Live-Blogging a Facebook Chat Product Launch at the Start of "Launching Season 2011"

Today, Facebook is launching a new product at its Palo Alto headquarters. The company has done far fewer press events like this in 2011 versus last year, especially last fall. The previous one was in early April, about something different -- its Open Compute data project. Our paraphrased live-blog, below: 10:14 Mark Zuckerberg is on: Today marks the beginning of "launching season" of 2011. [He tells a story about a neighbor asking for video chat.] But I want to talk about the bigger trends. It's always about connecting people. "Looking at all these new people getting connected." Until the last couple of years, most people really had open questions about whether social networking would be something that reaches everyone in the world. That chapter is more or less done at this point. Sure, we're not everywhere yet. But there's this clear arch where now the world generally believes that it is going to be everywhere. People want to stay connected. Somebody's going to be building tools. Metric has been user growth. One of our engineers at a hackathon built a visualization of the world, between people in different places. The next five years? Yes, connecting us, but it won't be wiring up the world. It'll be about the cool apps you can build, this wiring and social infrastructure. It really reminded me of those maps of the internet. When it was first developing, really serious companies built up in specific areas, where it's the best that they can do. 10:20 One thing that's important is how you measure these things. If you measure in active users, that doesn't tell you everything. The amount of stuff that the given user shares today is about twice the amount they shared a year ago. Then twice as much a year from now [and so on]. They started off sharing one thing a week, then sharing a ton of stuff. One of my investors likes to say that humans are bad at estimating exponential growth. If you took a piece of paper and folded it 50 times, most people think it'd go a few feet, but it'd actually go to the moon and back 10 times. It's growing at a much faster rate than user growth. We've grown to 750 million users. But sharing has grown much more. [Then he talks about Moore's Law.] 18 months from now, 36 months from now, we see our own growth and the growth of the Facebook ecosystem, you can plot this same sort of trend out into the future. 10:25 What types of apps will need to exist 3 to 5 years from now? If you look at where the site started off, you can see that people share .1 things a day. Then built more and more. Photos. Way before mobile photos, so mostly big albums. Once every few weeks on average. Then news feed increased the rate of flow. Platform brought a whole new wave. Then the Like button, Groups, lighter-weight messages. More than 4 billion things shared every day. The stuff that we're doing today doesn't have to do with today. There are three specific things. 1. Group Chat. More than half our users are using Groups. Really powerful. Not everyone does sharing. We want to make it so you can do ad-hoc chat as well. 2. New Chat design. Reported awhile ago that there are billions of messages going through our chat system per day. One thing that's been surprising to us is how hard it is to find people who are online. If we can make it so people who have the screenwidth to run the normal Facebook and run a buddy list, we think a lot of people will want this. We're already one of if not the biggest chat service in the world. 3. Video calling. We're doing this with Skype. This is symbolic of the type of way we'll do these things. As I was talking before about building these social apps on top of this social infrastructure. 10:30 I can go to Peter's profile [an engineer], something will pop up on his screen showing that I'm calling him. Then download the plugin and we start chatting. The system already knows we're connected. Not the case like with traditional Skype where both people need to download it beforehand. Something else about our relationship with Skype. We want to focus on social and let the others do other things. [Peter Deng, the engineer, comes on stage.] People love groups, and love chatting with them. Because these groups are on average 7 people per group, you really have these intimate conversations. Ad Hoc Group Chat. Let's you immediately create new groups. New Design. Takes into account your browser. Automatically shows you side bar if your browser is wide enough. Also shows friends who are not available. You can still send them messages. One-click access to people you message most. Simplified Chat. Adapted design to what we'll be doing in the coming months. In addition, an icon for Now Phillip is going to give a demo of video calling. 10:35 Hi, Im an engineer in Facebook's Seattle office. A great feature that we're rolling out today, you can get to not just through the chat tab but through the profile. Click, call, connect immediately. Instead of just telling you about the feature, let me show you the feature working. [He shows the feature working.] 10:40 Tony Bates comes on. The partnership started off with us taking feeds, contacts, integrating IM. We'd already cracked the desktop. We started to make our way into the living room. There's no greater place to get to the web than Facebook. The technology itself, it's tough. We're getting to billions of people. When we started working on this about 6 months ago, it became clear that we could establish a long-term strategic benefit for both of us. We have folks [across the world] working on it. We have a shared vision of what communication can mean. [Zuckerberg is back on.] 10:45 Bates and Zuckerberg are answering. All are Zuck unless otherwise noted. Q: What about group video chat? What do you think of Google Hangouts? A: We had worked together before the Microsoft acquisition. I wouldn't rule anything out. Wouldn't undervalue what we're doing today. Most chat is one-to-one. You'll see a lot of companies that hadn't traditionally looked at social networking in their apps, that will look at it. Netflix comes to mind. They want to do social stuff well. They haven't, traditionally. Now that there's the social infrastructure in place, we'll see a lot of companies trying to build on top. Q: For Tony. Any issue with people switching from Skype to Facebook usage? A: For us the most important thing -- our goal is a billion [users] and this will help us get there. We talked about it early on. Q: How would you accept a video integration? A: [Zuckerberg re-explains video chat.] Q: What's in it for Skype, financially? A: Bates: We're not talking about features, but I did allude to the fact that there'll be a way to get Skype paid products. Q: What about mobile applications on tablets and smartphones? A: Mobile not ready yet. Inbox is actually the same as the IM that pops up, but you can also have those conversations from your inbox in mobile. These are mostly web features for now. We develop in an iterative way, making one thing really good. Q: Our question of the impact on the infrastructure. This is obviously a huge load. Build your own data centers? We're definitely on this trend now, given the scale of usage and information flowing through the network, where we'll be building our own network. Skype worked because it was all peer-to-peer. That part is built by Skype, and the reason they have such widespread adoption, before broadband, they had a way of doing video calling that was low bandwidth but good enough that people loved it. Bates: Think of this as a mini Skype client, powered by the same technology. Q: What is the current overlap between Facebook users and Skype users. A: [Neither knows. They don't track.] Q: Any financial terms? To what degree did Microsoft relationship play in. Same free Skype service, but trimmed down to fit within Facebook. Now we're figuring out what to do next. Before it'd been inside Skype. This turn is inside Facebook. We'll see what demand there is. Group chat, etc. We have a really good relationship with Microsoft. Then Bing. Now this. It would have been fine when you were an independent company, too. But now that you're owned by Microsoft, this gives a sense of stability too. Bates: The day we announced, we went to see Mark. It was one of our most strategic relationships. Q: What's happening in terms of group management and friend management over time? A: People are sharing with different audiences. If this doubling keeps on playing out. 32x times in 5 years, etc. Some are going to be passive. Please share this app. Another one is going to be mobile. Now instead of just being at a computer, it'll be mobile. Who you share with, social norms, small groups. We've focused on groups. The definition is a group in which everyone in it knows everyone else in it. We've just found that the majority of users don't want to take the time to configure things themselves. Even just accepting friends, they'll never go out of their way. They'll be passive, and only get pulled in when enough of their friends pull them in. One of the reasons that half of the user base. Friend lists -- only ever 5% of the user base has ever adopted those. Biggest traffic driver is apps -- integrate. Mobile is by far the second. Third is segmentation into groups, etc.

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Live-Blogging a Facebook Chat Product Launch at the Start of "Launching Season 2011"

Eric Eldon

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