Facebook Acquires Interest Graph-Focused Question and Answer Service Friend.ly

Facebook has acquired friend.ly, developers of a Facebook-integrated website that lets users get to know their friend better by asking them questions about their interests. The friend.ly website will continue to operate, but the team will be “focusing on new projects at Facebook” according to an announcement on friend.ly’s blog.

The friend.ly team’s experience getting people to reveal things about their identities could help Facebook coax more biographical data from users. This data could then be used to strengthen ad targeting.

What distinguishes friend.ly from other question and answer services is that it bases the questions that it suggests users ask on the Facebook interest graph. Friend.ly pulls a user’s Likes and the Likes of their friends, and then suggests relevant questions.

For example, if it finds that a friend Likes “skiing”, it might suggest a user ask them where their favorite place to ski is. If a user Likes CNN, they might receive the question “What do you like about CNN?” Users can select to share their answers to their Facebook wall, Twitter, or the wall of an official Page related to the question, all of which drive referral traffic to the service.

This interest graph question strategy provides much more compelling questions than the random, spammy, or purposefully controversial ones suggested by some other Q&A services. This leads to a higher rate of users actually sending the questions and receiving responses back.

We profiled friend.ly in April during the middle of a rapid growth period brought on by this strategy. It gained 6.5 million monthly active users and 350,000 daily active users in a few short months. Since peaking in June and July, the site has fallen back to just 291,000 MAU 10,00 DAU. This could be in part due to a switch to less spammy tactics where sharing is opt in rather than opt out. Such respect for the Facebook user experience may have attracted the social networking giant as an acquirer.

The friend.ly blog post announcing the acquisition stated, “We’re excited about this because we feel the spirit of friend.ly aligns well with Facebook’s vision, and we’re thrilled to be joining such an innovative company.” The acquisition price hasn’t been disclosed, but some of it will go to compensate friend.ly’s investors who put up $5 million in funding, including Lightspeed Venture Partners, Balderton Capital, Ron Conway, Jeff Clavier, Naval Ravikant, and Michael Birch.

Friend.ly Could Improve Facebook Ads, Profiles, Questions and the New User Flow

Biographical and interest data powers Facebook’s ad targeting, allowing businesses to reach audiences who may be more interested in their products or services. The December 2010 profile redesign that brought biographical information onto the default view, and the new Timeline which makes a user’s media consumption activity visible both push users to provide more of this targetable data.

Friend.ly struck upon an effective, natural, social way to get users to share this same type of data. Through the acquisiton, Facebook could apply friend.ly’s team to building similar data solicitation into its future products.

Some possible projects it could work on are Facebook’s ads for Pages and the Suggested Pages sidebar module, both of which suggest Pages for users to Like. Currently, the products are rather dry, with following the suggestions seeming more akin to a chore than a fun way to express oneself. Facebook has removed the “Add Interests” step of the new user flow, so friend.ly could help rebuild it in a better way.

By integrating compelling questions about a user’s interests into Page ads, Facebook could provide a higher conversion rate that brands might be willing to pay more for. An improvement to Recommended Pages and the new user flow could help Facebook encourage users to Like more Pages so that their news feeds are filled with interesting content.

Friend.ly could also build a Q&A product into the user profile. This could give users questions to answer about themselves while viewing their own profile. These questions could increase the amount of time users spend on their own profiles, outfit the Timeline and news feed with high quality social content, and also provide Facebook with more targetable data.

The team could also be assigned to improving Facebook Questions, the social network’s in-house Q&A product that it launched as a knowledge base in July 2010, and redesigned as a lighter-weight polling app in March 2011. While fun for users and a powerful marketing tool for Pages, I rarely see Questions in the news feed and I don’t hear about readers or marketers using the product. Overall engagement may be low. Friend.ly’s knack for making Q&A engaging could help it fix that.

The friend.ly acquisition follows Facebook’s recent buyouts and acqui-hires of digital book creator Push Pop, developer tool provider Sofa, personal analytics firm Daytum, and HTML5 experts Recrec. When I spoke to Facebook’s VP of Engineering Mike Schroepfer last month, he told me about how Facebook has changed thanks to the talent from these companies:

Just out of sheer lack of teams we could only take on one major product at a time. As we’ve been fortunate to get more talented product folk and engineers, we’re now able to have multiple products in development at once. We hope to see a continued acceleration [of product development].

Friend.ly’s team should assist in this acceleration. With the team responsible for getting millions of users answering and asking their friends questions, Facebook can further its goal of getting users to share more, and improve its monetization at the same time.

Here’s Facebook’s official statement:

We’re excited to announce that we recently acquired friend.ly, a Silicon Valley startup that created a really compelling way for people to express themselves and meet others through answering questions. We’ve admired the team’s efforts for some time now, and we’re looking forward to having Ed and his colleagues make a big impact on the way millions of people connect and engage with each other on Facebook