Brave New World of Digital Intimacy" (registration required).  It is one of the best discussions of "ambient awareness" i have seen.  If you are interested in social media, it’s a must read.

I generally refrain from writing too much about the Turkish internet market in this blog.  I think it has too many conflicts with my job as an investor.  However, the point I am about to make is an important one.

Turkish internet has had social web services since 2004, with Yonja.  Afterwards, some of the dating sites were clever to incorporate some social media tools into their service, but going into 2007, there was no significant social web service without a dating angle in the Turkish market.  This, in fact, was the primary need we’d identified at Mondus.net.

Mondus’s growth has been slower than anticipated.  Facebook caught a spark in Turkey in mid 2007, and grew like an avalanche, to make Facebook the number two website in the country.

Facebook, along with Twitter, are the leading providers of "ambient awareness" services int he world.  The "born on the web" generation has adopted these services as utilities, and in Turkey, as in the rest of the world, this need exists.  Twitter does not really work in Turkey, due to limitations imposed by the mobile operators.  And, Facebook, while massively popular, is not really used in the same way in Turkey, as it is in other parts of the world.

This last part is an important distinction, albeit a fuzzy one.  I’d venture that less than 10% of Facebook users in Turkey would describe it, or any other web service, as an important channel for self expression or general communication in their daily lives.   I’d also guess that this percentage would be much higher in the US or the UK.

The point is, Turkey is still missing an effective "ambient awareness" channel.   My sense is that the service to eventually stake that claim will have to incorporate some unique cultural aspects of this country and not simply be a clone of the global services.  The prize to attain is quite significant.

In my last post, I mentioned I was curious to read Umair Haque’s take on Chrome.  Here he comes with an insightful blog post.  He sees Chrome as a remarkable milestone in the evolution of 21st century business.

Rethinking and rebuilding business in a radically better mold is the fundamental challenge today’s boardrooms face. It is what the 21st century demands. Because as a confluence of crises tells us, tired, rusting, obsolete industrial era business as usual cannot go on.

Yet, making business better isn’t about responsibility, altruism, or
justice – it is the single most significant strategic opportunity
today’s boardrooms can seize. Google’s series of revolutions tell us
that it is when we forget how business is and has been – and instead,
focus on what business can be and should be – that we can rediscover
and reignite new paths to advantage.

So where do the rest of us start? Here’s a single, simple question.

Where is the Chrome in your strategy? What shared resource
have you invested in – or should you invest in – to expand the pie
sustainably for everyone over the long-run?

Read the entire thing and think about it.  I think he is right and he poses a question everybody should be thinking about.  Umair points out the Ford example as the obsolete business model, but as we witness natural-resource driven capital facing off to post-industrial revolution western corporate establishment, this type of innovation (business model innovation, not technical innovation) one needs to focus on to gain an edge.

I have been extremely busy with work over the past few weeks and have not been blogging as regularly as I’d like to.  This period has unfortunately coincided with two developments that I regard as very critical milestones in the development of the internet:  Ubiquity and Google Chrome.

Of the two, especially Google Chrome has created much excitement among my more technically inclined friends.  But, not being a technologist, I won’t be commenting on the technical aspects of the two, but rather, the reasons why I see them as significant.

I am a moderate user of computers.  I probably spend about 4-5 hours a day in front of my laptop.  Of that time, about 90% is spent exclusively in browser.  In fact, my laptop at this point is little more than a  container of Firefox for me.  And in that context, my Firefox 1) knows more about me than any other application, and 2) has my almost complete attention.

Browsers have, until recently, seem to have not fully comprehended this issue.  Especially Microsoft has forgone an immense opportunity to add a layer of intelligence to its dominant IE, not effectively following Mozilla’s lead in GreaseMonkey, extensions, add-ons and finally, Ubiquity. (Here’s how Mozilla had thought about Ubiquity.   I would like to hear Umair Haque‘s thinking on this miss by MS.)

My first thinking on browser intelligence started with the thought that the browser would be an ideal platform for context-sensitive social networking.  Now I see a much broader opportunity in the "internet as the OS" realm, and the level to which browsers will impact the development there.  Of course, the natural player there would have been Google, and voila,  we have Google Chrome.

There’d been speculation around what Web 3.0 would be about.  I’ll cast my vote with browser intelligence (and increased sensitivity to implicit context and insight garnered therewith).

Keep watching!

UPDATE: Michael Arrington thinks Google is going after MS.  MS has more than deserved it by blowing its IE lead.  Fred has identified the three-legged stool that makes Google’s future:  browser, mobile, cloud.

There’s a fascinating post in the Zero Day blog on India’s CAPTCHA solving companies.  The level of ingenuity in spam and web marketing abuse has always been high, so I am not really surprised by the article.  However, the scale is a bit staggering.  One company mentioned in the article claims:

Our captcha system is very complex and complicated. It is built to process up to one million captchas per day. We
have several big teams and hundreds of active agents solving captchas,
all at one time, especially during daytime in India. The backend of
this project involves over 45 powerful, expensive servers communicating
with the MySpace site to pull the captchas and then queue them up on
this site, and then process the results to push back to MySpace all
within 20 seconds per captcha.

I can’t really get as mad at this, as I probably should.  It’s developments like this that push the creativity of technologists to come up with models that are more difficult to cheat.  The malicious and scheming are agents of necessity that is the mother of all invention.

Seth Godin has a post today asserting that low ad click-through means the audience is "starving great content".  He goes on saying:

If you like what you’re reading, click an ad to say thanks.

This is quite a timely post for me as I have been spending quite a bit of time thinking about depressed online ad revenues in the Turkish market.  In the context Seth proposes, has the Turkish internet audience been punishing (or at least, not showing enough support for) the Turkish internet properties?

I am not sure that it would work in the way Seth suggests.  There’s quite a bit of a burden on the advertiser’s side to reward my click.  The ads have to be timely and in context.  Otherwise, my "tip-click" is not useful for the advertiser.

Interesting thought, nevertheless.

You have an idea.  Will it work?  The easiest way to find out is to give it a shot.  Too expensive?  Then, prototype it.  Create a simpler (read: cheaper) version and see if your potential users (or customers) will utilize it the way you hypothesize.

This is usually the advice I give to entrepreneurs if I am meeting them at the business idea stage.  However, as Tim Levine of SocialMedia.com points out in his post at Inside Facebook, this could be a tricky approach.

The most common mistake in A/B testing is not running enough ‘trials.’
The second is running too many. The latter risks wasting potentially
more productive opportunities, but the former is far worse because you
risk managing by noise. How wasteful it would be to invest in a
redesign because of a difference that might just be from random
variation!

Many internet ventures in Turkey depend on, and make assumptions regarding, CPC advertising.  Turkish entrepreneurs should find the example Tim gives in his post useful.