The premise behind MyLikes is simple: we are more likely to trust the recommendations of our friends, colleagues and advisors more than we trust consumer ads and the opinions of people we don’t know (with the exception of Hollywood celebrities and sports stars because, of course, we all know they are completely believable, role models for our children and extremely well educated – sarcasm intended).

Here is some data that supports this thesis (source: Lies, Damned Lies and Statistics):

1.  83% of consumers globally are likely to visit a website are likely to visit a website recommended by a friend on Facebook, and more than half say comments posted on retailers’ Facebook and Twitter pages, whether positive or negative, also influence their opinions (2011 Global Consumer Shopping Habits Survey – Channel Advisor)
2. Consumer opinions posted online (70%) are more trusted than information on TV (62%), newspapers (61%) and online banner ads (33%) (Nielsen)
3. In Europe over 50 percent of respondents aged 16 – 64 with access to the Internet, use social networks to assist with shopping decisions and of those that would be likely to follow a retailer on a social network, 35 percent stated they use social media platforms to read reviews or rank products and services (IBM)
4. “Customers who engage with companies over social media spend 20 percent to 40 percent more money with those companies than other customers.” (Bain & Co)
5. A study in South Korea (a mature social media market) found that social impacts sales among moderate and heavy users.  Recommendations shared among moderate social media users increased brand sales by 5%.
6. However, heavy social media users also listen to negative chatter.  Brands talked about negatively experienced a 14% sales drop among this grow (Harvard Business School)
7. The heaviest Facebook users are also the biggest spenders online - the top 20% of users spend $67 per quarter, compared to $27 for non Facebook users (Comscore)
8. According to a Kantar Media study in the US, 35% of social media users say Twitter has influenced their purchasing decisions (Twitter links also result in more clicks than Facebook)
9. Even concentrating on smaller social networks can be commercially beneficial.  Radio Shack in the US found that customers checking into their stores on Foursquare spend 3.5x more than those that don’t
10. Super fans and advocates on your social channels are 50% more likely to create content that influences a purchase (ComBlu)
11. The picture is the same if you look at individual industries.   In the ‘quick serve industry’, consumers exposed to social media have a 7x greater likelihood of ‘higher spend’ (WPP / Ogilvy)
12. Meanwhile, 60% of consumers say they factor other travellers’ online reviews into their plans when booking a vacation / holiday (eyefortravel / Simpliflying)

What I like about the concept of MyLikes is they allow you – anyone – who has created a group of followers/friends through FB, Twitter, etc. to promote certain brands and content you trust to your personal community. In exchange, you get paid for making these promotions. Since it is easy to see what is “sponsored” content you aren’t duping your family, friends, colleagues and they, hopefully, see interesting content and/or products they might have missed if you didn’t share it with them.

I feel this has a beneficial effect for advertisers/brands in that there is typically implied trust between people who know each other; it is not likely we are going to spam each other and we are not likely to promote something we don’t believe in ourselves. I think it is this fact that makes the sponsored content received through this exchange that much more valuable to advertisers/brands.

To learn more, I wanted to try MyLikes for myself  - just to better understand how the process worked. It was a breeze to set up my MyLikes account and to link it to my PayPal account (you get paid when the sponsored content you send out via Twiiter/FB, etc. is clicked on so you need a place where MyLikes makes the payment.)

During the process, MyLikes asked me what types of conversations I typically engage in. In my case, it’s all about business issues and technology. But, if you are primarily interested in things like fashion, entertainment, celebrities, etc.  they can capture that.

Once I completed the sign up process, I was presented with a list of sponsored ads and the amount I would be paid if I sent them out to my network.

I realized that as I was going through the various sponsored ads, I immediately rejected anything I thought wasn’t relevant to the community of people I engage with.  For example, while interesting, I wasn’t about to send out the Sports Illustrated swim suit sponsored ad since this is inappropriate for my brand and for the professional community I interact with. For others, this content might be ok.

I did have a few things that I would suggest MyLikes consider changing over time:

• I would prefer that MyLikes only present me with content I would find highly relevant for my community. Right now, I need to scroll through a serialized list of sponsored ads that aren’t limited just to the areas I would find relevant.
• I would like to see them add the ability for me to rate each ad as to whether or not they are relevant to my community and to use this to filter which ads I am presented with.
• Having to go to MyLikes and select sponsored content feels non-intuitive to me. Instead, I would prefer to find content anywhere that I want to post to my social networks and at the moment of posting be prompted if I want to make it a sponsored post and select the advertiser from a small list of sponsors with whom I trust or new ones who want to compete for access to my network.

The real power of MyLikes’ approach, I feel, is the fact I am self-policing. No one needs to tell me what is appropriate or inappropriate for the community of people I engage with. If I were 15 years old with a bunch of friends, my idea of what is and isn’t appropriate would be a lot different.

This self-policing fact means that the “value” of the content I selectively choose to share with my community should be a lot higher with advertisers than ads generated through the popular ad networks. In other words, CPM rates for MyLikes should be a lot higher because publishers of the sponsored ads are filtering the ads for relevance.

There are other start ups that have been built around a “digital word of mouth” premise (e.g. Zuberance, Amplifinity, etc.). They, however, are primarily focused on providing tools/services for the brands and/or their agencies  to manage their communities. MyLikes, on the other hand, is focused on disintermediating the brands/agencies and putting power into the hands of consumers to decide what brands and what messaging is important.

Just as traditional brokerage firms were disintermediated by new firms such as Schwab and eTrade, there may be an opportunity to disintermediate the traditional advertising firms with these new approaches. We are only in the beginning stages of this transformation. It will be interesting to see where this ends up.

In the meantime, I posted my first MyLikes sponsored ad today. Now, all I have to do is wait for the big bucks to roll in!

Each of these teams is passionate about the products they are creating. However, many, in my personal opinion, share something in common that may prevent them from growing their companies as fast as they might otherwise.

Most are so intent on building their products for and then marketing/selling to daily practitioners they forget about creating a version of the product or a set of features in the product for the people who aren’t likely to use the product very often, or at all; the people who must approve the expenditure.

These are typically the CEOs, CFOs, CIOs and/or other senior executives.

This group may not necessarily appreciate the specific product features required by the personnel who will use the application/product on a regular basis but I believe it is critical to ensure that the product contain features that are directly applicable to them.

Without such features, it makes the initial sales process more difficult than it needs to be and – in the case of recurring/subscription business models – it puts the yearly decision for the company to continue to use the application and sign the contract up for unnecessary scrutiny.

Most of the people who sit in these approval roles are measured by and interested in key operational results of the business. Consequently, I believe there are 3 features every business application should contain:

• The ability for key executives- or their staff – to set thresholds within your application that they consider to be KPIs (key performance indicators) and to have the application automatically notify them via email when those thresholds are met/unmet and the reasons why.
• The ability to deliver graphs/charts that can be easily configured to identify and highlight critical elements of the business that your application helps operationalize.
• Usage reports that can be delivered periodically that  include user login statistics along with key operational results.

You want your application to touch key senior executives on a regular basis. That way, they are reminded about your company regularly (increasing your brand presence and importance) and realize that your application is providing their company with value. Without these fundamental application elements, you are in fact leaving it up to the skills of your daily practitioners to convey the value of the application(s) up the management chain.

While many may be quite good at doing this, others may not be quite as adept. As a result, in the case of software companies that use recurring revenue models, you are putting your annual contract renewal in the hands of lower-level personnel.

If you want supporting evidence of what I’m talking about, pick any start up and go to their website. While you are there, I am confident you will see comprehensive product feature overviews and use cases, etc. for daily practitioners. However, seldom will you find any discussion regarding product features for senior executives and/or material for the daily practitioner to “sell” their upper management on why they need your application.

So, if you build business application software, I would encourage you to look critically at your product and your website and ask yourself if you are really addressing everyone from the lower level practitioner who may need to use your product daily to the senior executive who may never use your products directly.

With a few relatively simple changes, you might help to accelerate your company’s revenue growth and decrease your churn rates.

Crowdsourced Logo and Graphic Design by crowdSPRING

Hitchhiker: You heard of this thing, the 8-Minute Abs?
Ted: Yeah, sure, 8-Minute Abs. Yeah, the excercise video.
Hitchhiker: Yeah, this is going to blow that right out of the water. Listen to this: 7… Minute… Abs.
Ted: Right. Yes. OK, all right. I see where you’re going.
Hitchhiker: Think about it. You walk into a video store, you see 8-Minute Abs sittin’ there, there’s 7-Minute Abs right beside it. Which one are you gonna pick, man?
Ted: I would go for the 7.
Hitchhiker: Bingo, man, bingo. 7-Minute Abs. And we guarantee just as good a workout as the 8-minute folk.
Ted: You guarantee it? That’s – how do you do that?
Hitchhiker: If you’re not happy with the first 7 minutes, we’re gonna send you the extra minute free. You see? That’s it. That’s our motto. That’s where we’re comin’ from. That’s from “A” to “B”.
Ted: That’s right. That’s – that’s good. That’s good. Unless, of course, somebody comes up with 6-Minute Abs. Then you’re in trouble, huh?
[Hitchhiker convulses]
Hitchhiker: No! No, no, not 6! I said 7. Nobody’s comin’ up with 6. Who works out in 6 minutes? You won’t even get your heart goin, not even a mouse on a wheel.
Ted: That – good point.
Hitchhiker: 7′s the key number here. Think about it. 7-Elevens. 7 dwarves. 7, man, that’s the number. 7 chipmunks twirlin’ on a branch, eatin’ lots of sunflowers on my uncle’s ranch. You know that old children’s tale from the sea. It’s like you’re dreamin’ about Gorgonzola cheese when it’s clearly Brie time, baby. Step into my office.
Ted: Why?
Hitchhiker: ‘Cause you’re f&*%n’ fired!

The scene is hysterically funny – at least to me! But it might be one of those things you have to see/hear live to appreciate.

Anyway, lately I feel like I’ve been hearing the equivalent of “7 Minute Abs” business ideas. That is, the business premise is to take a successful idea with an existing brand and an existing installed base- make a relatively small refinement –  and expect to build a complete company around it – unseating the incumbents, etc.

So, what am I talking about? Someone comes in with an idea for a new CRM application but it has a mobile twist. Someone else comes in with an idea for a real estate website – but with a lot more social capabilities. Another comes in with an idea to connect homeowners with handymen (handypeople?) but it’s a mobile app v a web app.

In fairness, these aren’t bad ideas and unlike “6 minute abs” they are almost always an improvement over the original. However, in my opinion, most of the incumbents could easily replicate the new idea - with little chance of IP infringement – if it takes off.

I think it’s important that if you are going to go after an existing market with an installed base, make sure that your business model/product idea has demonstrable and radical differentiation — something where the value proposition is easy to describe and simple to convey.

In other words, make sure you’re not “dreamin’ about Gorgonzola cheese when it’s clearly Brie time”.

Just sayin’……

The report states, “13 public SaaS companies tracked by Pacific Crest Securities have increased in value 40% since the beginning of 2008. During that same period, the S&P index has yet to return to its pre-recession value.”

It goes on to say, “…not all public SaaS companies have performed equally well. To be a standout in this space, growth needs to be greater than 25% per annum, and the market opportunity needs to be significant (e.g. CRM, ERP, HCM, etc).”

They claim that growth dominates over profitability for a couple of reasons. The first is that the SaaS market is still immature with only a third of the entire software market spend. The second is that these companies have been able to demonstrate significant profitability after sales and marketing spend is cut back.

I’m not sure I necessarily buy into this last statement because I’ve yet to see any high growth SaaS companies that have cut back on their sales and marketing spend in favor of profitability. In fact, I remember a few years ago speaking with Phill Robinson, the then-current CMO of Salesforce. His comment to me was that he had not reached a point of diminishing return from his investments in Google Adwords – and Salesforce has continued to invest heavily in sales and marketing – mostly “brand” marketing v demand marketing surprisingly.

Here is the chart that SaaS Capital showed with the relative performance of each of the 13 public SaaS companies.

So, it’s true for public SaaS companies but does high growth spell high valuations for private SaaS companies?

The answer is a resounding “yes”. In fact, even more so. For fast growing private SaaS companies, valuations have recently been over the top. In the public markets, the high multiple ranges but is about 10x-12x annual revenues.

In the private markets, a high growth SaaS company with “only” a 12x multiple could be a great deal for an investor. One of the companies I looked at last year had less than $5M in revenue but the pre-money valuation of the round when it was completed was in the mid $100M range – all because its YoY growth rate and its pipeline had grown so fast and it was in a very large and addressable market.

In contrast, a low growth SaaS company is in a precarious position. The authors of the SaaS Capital report cite a private SaaS company they have been working with that generated $11M in revenues and is profitable but only growing somewhere north of 10% per annum. The company was unable to find any interested strategic investors and is hoping to get a financial buyer to pay 1.5x revenue this year. If they do, I think they should consider themselves fortunate.

So, if you want a successful outcome for your SaaS business, by defnition it needs to generate high growth. To do that, you need the capital to invest in sales and marketing. And, as I have written about in previous blogs, in a high volume SaaS model, lead generation not sales capacity, fuels growth. This is one reason why I believe we haven’t seen any leading SaaS companies emerge that haven’t been venture backed at some point to fuel growth.

So, by definition, if you’re a SaaS company it’s incumbent upon you to find marketing personnel who are experts at lead generation. I know this is one of the critical hires in each one of my SaaS portfolio companies and it is becoming increasingly more difficult to attract this highly sought after talent.

Given the importance of lead generation for the SaaS model and company valuations, I suspect over the next few years, that marketers with proven lead generation skills in the SaaS market may see base + variable compensation on the same level as sales personnel.

According to the article, from $33M in 2009, GroupOn’s revenue virtually exploded in 2010 to $750M. From an employee base of 120 in 30 cities in 2009, the company now has 4,000 employees across 565 cities. Holy cow!

As I read the article, it reminded me of the significant challenges companies must deal with when faced   with explosive growth.  We were faced with a similar challenge at Siebel Systems in 1998 as we  had doubled from 1997 and we were preparing to double revenue the following year (from $418M to $800M). As it turned out, we doubled in 1998 ($813M) and we doubled again in 1999 to $1.7B.

While this is a high quality problem to have, the fact is this type of growth places enormous stress on executives, managers and employees. And, it is a problem that few executives/managers have personally had any experience with.

One of the issues we faced at Siebel was not only with external hiring, but also ensuring that our executives/managers could scale with the business. For example, people who may have been great first line managers were becoming second and/or third line managers in the course of a single year. Not everyone had that experience nor was everyone capable of making that type of transition.

To his credit, Tom Siebel realized that in order to “keep the wheels from coming off” (his words), we needed to put in place a hiring program that would ensure that employee 5,000 was as capable as employee 100. Additionally, we needed to ensure that managers who whose organizations were exploding internally, weren’t collapsing under the weight of new/different responsibilities.

We knew it was an impossible challenge to make perfect external hires and transition every manager from one level to the next. Therefore, we needed to put in place a process that ensured when we made a mistake and hired the wrong person or we identified that a manager was failing that we had a mechanism to quickly identify and rectify the situation.

We needed  a plan to hire several thousand people in a single year. This meant that people who we had hired within the past year would likely be responsible for hiring additional people within the year. These would be people who themselves had limited experience with our “Core Values” and/or our operating principles.

The opportunity to do this wrong and hire a lot of people who would be detrimental to our business was extremely high. This would cost us a lot up front and even more downstream with our customers, partners and shareholders.

To address the the critical challenge of talent acquisition, we put in place a recruiting and training function across the company. Working with HR, each senior executive was assigned a dedicated recruiter who helped to draft the job roles/specifications that aligned with employees who were currently viewed as successsful in their role within their groups.

We held “Super Saturdays”, where we would bring in dozens of candidates and have them interview with current employees and managers in an intense day long process. By the end of the day, we accumulated all the comments on each candidate from each interviewer and assessed whether or not we wanted to make an offer. For those candidates who made it through the process, HR generated an offer letter and the hiring manager met with the candidate at the end of the day and personally made the offer. It was  a long and exhausting day but we were able to make many great hires within a single day without impacting the business during normal business hours.

Then, in each group certain managers who had tenure with the companyand the organization, were tasked with creating a training curriculum that helped to train new employees. For example, in the Alliance organization, we took the dozens of recent MBAs we had recruited earlier in the year and put them through an indepth program where they were trained on how Siebel created and managed its alliances.

We operated a “boot camp” where newly-minted alliance managers learned the general policies of  Siebel Systems (e.g. Core Values) along with organization-specific issues such as the structure of the Siebel Alliance Program, how to write an alliance business plan, and how to work with other functions within Siebel Systems. At the end of the month long training each manager was tested and certified.

Similar training was performed in Product Management, Sales, Engineering, etc.

Consequently, new employees were able to quickly assimilate into the company and understand our Core Values, our policies, learn who were the key people in different functions across the company, how to work across the organization and how to work within their own organization.

In addition, we knew that not every employee – new or otherwise – was going to work out and as important as it was to bring on great people, it was equally important to be able to identify and remove people who were unable to contribute as we needed. To address this very real issue, we created an objective process.

Every employee at Siebel had a set of quantifiable and written objectives which were captured in an internal system we developed. Today, there are products like Rypple that will help companies capture and track their objectives/commitments. As a result of this process, every six months we stacked ranked every employee across the organization and we eliminated the bottom 5-10% performers.

I don’t claim this was a perfect process by any stretch – I don’t believe everyone liked/agreed with this approach or that mistakes weren’t made from time to time where we terminated or kept the wrong employee – but overall this program helped to quickly identify and resolve employee situations that weren’t working out.

Between these two programs, we were able to “keep the wheels on” even in our hyper growth days.

I think these ideas can even apply to companies that only need to make a few hires. Many times interviews take a back seat to the business and are stretched out far longer than necessary. From what I have seen, most start up companies are poorly prepared to execute quickly in this area. Interviews can be disjointed with candidates left wondering who they need to interview with next or where they stand. Offer letters take days/weeks.  

For high tech companies, people are our most precious asset. So, just as it is critical to have a world class development process, having an outstanding hiring process is critical to success.

For those key hires that could make/break a company and who are likely to be highly desirable by your competitors, putting in place a world class hiring process so they join your team vs. someone else’s could be the difference between your company becoming the market leader or an also ran.

So…ask yourself “how good is our hiring process?” Even if you aren’t in hyper growth, are the wheels coming off?

When I originally started this blog, I did it as an experiment; I didn’t give a lot of thought about the long-term breadth of topics I wanted to cover beyond “Software as a Service” nor the blog’s overall positioning. I thought that if it garnered a few followers I would circle back and consider its “look and feel” and branding.

Well, after 2 years since starting there are now nearly 2,000 people who read this blog each month, so I consider it to be a successful experiment – especially given the fact I’m not some Hollywood celebrity such as Ashton Kucher who apparently has a ton of interesting and intelligent things to say/tweet. Consequently, I felt it was time to finally “circle back” and put some serious thought into branding/positioning/etc.

The first thing about my blog I wanted to change was the title, “SaaS and All Things Software”. I wanted to do this for several reasons. Over the past few years, SaaS has evolved into something a lot bigger – “Cloud Computing”. Cloud Computing includes DaaS, PaaS and IaaS as well as SaaS and I am involved in companies and technologies in all these areas and others. Second, I have many other comments I’d like to make that go beyond “SaaS and All Things Software” and I’d like the blog’s title/message to be broad enough to encompass those observations.

I chose the title, “Rolling Thunder” for two reasons. The first is that it ties into “Cloud Computing”; Thunder. Clouds. Duh. The second reason is that Rolling Thunder is a PR term meaning “continuous communications”. I thought that it fit nicely with the intent of the blog. So, that’s the rationale behind the name.

Based upon the recommendation from one of my partners at InterWest,  I decided to try and use crowdsourcing to come up with a new design. So, I signed up with Crowdspring. Crowdspring is one among a number of websites that features 10′s of thousands of designers (called “creatives”) who look for interesting projects (e.g. websites, blogs, stationery, logos, wedding themes, etc.) that are posted by ”non-creatives” (my term) like me.

After signing up, I created a project, described what I was looking for in a new blog design, and pointed the “creatives” to my existing blog for ideas. In the initial set up, I had to come up with an award amount for my design – it has to be at least $200. In this case, I chose $500 to make sure my project received enough attention.

In total, I recieved about 40 different designs to consider. I ended up selecting one design style from all the other entries. However, that was simply a design. I still had to have it converted into an actual WordPress Theme. This wasn’t within the designers skill sets so I took the design to the web programming firm we use (HyperArts) and had go through a few more design iterations as well as having them convert the design into an active WordPress theme.

Although the Crowdspring approach didn’t give me a “blog ready” result, had I gone the traditional route, I would have spent several thousand dollars in design fees and would have been restricted to just a single firm’s imagination and skills. With crowdsourcing, I had access to many designers and felt I received a lot of creative ideas that influenced the final design outcome.

I relied upon Crowdspring to handle all the financial details, etc. It made it relatively simple and straightforward. None of this would have been possible a few short years ago. Pretty amazing stuff. My only negative comment is that most of the designs submittted are simply repurposed stock art so you aren’t really getting anything “custom” — at least not for the $500 award I offered. But, you do get some creative uses/adaptations of stock art and for my purposes this worked fine.

With that, welcome to my “new and improved” blog. I look forward to interacting with all of you in 2011 and beyond on topics that include SaaS but will branch out to general observations on a variety of things I find interesting…and, hopefully, so will you.

Most enterprise software applications have horrible UE/UI. When it comes to form v function, function has been the hands down winner through the decades. Traditionally, most companies haven’t been interested in whether or not users  ”like” using a business application. More important is whether the application is better able to support the company’s required business processes.

However, as the next generation enters the workforce, these new employees have been exposed to software since the time they were children – starting with video games with great graphics and more recently consumer applications such as MySpace, Facebook, Twitter, and iPad/iPhone and Droid applications.  The consumer software companies know that their applications must be compelling, enticing and easy to learn/use if they are going to gain acceptance in the consumer markets.

Unlike previous generations of employees who had relatively little interaction with applications/software prior to joining the workforce, this new generation of employees enters with certain expectations of how an application should look and function…and the vast majority – nearly 100% I would guestimate – of enterprise applications don’t even come close to measuring up.

Even Salesforce.com’s UI - arguably one of the better enterprise application software companies – isn’t great. It still uses conventional master-detail lists that make the UI feel as though the data structures are poking out from the underlying database. Chatter, their new enterprise collaboration application, is a nice step forward for enterprise application software. But it still isn’t close to Sim City.

Contrary to traditional beliefs, great enterprise application UI isn’t a “nicety”; it’s a necessity. Studies have shown that a good UI can decrease the amount of time it takes new employees to come up to speed, thereby saving companies money in up front training expense. And, over time, if an application is easier/faster to use, employees can accomplish their tasks more quickly and accurately thereby generating more productivity. Finally, a good UE/UI can provide significant differentiation during the sales cycle as prospects consider issues such as broad internal use adoption – one of the primary reasons many enterprise application projects fail.

I have the opportunity to see a lot of application software companies and I’m still surprised by how poor most of the UE/UI continues to be. As a result, when I see an application with great UI, it really stands out. Last week, I was pleasantly surprised by a company that presented to me. It is a very early stage company with no venture capital as of yet and limited internal UE/UI expertise.

Realizing UE/UI is critical, they did the smart thing, they bit the bullet and invested in an outside UE design firm from the get go; the results were clearly worth it.  Since the firm did such a good job, I’m going to give them a plug. The name of the firm is UE Vision and the CEO is Sarah Kling. Sarah has produced an hour long presentation titled, “The “Killer” Screen: How One Well-Designed Screen Can Sell Your Product” which I think does a very nice job articulating the role of UE/UI in making a company and its products a market success.

I think every application software company’s CEO and products teams would be well-served to invest an hour to listen to Sarah’s presentation. Whether you ultimately choose to use her firm or another, she provides good advice.

If I were back on the operating side again, I would take all that money I no longer have to spend on hardware (since I’d be buying cloud-based, elastic computing services) and software (open source) and I would invest it in UE/UI. I think it would be money well spent.

On Tuesday of this week, my wife discovered that her Facebook account had been deactivated. Facebook didn’t send her an email or any sort of notification that they were deactivating her account — they just turned it off.

Now, my wife uses Facebook like the vast majority of its 500M members – to keep up with the lives/daily activities of her current and old friends as well as family members. She is not a hacker; she’s just a mom and my wife for more than 30 years.

After seeing that her account had been deactivated, she sent a request into Facebook Support certain it was some minor glitch and all would be restored and the universe would continue on as normal.

However, the next morning she looked in her inbox and to her surprise, she had received the following email:

From: info+tay1yt@support.facebook.com [mailto:info+tay1yt@support.facebook.com]

Sent: Wednesday, November 17, 2010 1:43 AM

To: XXXXXX 

Subject: Re: My Personal Profile was Disabled

 Hi,

Fake accounts are a violation of our Statement of Rights and Responsibilities. Facebook requires users to provide their real first and last names. Impersonating anyone or anything is prohibited, as is maintaining multiple profiles on the site. Unfortunately, we will not be able to reactivate this account for any reason. This decision is final.

Thanks for your understanding,

The Facebook Team

My wife uses her real first and last name on Facebook. Her email account is real, it is active, and she responds to messages sent to her. She is not impersonating anyone. She doesn’t have multiple accounts. She doesn’t have a name that is associated with any celebrity. She’s just a normal person, doing normal things on Facebook. She has friends, she makes comments and she posts photos (all normal photos — dogs, kids, you know… your basic family type stuff.)

Suddenly, she is cut off from her friends/family/photos, she’s been accused of something she hasn’t done, and, apparently she has no recourse. The only communication she is sent is a sterile boilerplate email from Facebook saying that they will not “be able to reactivate this account for any reason. This decision is final.”

Holy #$%^. Is this any way for any one/person/company to treat a mom/wife/good person?

Then, just as sudden as it was deactivated, her account was mysteriously reactivated. No explanation why. No reason. No apology. Nothing.

This all got me thinking.

Facebook just launched its supposed “gmail killer” -  Facebook email accounts. What if someone were to start using a Facebook email account and suddenly it was turned off for any reason or no reason? Without recourse. Poof…gone. And, no human to interact with to rectify the problem.

Email is a “mission critical” application for me and for most people who use it. Not having access to your email account to be able to send/receive email and review old email as needed could be extremely disruptive; at the very least it would be highly annoying.

If Facebook makes a mistake with email, as they did with my wife and her regular Facebook account, and uses the same non-communicative “it’s final” approach to resolving the issue, how would I, or anyone else, feel about that? 

I realize that people are using Facebook for more and more online activities (e.g. video, chat, etc.). However, has Facebook really earned the right – our trust – to provide these services?

Yes, I know that Facebook is  “free” — sort of…if you don’t pay attention to the ads/games/etc. that all enable Facebook to make money instead of you/me paying a subscription fee.  The question I have is: how free is it, really?

I’ve decided that based upon this little incident with my wife that I’m not giving Facebook any more access to my life until it proves it can handle what it currently has – appropriately and effectively. It may be convenient to put our entire digital/online lives into Facebook but I would strongly suggest we avoid that temptation.

That’s too much power and as history has shown “absolute power corrupts absolutely.”

BREAKING NEWS: Facebook just sent my wife a sterile boilerplate email apology for deactivating her account. Still no explanation. My comments stand.

Given it’s been possible for consumers to erase virtually all unwanted cookies, advertisers have argued to regulators that the public can easily decide to opt out of being tracked by simply taking the overt action to erase cookies between sessions. Now, however, a new type of cookie has emerged called the “Evercookie”. According to Jim Rapoza in his article titled, “The Cookies You Can’t Remove“, the Evercookie works by “…placing cookie data in several places within the browser, including the standard cookie cache, browser history, even within a specialized image file. Evercookie also utilizes new data storage features in HTML 5.” The evercookie ignores all browser requests by the end user to delete thereby eliminating consumer opt out options. You opt in simply by choosing to use the web. This has the public and regulators extremely concerned over privacy issues.

In my opinion, here is the quandary that companies and consumers are faced with: as web users we have grown to expect web content (and our consumer-based applications) to essentially be ”free”.  However, companies that produce content and consumer applications have to make  a profit.  To date, this quandary has been resolved primarily through the advertising business model. Over time, though, we have learned how to increasingly ignore web-based advertising. Consequently, web-based advertisers are demanding increasingly better results from their ad network spend. 

In response, ad networks have had to become better and better at providing demonstrable results. They are doing this by capturing more and better data about the individual and serving up ads that are targeted towards that individual based upon their behavior as captured over time.

As a result, the lowly browser cookie  – which according to Wikipedia was “originally created by Lou Montulli at Netscape…as a solution to the problem of reliably implementing a virtual shopping cart” – has become the main protaganist in the nefarious plot. And, the evercookie promises to be its mega-steroid amp’d up ”super villain” cousin.

Where this all ends, it’s unclear. One thing is for certain though, advertisers are getting better and better at targeted advertising (not just via the web — look at what companies such as Invidi are doing with TV). And, as long as consumers continue to expect something for “nothing”, they can expect the hidden costs of “nothing” (e.g. privacy erosion) to increase.