Otis Chandler's Reviews > The Facebook Effect: The Inside Story of the Company That is Connecting the World

The Facebook Effect by David Kirkpatrick
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Mar 22, 11

bookshelves: business, nonfiction, geek, biography, computer-industry
Read from November 27 to December 12, 2010

This is a book that every entrepreneur definitely needs to read, and everyone who works even remotely with Facebook needs to read. It does a simply amazing job going behind the scenes of Facebook and describing where the site came from, how it got to where it is, and where it's going.

The author had amazing inside access to Mark Zuckerberg and other key Facebook employees and investors. Very smart of Facebook to include David so often - it makes their story fully open, which is consistent with the values of their company - not to mention good PR.

The biggest takeaway I had was that Zuckerberg actually has much more of a vision and philosophy than I gave him credit for. The basic vision for Facebook is that it's a communication tool. It's very interesting to see that they think of it as a utility tool and not a media destination (like MySpace no doubt does). It means they are not afraid of sending traffic away from their site as long as they provide value up front - something that has been crucial to their success.

Zuckerbergs philosophy however is more interesting - he believes being open is better and will lead to a better society. He thinks the internet will inevitably enable this anyways, so Facebook might as well lead the charge. It's an interesting and idealistic philosophy - basically that it's really hard for a person to be dishonest or immoral in any way if their whole life is laid open to their friends. In fact, one has to strive to be an even better person, because everything we do is not being tracked and if it isn't already online, it will be soon. The books we read, the things we buy, the people we date, the places we go, the people we associate with - all this is online, and defines who we are. Would my future children be proud of me if they examined my life's consumption? If I knew they were going to do so, would I make better choices? Absolutely.

However the privacy road has rocked many people's worlds who haven't gotten the hint yet and EVERYTHING you put online, whether on Facebook or a seeming private place elsewhere, is ultimately public. The chapter on privacy listed many of these horror stories, and I certainly know more than a few stories of people who have been burned by having an inappropriate photo on Facebook or tweeting something inappropriate. The road to openness is happening - and I think Mark is right that it's going to make us better as a society. The danger, however, is that it will still cause many people a lot of pain as we get there - and may cause many to ultimately retreat from Social Networking (and the internet). I think Mark knows his responsibility there as his service depends on it, and I hope he's a good steward, as this is certainly a topic we debate a lot at Goodreads.

I worked in Social Networking during the Rise of Facebook - my company, Tickle, is even mentioned a few times in the book. This book made the mistakes we made at Tickle even more apparent. Hindsight is a ...! For instance, starting with colleges that were *private* was what really worked - everyone had no problems sharing everything with their fellow classmates and alums.

Facebook's biggest product innovation though was of course Platform. Followed perhaps by the Like button and Facebook Connect - which are really only possible because so many people use Facebook. Both were big wins, and were interesting pushed hard by Zuckerberg, and their success really validated him as a leader internally.

One interesting note that I hadn't considered was that because everyone uses their real names on Facebook, blogs that use Facebook Connect for comments (eg Huffington Post) don't have the troll problem as much, because of the openness issue (see above).

The book was also very interesting as it gave a lot of the details of how Facebook was financed, how the VC deals were structured, what sort of offers it got, etc. Zuckerberg was courted to sell by so many large companies, I had always wondered how he had the nerve to say no - most in his shoes would have sold out for millions or billions long ago. The answer seems to be that he doesn't really value money, and also that he knows this is his big Life's Opportunity to change the world - and to sell now would be to squander it.

The book also gave interesting insight into where Facebook thinks they are going. In the future they think they will be less of a destination site, and more of a social communication enabler. Everything that can be social will be, and it will be done with Facebook. Every website you visit, your TV, video games, and perhaps even your cereal box will one day have Facebook Connect.
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Quotes Otis Liked

“But like the best empire builders, he was both very determined and very skeptical. It’s like [former Intel CEO] Andy Grove says, ‘only the paranoid survive.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“In Friendster's wake, a throng of social networking sites blossomed in San Francisco attempting to duplicate its appeal. Each tackled the idea of connecting people in a slightly different way. One was Tickle, a service which, on observing Friendster’s broad-based appeal, altered its own service, which had previously been based on self-administered quizzes and tests. Two of the other new social sites—LinkedIn and Tribe.net—were founded by friends of Abrams.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“By early 2004 Tickle had become the second-largest social network after Friendster, with two million members actively connected to others and exchanging messages.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“Cohler advertised for summer interns, then sometimes told promising applicants when they came for an interview that Thefacebook was only hiring full-timers.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“This thrilled Zuckerberg, whose primary measure of the service’s success was how often users returned.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“Revenues were, according to well-informed sources, more than $550 million for 2009—up from less than $300 million in 2008. That represents a stunning growth rate of almost 100 percent. The same sources say that the company could exceed $1 billion in revenue in 2010.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“For users, Facebook Connect offers what could turn into a universal Internet log-in. Over 80,000 websites use it in some fashion, as of February 2010, and 60 million Facebook members are actively employing it.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“Mark has the most long-term perspective I’ve ever seen. This guy is uber uber uber on the long-term view.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That is Connecting the World

“He sent Zuckerberg a letter proposing Viacom would pay $1.5 billion to buy the two-year-old company.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That Is Connecting the World

“Facebook also has a fundamental characteristic that has proven key to its appeal in country after country—you only see friends there.”
David Kirkpatrick, The Facebook Effect: The Inside Story of the Company That Is Connecting the World


Reading Progress

11/27/2010
13.0%
12/04/2010
64.0% "Fb on pace for 1 billion in revenue this year"

Comments (showing 1-11 of 11) (11 new)

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message 1: by Patrick (new)

Patrick Brown Ha. Sticking it to Fortune, eh?


Otis Chandler Lol. I guess so.


message 3: by Trish (new) - added it

Trish Excerpts that make me want to read it and that's after The Accidental Billionaires, which was terrible.


Brian Trish, totally agree on your assessment of Accidental Billionaires...and I've usually found Mezrich to be an entertaining (at least) writer. Planning to read this to cleanse my Facebook-related palate.


Otis Chandler Another friend also just told me last night that accidental billionaires is to be avoided.


message 6: by Lisa (new)

Lisa Vegan Very informative review, Otis.


message 7: by Scribble (new)

Scribble Orca While I think the sentiment worthy, that the more public we are required to be, the more likely we are to make better decisions, I wonder whether by the time everyone is airing their laundry under the noses of their neighbours, the technology will not simply be subsumed to government purpose.


message 8: by Lisa (new)

Lisa Vegan I'm not so worried about the government, but I do feel as though he's missing the point about what intimacy is.

I have many friends. I'd say a half dozen know everything about me, about dozen know almost everything about me, and it goes down from there. Some of my facebook "friends" are more like acquaintances than friends. We have different levels of intimacy with different people in our lives. AND, many of the posts on facebook aren't very revealing, or interesting either.


message 9: by Judith (new)

Judith Symonds Thanks for posting the review Otis. I appreciated your comments about your takeaway from the book the most and find it fascinating how even on the Internet the flow of the life force needs to be both in and out rather than only in as with a 'destination' site. Thanks again Otis.

~ Judith Symonds


message 10: by Trish (new) - added it

Trish S'good. Will pick it up when opportunity provides.


message 11: by Ivan (new) - rated it 5 stars

Ivan Escobar Very good review. Facebook is actually a revolution in the world and this book teach us how has grown the company.


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