Twitter’s Facebook Smackdown

If I HAD A WEB 2.0 COMPANY…

…that had more than its share of technology issues…

…and no clue about what business model would enable it to actually generate revenue…

…and some firm came along offering me $500 million in stock for my company…

I WOULD SELL IT BEFORE THE ACQUIRER CAME TO ITS SENSES.

But faced with the (well, kinda) same set of circumstances, Twitter decided to pass on a $500 million stock offer from Facebook.

Is this a reflection of Twitter’s belief that its worth a lot more than $500 million? Possibly, but I would hope not.

All Things Digital reported:

It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity — even with the economic downturn — to blow this thing out.”

One commenter on the site remarked: “In my opinion, the two communities just wouldn’t mesh well.”

Just my opinion, but neither of these views nails the real issue (Facebook can hardly be considered a single community, and the overlap between Facebook and Twitter users is huge, so the commenter is really off-base).

My take: Twitter’s rejection reflects its take on Facebook’s future valuation.

I said this during the dot-com boom eight years ago, and it holds true today: For all these (now Web 2.0) firms to succeed and thrive, advertising is going to have to account for a greater portion of GNP than healthcare and financial services — combined.

And that’s simply not going to happen.

It doesn’t add up. On one hand, to garner a multi-billion dollar valuation, a Web 2.0 firm needs to have mass appeal. But on the other hand, the pundits yell that “mass media advertising is dead!” If shoving advertisements in the face of people on TV, in magazines, and on other Web sites doesn’t work, then why would it work on Facebook?

 Even Google is diversifying its revenue stream, and has seen its licensing revenue (which admittedly only accounts for about 3% of revenue) grow by 2.5 times its 2007 level through just the first three quarters of 2008.

Twitter is making a smart move by passing on this deal. Not because it’s worth more than $500 million today, but because that $500 million might not be worth as much in the future with Facebook as it would be with some other firm.

Technorati Tags: Twitter, Facebook

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Today’s Social Network Is Yesterday’s

Dateline: April 2008, Toronto, Canada

Scotiabank announced that it is using technology from Microsoft to introduce an internal Web 2.0 social networking platform aimed at encouraging information sharing and collaboration among its staff. Robert Fournier, SVP, Enterprise Architecture and Methodology, Scotiabank, said: “By leveraging the knowledge and experience of the Scotiabank team with a business focused social networking platform we are enabling staff to better serve customers by sharing best practices and identifying experts and skill sets regardless of geographic and organizational boundaries.”

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Dateline: April 2003, Toronto, Canada

The Bank of Nova Scotia announced that it has implemented a new Intranet Portal using Microsoft technology aimed at encouraging information sharing and collaboration among its staff. Rachel Threemont, VP, Internet Technologies at the bank said: “By leveraging the knowledge and experience of the Bank of Nova Scotia team with a business focused intranet portal platform we are enabling staff to better serve customers by sharing best practices and identifying experts and skill sets regardless of geographic and organizational boundaries.”

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Dateline: April 1998, Toronto, Canada

The First National Bank of Nova Scotia announced that it has implemented a new knowledge management application using Microsoft technology aimed at encouraging information sharing and collaboration among its staff. Richard Toofer, VP, Knowledge Management at the bank said: “By leveraging the knowledge and experience of the First National Bank of Nova Scotia team with a business focused knowledge management application we are enabling staff to better serve customers by sharing best practices and identifying experts and skill sets regardless of geographic and organizational boundaries.”

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Dateline: April 1993, Toronto, Canada

The First National Bank of Halifax announced that it has reengineered its information sharing and collaboration processes using Microsoft technology. Rose Oneoff, the bank’s reengineering czar said: “By leveraging the knowledge and experience of the First National Bank of Halifax team with a reengineered business process, we are enabling staff to better serve customers by sharing best practices and identifying experts and skill sets regardless of geographic and organizational boundaries.”

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Dateline: April 1987, Toronto, Canada

Halifax Community Bank announced that it has implemented a local area network (LAN) using client/server technology from Microsoft aimed at encouraging information sharing and collaboration among its staff. Ralph Zeroe, VP Networking Technologies at the bank, said: “By leveraging the knowledge and experience of the Halifax Community Bank team with a LAN, we are enabling staff to better serve customers by sharing best practices and identifying experts and skill sets regardless of geographic and organizational boundaries.”

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Now what was that new thing you wanted to tell me about?

Technorati Tags: Social networking

UPDATE: Apr 2 10:17 PM EST. Before leaving a comment, go back and read the names of the people quoted. Thanks.

Why Developing Customer Relationships Is So Hard

The Harvard Business Review recently interviewed psychologist John Gottman, the executive director of the Relationship Research Institute in Seattle. Although Gottman’s work focuses mostly on interpersonal relationship (in contrast to business-customer relationships), many of his comments are pertinent to marketers. According to Gottman:

“Good relationships aren’t about clear communication — they’re about small moments of attachment and intimacy.”

My take: I’ve tried to convey the same sentiment when writing about the stories loyal customers tell. The stories loyal customers tell come from experience — and those experiences are often not planned and/or orchestrated. This has huge implications for marketers striving to build strong customer relationships. It implies that the best you can do is establish an environment that enables these “small moments of attachment” to happen, but that consciously trying to create them may seem forced or unauthentic.

Gottman also says that:

“Successful couples look for ways to accentuate the positive. They try to say ‘yes’ as often as possible.”

My take: I wrote a while back, in a post titled Trust Is A Two-Way Street, about the experience a fellow blogger had with her bank, in which her bank didn’t believe her when she said she had called to file a claim. Gottman’s comment echoes my sentiment that building a relationship isn’t simply about saying “trust us” but saying (and demonstrating) “we trust you.”

For many marketers, the notions of “small moments of intimacy” and “mutual trust” are foreign concepts. The result: While marketers talk about customer relationships, few (if any) really have an underlying sense and understanding for what that really means. And few have developed effective metrics to capture the strength of their customer relationships.

Technorati Tags: Marketing, Harvard Business Review, John Gottman, Relationship Research Institute