Facebook Messenger now makes up 10% of global mobile Voice Over IP calls. Because the audio quality of mobile VOIP calls are higher than the quality of the standard phone calls, the use of Facebook Messanger will continue to go up. Facebook will also add free mobile VOIP feature to WhatsApp.
Two years ago I anticipated Facebook will become a communications medium in which your Facebook ID could become your de facto phone number. I admit that while Facebook Home didn’t succeed at all, with 600 million Messenger users and 800 million WhatsApp users the mobile VOIP call feature could have a global impact on the telecommunication services.
The phone companies will have to rely increasingly on charging for data usage rather than for the traditional voice calls. Even that avenue of profits may become problematic with Google, Facebook, Elon Musk and Richard Branson (through their new satelite ventures) aiming to become global ISPs for over 50% of world population. Telecommunications companies will have to adapt and figure out new ways of generating income.
It’s not just a smart move, it is a brilliant move. Facebook brings back the glory of making software. While many large IT companies rushes to control both the software and the hardware as a way to dominate the market, Facebook is attempting to succeed by just being best at designing great software. In a way this is similar to what Microsoft has done through their partnership with Nokia, only at a grander scale. Google must be secretly brooding now. For a moment Google seemed to have it all, software and hardware together set in motion in a big wave overwhelming their long time foe, Apple. But here it is, the nightmare called Facebook is back on the front page. All that money poured into Android and Motorola hasn’t yet given any assurance that it will lead to world domination as planned.
The beauty of Facebook Home, as a concept as we don’t know how successful this is going to be, is its simplicity. Facebook created a social software layer on top of an entire ecosystem: Android operating system, hardware manufacturers, telecommunication networks and application developers. They have a phone, without having a phone. If there is someone else affected almost as much as Google is that must be Samsung. They have tried hard to build a services shop on their phone for some time, but with not much success. The media still calls the Samsung branded software applications ‘bloat ware’. And here it is, Facebook just comes along and in one swoop they capture the attention of all those eyeballs. At least what they hope they will do.
The move is brilliant, but it doesn’t guarantee success. Facebook desktop attraction started to lose some of its lustre and consumers have cooled off a bit. It will be interesting to see how the consumer will feel when Facebook is in their face all the time. Mark Zuckerberg describe Facebook Home as “highest quality experience you can have on Android“. If this is true, then the chances of broad adoption are greatly enhanced, but if not, the brand might suffer. The highest risk for Facebook is that although this move is brilliant, it may be too brilliant for their own good. Users may feel Facebook is too much into their lives. Success could irritate because by occupying the space in a dominant way it causes resentment. We have to wait and see.
It Facebook is successful, this may lead to the demise of good old phone number system. Instead of calling your friends using the telephone system, you just talk to your friends using the Facebook voice or video chat. Your Facebook ID could well be your next phone number.
Microsoft is about to releas a ‘new’ Bing which promises “Transforming Search from Finding to Doing”. It will be rollout in US in early June over the course of few weeks. There is no word if these features will be made available to the rest of the world. Microsoft calls this the most significant upgrade since the Bing launch three years ago. It may be one of the most significant changes in the online search industry.
What is so different with the new Bing this time?
The page layout is changed. The left bar where you have Related Searches, Search History and Narrow by Region is gone. Instead the page has now three columns: the search results, the snapshot and the social. Microsoft says that the search engine will return more quality results which will be less cluttered by irrelevant data. That remains to be seen, but while it is not clear how much of the engine was changed, the two new columns are interesting.
The snapshot is meant to display right there in the middle essential information, the most pertinent response to your query, packaged in a way that describe the findings from multiple angles. I don’t know how they do this because it could be that they re-packaged the old Bing with a different appearance or it may be they went deeper and changed the rational side of the Bing’s brain by adding a brand new semantic map builder. The example given by Microsoft is a classic case of a user who wants to find a hotel. Bing tries to build in the snapshot a story around this subject, so it displays a map, room rate, some links to related services, and traveller recommendations collected from various web sites. This sounds like the old Bing. However, if beneath the hood the software ‘thinks’ about the meaning of the hotel and uses a semantic graph to pull in related information, the prospects are completely different. This is how I read into what Derrick Connell, the Bing Corporate Vice President, said when he referred to a new scalable technology. Connell says that Microsoft will expand the snapshot to include more and more attributes around searched subjects. I guess that when a search command is issued, parallel searches are run automatically based on the semantic graph, even if the user doesn’t mention any of the inferred attributes. It will be interesting to see how this evolves.
The most interesting bit though is the social bar. I am very pleased to see this. My research on knowledge behaviour around adoption of innovation indicates that people rely a lot on social networks, even when they don’t call on friends for help explicitly for help or advice. When information is not searched but stumbled upon, that is a case of serendipity. This type of accidental finding has been ignored most of the time in the past, but it is increasingly obvious that it has a key role in knowledge behaviour.
Where is Microsoft going with this is not clear yet. I am not sure if this is a Facebook only feature or if it is a social aggregator. But the fact that you could ask your friends about what you are looking for combined with serendipity (the lower part of the social screen has that role) is a very interesting development.
Certainly this looks very good for Facebook. It is very good for Microsoft because it suddenly it creates a social opportunity in response to Google’s ambitions in social networks.
Microsoft did something clever here: it removes the social content from the search results going in an opposite direction from Google. I think this is a smart move for two reasons. Firstly, the relevance could be a problem if the results include your social status updates, and secondly, people are a bit off about the idea of mixing social activities with search. The reaction to Google’s decision to mix Google with Google Plus and Gmail was not enthusiastic to say the least. But if you have two separate areas that work side by side and you are the one that decides when to use the social features, it looks more appealing.
The snapshot and the social bar have the potential to change the face of online search. One hint is the appearance of ‘Like’ in the social bar. The synergy between search and social activities could take many forms here with profound consequences, because each of these two represent aspects of our persona that until now have been separated. Facebook does not have a search engine and Bing does not have a social network. On the new page they are still separated, but you can make the connection. The ‘Like’ is about your friends and their preferences. In the future other social signals could be used: location, recommendations, photos, music, etc. The possibilities are barely visible at this stage.
Big moves are made by Apple and Nokia in trying to set the path for long-term domination in the Chinese market. The way Tim Cook’s visit in China, was presented by the media you would think he is actually a head of a large state than the CEO of Apple. But if you think about it, Apple IS like a country as it has a market cap that makes it larger than many countries and the European Union’s officials would kill to have its cash reserves. During his tour, He visited Foxconn’s iPhone production line, which employs 120,000 people, just after it was revealed that Foxconn bought a 10% stake in Sharp, he met with Beijing’s mayor, and he had long discussion with the Chinese Vice Premier Li Keqiang who may be the next China leader.
Meanwhile, Nokia worked out an exceptional arrangement with AT&T. The carrier will start selling Lumia 900 at a price that defies gravity, $99, and its device head Jeff Bradley promised the biggest smartphone launch ever.
But this is nothing. Nokia has a very stronghold in China. To protect that advantage, while attacking Apple’s strong base in US, Nokia has accelerated its work in China as well. China Telecom will launch Lumia 800C and Lumia 610 with other carriers lined-up to do the same. Let’s not forget, in China Nokia is the largest smartphone maker. Stephen Elop, the CEO of Nokia has been pressing flesh in China recently working hard to support and grow Nokia’s relationship with the local partners.
Nokia also recruited Adam Guli to help Nokia in its race against Google’s Android and Apple’s iPhone. The US market is big and key to success, but as China will become the largest smartphone market in the world at the end of this year with over 140 million handsets estimated to be sold this year, conquering the Chinese market is vital in the quest for the world domination. The exciting part is that China is far from being done yet.
This is almost like a diplomatic battle with scenes cut from historic movies. And then, somewhere, barely noticed, Mark Zuckerberg, casually dressed, walks through Chinese cities claiming he is on holidays. Yeah, right! There are 460 million reasons why he shouldn’t be just a tourist. Besides, in these smartphone wars, Mark is not really a 100% neutral observer. He needs to pick a winner and have Facebook show up on as many smartphone screens as possible. I would not be surprised he will do something with Nokia, since Facebook has a slight affinity with Microsoft and tensed relationships with the other two.
Who else is missing in China? Steve Balmer? He is too quiet. Something is going on there.
This year will be a huge year in mobile computing. And Windows 8 hasn’t been launched yet! The stakes are high. A lot of commentators have already concluded who the winners are in the mobile phones market. However, I am not so sure. The Asian market has not matured yet, and the Android platform is too fragmented. Nokia new Lumia handset line based on Windows Phone operating system looks superb. Nokia is one of the finest operators in this market and it is perfectly capable to challenge both iPhone and Android systems. Almost everyone has written off Microsoft. Does Apple or Google think the same? That would be a serious mistake. These action packed visits in China are a strong indicator that the fight in this market hasn’t revealed the long-term winners yet.
It is easy to think that online search consists of entering keywords on Bing or Google web pages followed by hitting the “search” button. In reality, there is a lot of search that takes place in the mind of the searcher. Part of the information behaviour, better called human information behaviour (HIB), searching plays at multiple levels: cognitive, emotional and situational. Psychology has a great role in the information behaviour. The design of information system user interface has only recently started to take into consideration the human aspects of searching and the fact that seeking information is far from being a linear process limited to the use of sequential keywords.
The quality of search is perceived as the degree in which the search engine responds to the explicit query, but this is not that simple. The user doesn’t always know which keywords to use for searching. Very often the user wants to broaden the search scope, delegate control and navigate through responses offered by the search engine to discover new information. This is a learning journey that many users prefer when the problem is not clearly defined in their mind and they feel the need to know more before they actually decide where to focus their information search moving forward.
The opposite of direct response, which is an area where traditional engines have tried to excel, is a situation where the search tends to broaden rather than focus. This divergent search is most appropriate for creative situations when users acquire new information outside their domain of expertise. Convergent search focuses on what the user knows, while the divergent search is about discovering new things, and adopt a multi-disciplinarian attitude.
Facebook is clearly in the camp of divergent search despite the obvious lack of search capabilities. In fact FB friends find a lot of information on Facebook, but not by way of convergent search and by seeking specific information. On Facebook users encounter information. With each visit, through sharing information is presented to the user in the Newsfeed in form of links and commentaries. This is not an accidental feature. This year Mark Zuckerberg announce the addition of a new and powerful feature called serendipity. It may seem innocent, but this feature is very powerful because it brings friends closer and because it has a subtle attraction that keeps users coming back to the web site. And of course, it is a key element in the Mark’s strategy to gather as much information about our habits and wants.
Of the two ways of finding information, search and encounter, the latter is one that requires the least amount of effort on behalf of the user. Couple that with the element of surprise and reward that comes in form of viewing a funny video, learning something interesting, listening to a great song or reading a captivating article, when none of this could have cross your mind without at least putting in some effort, and you get hooked. Serendipity is one of the most powerful ways of finding information you did not know you needed or wanted.
The job of search engines is difficult because it requires the user to think and make an effort to research their own information need. It is like work. That is Google and Bing. Facebook on the other hand is strong on serendipity which is fun and enjoyable and very, very social. Not only you find information, but you get to leave comments, “like” and be “liked”. On search engines, no one likes you.
A product is an inanimate entity. This is what you think when you reverberate this word in your mind. A radio, a DVD player, a car, a software application or a bottle of juice are some of the typical products that we use on a daily basis. We just use them, right? We take that usage has the same underlying physical aspect. We drive the car, we drink the juice, and we listen to the DVD player, etc. by making a series of mechanical movements. It is so simple. Why is then the design of these products so complex?
The reality is that when we use products, no matter how simple they are, we register emotions that are either directly or indirectly caused by the act of use. We may experience pleasure, or frustration or the feeling we are important and get good feedback from others. These emotions define us and they are shaped by our personal history and by what these products represent to us as influenced by social norms. Each emotional experience is deposited in layers of memories and from which we draw inspiration when we decide what to buy.
The product design is complex because understanding how these memories are generated and influence our buying behaviour is very difficult. A hundred years ago this didn’t matter. A man produced a pair of shoes and another man bought them, or bartered to get them, because this is what was available. It was a simple matter of matching money with the product. When you got the money, you rushed to buy the product. You didn’t have much choice then. It was cold, the feet were hurting or the shoes you were wearing were ragged, in a deplorable state, so you had to buy those shoes, if you had the money. It didn’t matter if you didn’t like the producer. This was a matter of physical practicality.
Today is a bit different. You choose before you buy, and this is where all those memories kick in whispering in your inner ear what to do. By the time you execute the purchase, your mind already processed lots of whispers and it was set up to make a decision before you even knew it. This is a cultural process. It is both a translation of your cultural heritage into action, but also it micro-contributes into the big cultural cloud we are part of.
Understanding the cultural process behind the purchase is important for product design in a broad sense. Whoever captures those cultural nuances in the process of product design has a sharp competitive edge. This is where the social networks are so powerful. Of all networks, Facebook has its own competitive edge because it has figured out quite a bit how this cultural process works.
The “social network” is the buzzword of the day. Omnipresent in the social media, on TV and printed magazines, it is the darling of researchers around the world. Collaborative participation makes the social network, probably the biggest innovation since Internet, a positive phenomenon. Bringing people together to collaborate on solving problems releases a huge amount of creative energy on a global scale. Social network is a mystery as well: why are people so attracted to social networks?
In the past few years, a huge wave of websites built around the core concept of social network has been quietly gathering momentum. These systems link people, information and things through social relationships and essentially they try to solve a resource allocation efficiency problem by creating superfast links that have the effect of eliminating a real or an imaginary middle-man. If you think about it, the social network as it is understood today is the in fact another expression of the intrinsic social network that is the Internet.
To use terminology borrowed from psychology, the social networks (like Facebook) are conscious social systems, while the Internet is the massive subconscious domain that no-one can ever measure or fully understand its inner workings. When we look at social networks we only see a tiny little tip of the iceberg as what really drives us is way down below the surface. In this post I am looking at behaviour towards consumption mediated through social networks.
At its core the social network is a way of trading ideas between participants. If you abstract the social network to a system where parts exchange things through the use of an agreed currency, the social network is really an equalizer that moves things from one part to another in an attempt to restore equilibrium. If there is no external input, with time the system would reach that point. But as it happens, the social systems are far from being close and events keep triggering new imbalances and social networks busy: there is always something to talk about and share.
In its first iteration as a digital network, the web was a system that united resources using hyperlinks. Later with the rise in computing power, the hyperlinks started to be used to bring people together through more sophisticated interactions. Merely accessing documents (resources or things) across network was not enough to establish equilibrium. Discussions needed to occur to solve more complex problems, hence the need to facilitate communication between people using the very same network. People became extensions of things and things became extensions of people.
The social networks have generated a boom in communication. Not only has the communication gone up but the number of social networks has gone up, which leads to even more communication needed to trade and reconcile different ideas. You can hardly find a more powerful addictive cycle than this.
There are three distinct phases in the history of social networks on the Internet (so far): linking resources, linking people and linking services. The first phase was marked by the invention of the HTML, the second was marked by the rise of Facebook and the third is underway right now. This is about linking services in its many forms. Think ZipCar, Foodspotting, DriveMyCar, TaskRabitt, AirBnB and many similar applications that link people and services and things matching demand and supply at a scale, transparency and affordability that was never possible before Internet. The third form is social networked consumption, because in addition to performing the functions of the previous two forms it plays direct roles in the consumption supply chain (for example marketing and distribution).
The underlying phenomenon is the collaborative sharing that occurs in many ways from simple posts to feedback and rating and from questions and answers to actions that end up in economic transactions. Why are so many people suddenly ready to share things for free or pay a small fee for using someone else’s asset or mini-service?
Let’s assume this will go on and spread like wildfire in the next five years. One could say that this is a very efficient way of using resources which in the long run is good for the environment. People will learn how to live by consuming less and focus on social values. If we look into the future and extend this trend there will be a point where production would have to go down drastically because the use of the goods is so much more efficient through instant sharing.
This newly found frugality would see the auto manufacturers pulling their hair in desperation because instead of five families buying five cars they will buy maybe two cars and share them. Of course this is a totally theoretical speculation because in practice it is difficult to share assets to perfection in such a way that the usage level is constant but the number of resources is greatly diminished. This schedule is impossible. Nevertheless, the demand for expensive household products would have to come down if this model becomes a general life style choice.
The creativity born out of social sharing will find many ways in which the trading of personal ideas, goods and services through social networking will flourish. I wonder how much the financial crisis, the globalisation and the changes in the job market have contributed to the popularity of social network based services. The vast digital networks contribute to enhancing the capacity of countries and cross-border alliances to respond to crises. This made possible handling the GFC in a way that was not possible in 1929. During The Great Depression people suffered in isolation for a long period before the economies managed to restore the pre-crisis levels of prosperity. Imagine how different that era would have been if they had Internet.
If this trend continues, how would the world look like in five or ten years? I tend to believe the pendulum would have to swing the other way from diminished consumption to increased demand. There is a limit for how much you can share the same things. Reusability is not addressing the demand for novelty. But if the underlying motive is to buy more with less money, the downside is the cultivation of a society with an even bigger consumerist appetite.
Pay for use only is a convenient way to deal with immediate financial uncertainty and postpone expensive decisions, but it is also creates the illusion of more disposable cash. This will compensate for the initial drop in demand for expensive goods in form of full ownership by creating demand for other services that can be consumed frequently but require no big commitment, such as travel, entertainment and fashion. For instance, once the new pay for use system will become an establish business model, the number of cars on the road will keep growing through big businesses owning large car fleets and manage them with a sophisticated scheduling and mapping system that combines renting with other innovative related services.
In the end, what appears to be a cheap way of buying the pleasure with less effort, but no ownership, it may be a very expensive price to pay in the future. It is a deal that may haunt next generations of renters because it creates even more uncertainty. There will be fewer owners, but those who own these assets will amass fortunes by charging large number of renters a pay-per-use transaction fee. The next generation of renters will not be able to go back to full ownership because they will have acquired the taste of a pleasure driven life style and it will have no means to purchase outright the cars or other similar assets because they will be deemed to be too expensive to afford buying them.
A glitch in the future social system will cause a great deal of stress to people who have no plan B. It is very difficult to estimate the impact on the psyche of a population with limited or no ownership. Will it diminish the peoples’ sense of responsibility? Will it propagate a culture of superficial consumerism, work for immediate pleasure?
This superficial consumption practiced through cheering social networks may be a Faustian deal in which a temporary sense of security is purchased to avoiding the pain of long term commitment and the hardship it brings with it only to bring an irreconcilable regret later on.
The owners of the social networks will stand to benefit even more from those who make up the network. But this is another story.