Why Facebook “Groups” Matters

The digerati’s reaction to last week’s Facebook announcement was entirely too focused on privacy. That’s partly Facebook’s fault, as the company presented the three new offerings under the headline of returning control to the user. But one of those offerings, Facebook Groups, is less about keeping secrets than it is about making the Facebook experience more relevant, and thus valuable.

Groups is the big deal in this three-pronged announcement, even if its initial implementation is very basic. Facebook CEO Mark Zuckerberg called Groups a “fundamental building block of the social web” because it’s so much more like reality. The resulting blocks could have a big impact on communications and identity management, and on viral application and content distribution as well.

Can Facebook Jump-Start Groups Adoption?

Before Groups makes a big impact, people will first have to use it. I agree with Zuckerberg: Most people don’t want to interact in the exact same way with all 135 (or 250 or 1,000) of their “friends.” In the real world, individuals belong to multiple groups based on things like shared interests, geography and family; if Facebook users put their online friends in groups, more relevant communications and experiences are likely to result. This would increase Facebook’s value, and with that, its usage. That’s the theory anyway.

Prior to Groups, Facebook users organized their friends by creating lists. But only 5 percent of Facebook users make lists; most make only one, according to the social network. In contrast, the company says, while the majority of users don’t upload photos regularly, 95 percent have a photo of themselves that’s been tagged. The “power taggers” do most of the work. And while many of the tagged remain passive, the point is that they’re included in the dialogue. Facebook believes Groups will repeat this pattern, eventually leading to 80 percent coverage of users. That’s also why Groups invitations are opt-out — to the consternation of some — at least in the service’s initial implementation.

What Groups Is Really About

If Groups’ adoption becomes widespread, those aforementioned “building blocks” could generate powerful results inside and outside of Facebook. Groups are woven into the Graph API; apps can make use of Groups. And Facebook intends membership and interaction to be syndicate-able outside of Facebook, similar to its Like button or log-in.

So where could Groups make real waves?

• Feed filtering and curation. Users will filter their Facebook news feed — that includes aggregated updates from Twitter, Foursquare, and others — by Groups. This could prove more efficient than using search or topical taxonomies. It could also give Facebook more advertising inventory that’s targetable by highly relevant information.
• Identity management. Users will be able to engage in social media interactions in the appropriate contextual modes. Imagine Groups for shopping, entertainment recommendations, professional communications, etc. Groups could essentially offer federated authorization (among members) to different apps and services.
• Unified communications and presence management. Groups could enable better presence management — you’re available only to after-work friends, for example — than we’ve seen in email or IM applications.
• App interaction and distribution. Facebook recently changed its social gaming policies to better direct relevant updates to gamers instead of non-gamers. Similarly, Groups could filter and enhance social commerce and other applications.

Who Should Pay Attention?

Marketers can’t make Groups, just Pages. But don’t think Facebook won’t develop appealing promotions and targeting techniques for its own advertising platform. I doubt advertisers will ever be able to target individual Groups. The contextual information within the content of Groups, however, should produce topics and keywords that would be a very accurate representation of interest — catnip for advertisers.

Companies that provide content aggregation (Yahoo, Digg, Yelp) and/or real-time information streams (Twitter), or add value on top of those streams (Google, TweetDeck, Seesmic) may need to counter or support Groups. Otherwise they risk being just one less-useful and less-monetizeable feed in a Facebook viewer.

Facebook does not offer robust enough security or content/communication management features to threaten enterprise collaboration players like Microsoft, Salesforce.com, or Box.net. Lighter-weight services like Yammer should keep alert, though.

Related Research: Four Ways Facebook can Conquer Mobile

Question of the week

Where will Groups have the biggest impact?