All Things Digital

So much for Facebook’s vaunted “open platform.” Tomorrow, an alliance of companies led by Google will introduce a common set of standards that will do for any Web site that embraces them what the Facebook Platform did for, well, Facebook.

OpenSocial, as Google has named it, is a set of common APIs (application programming interfaces) that will enable developers to write applications for a broad range of Web sites and services without any individual customization. Think of it as Facebook CEO Mark Zuckerberg’s “social graph” but writ large.

And while some might smirk at OpenSocial’s initial roster of participants–LinkedIn, hi5, Ning, Friendster, Plaxo and Google’s own “big in Brazil” social network Orkut–it does include a few big names: business software makers Salesforce.com and Oracle. Oh, and Google. Which, as TechCrunch’s Erick Schonfeld points out, already has much of the critical mass it needs to push this effort forward: “Google already has so much data on you, depending on how many Google apps you already use. It just needs to bring everything together. … Over time, Google will connect all of these together in different ways, along with data about you from other social services across the Web, and give developers access to the social layer tying all of these apps together underneath. The real killer app for Google is not to turn Orkut into a Facebook clone. It is to turn every Google app into a social application without you even noticing that you’ve joined yet another social network.”

We really need to move the thinking about the social graph. This exists out in the world, and has always existed. We didn’t invent it. How can we ‘own’ it? We’re just trying to map it out. We have a model of the social graph that we’re constructing.”
–Facebook CEO Mark Zuckerberg

We have address books, and the sum of the address books is the social graph.”
–Google CEO Eric Schmidt

Turns out that the “social graph” about which Facebook CEO Mark Zuckerberg so often speaks these days isn’t just a decades-old computer science term, it’s the basis for the monetization platform that will someday justify Facebook’s $15 billion valuation. Or so the theory goes.

On Nov. 6, Facebook will make a major announcement at the ad:tech conference in New York. And ad-industry executives familiar with the company’s plans say it will revolve around an advertising network reportedly called SocialAds. As described in Facebook’s Sept. 24 trademark filing of the term, SocialAds are “advertising and information distribution services, namely, providing advertising space via the global computer network; promoting the goods and services of others over the Internet.”

But–again according to those faceless ad-industry executives–the SocialAds network may be quite a bit more than that. It might use permission-based demographic targeting to deliver ads to users on Facebook–and off, says Altura Ventures’ Lee Lorenzen, who offers this hypothetical breakdown of the service:

• Facebook (with Microsoft’s help) will offer a competitive solution to Google AdSense for non-Facebook Web sites.
• You can think of this service as an open-source AdSense solution where Google can provide ads into it (if they document what the Web site owner will earn) but Google (and any other ad providers) will have to compete with ads that Microsoft can provide that are Facebook-enhanced.
• The innovation here is that Microsoft’s ads will be able to pick up the user’s Facebook cookie (for the 50-million-growing-to- 200-million users who already have a cookied-Facebook account).
• This means advertisers in Microsoft’s adCenter can offer a much higher CPC or CPM payment to the Web publisher because they will know that the user viewing the Web page is actually a Facebook user that, for example, happens to be an 18-year-old male with a birthday in three weeks who mentioned Xbox on his profile page.

If Lorenzen’s right, SocialAds might easily justify Microsoft’s $240 million investment in Facebook.