Charlene Li

How To Create A Successful Social Business

Charlene Li — Mon, 11 Mar 2013 22:02:48 +0000

Are you a social business? By this, I mean are you aligning your social strategy to business goals? In a new Altimeter Group Report, “The Evolution of Social Business“, my co-author Brian Solis and I found that this was not the case. Only 34% of businesses we surveyed felt that their social strategy was connected to business outcomes. Brian goes into detail about our findings in this post.

Our research found that organizations typically go through six stages of social business evolution. But this doesn’t mean that you have to wait until Stage 6 to realize business impact. Rather, it’s not only possible but crucial to focus on achieving business results right from the very beginning. The six stages are as follows (for a deeper dive into each, please download the report):

A great example of this from the report comes from Shell. They launched the Shell Facebook presence only in January 2012 and they mostly post content on the page and moderate comments. But they see tremendous benefit from this activity because their business goal is to understand and improve their reputation with customers and partners. They ask the question, “To what extent is Shell meeting customers’ energy needs in socially and environmentally responsible ways?” The key here is that this is not an effort isolated to Facebook — they measure reputation across ALL media channels so that they can see their activities impact reputation differently. Moreover, they measure this DAILY. Shell may be early in their social business journey, but they make sure that they see business impact from their efforts.

Creating Your Social Business Strategy

The focus on business goals is the key to having a coherent social business strategy, which we define as “the set of visions, goals, plans, and resources that align social media initiatives with business objectives”. That alignment and focus on business objectives forms the foundation for the strategy, no matter where the organization is on their evolution. Just 28% of respondents in our survey felt that they had a holistic approach to social media, where lines of business and business functions work together under a common vision. A mere 12% were confident they had a plan that looked beyond the next year. And, perhaps most astonishing, only half of all companies surveyed said that top executives were “informed, engaged and aligned with their companies’ social strategy.”

But there is hope. we found a set of best practices common across all development stages. We call these the Success Factors of a Social Business:

Define the overall business goal and align social media strategies against it.
Establish the long-term vision for becoming a social business.
Seek and earn key executive support and sponsorship based on the business case, not the trend.
Beyond marketing and service campaigns, develop a list of prioritized initiatives that will demonstrate business value at the enterprise-level and in key functions/lines of business and plot them on a two-to-three year roadmap.
Train and educate executives and employees not just how to use social media, but also how social media can impact business objectives and how to develop and run programs that do so continually.
Get the right people involved at the right levels. An effective social business strategy takes a unified approach with cross-functional support. It’s a combination of social media savvy and business acumen.
Invest in technology only after your vision and strategy are set. Technology and social media in general are only enablers to the overall mission and purpose you set forth.

Applying The Social Business Success Factors

From the research and from our work with clients, we have found that these success factors become especially important when the organization moves from one stage to the next. Some of the most common issues we’ve seen organizations face include:

Getting executives to buy into the social strategy — and fund it. Factors #1 and #2 which use business goals and a common vision to align the organization, become crucial. Sometimes this can be accomplished with a short education session, but more often, it requires that social strategy be built into the very fabric of the executive’s work and priorities. This is done only by strongly linking social activities to the 3-5 strategic goals that executives care about. If social doesn’t help the executive accomplish their mission critical goals, then it won’t ever make it on to their radar.
Creating a coherent strategy for social business. As crazy as it may sound, we’ve been working with clients to create three year roadmaps for their social business strategy. That’s not a typo, although it may seem impossible to do this in a fast-changing technology landscape. The key is to focus on the long-term strategic business goals of the organization and to make technology decisions ONLY after the vision and strategy are set.
Establishing governance. This is the perennial question, “Who owns social media?” This isn’t a simple issue determined by company size, maturity, or industry. It’s base much more on how the organization sees social playing a role in the company in the future, and creating a roadmap to bridge the reality of today to the future. One organization we worked with envisioned a multiple hub-and-spoke model with product and country teams. But to get there, they realized they needed to be temporarily centralized first, move into a basic hub-and-spoke with defined responsibilities, and a migration path for governance to pass into the spokes in a few years after training ensures that the skills and capabilities are in place.
Engaging and transforming the organization. This is perhaps the most challenging problem facing senior executives — they see the need to redesign and retool the organization for greater flexibility, adaptation to a changing landscape, and resilience in the face of increased competition. CEOs see social technologies as a way to harness and bring together employees, customers, and partners, but don’t have a roadmap to be able to do this.

By keeping in mind where you are in your social business evolution AND using the success factors, you’ll be able to start tackling some of these tricky issues. We’ve seen firsthand that this is not an easy journey, but it is one that you can successfully navigate. I’d love to hear how your journey is going — what stages are you in and have you encountered similar challenges? If so, how has our organization managed to move forward? Add your comments below or send me an email with details — we’re always looking for more case studies!

If you’d like to learn more about how Altimeter can help your organization move quickly and efficiently through the social business journey, please get in touch with us at sales@altimetergroup.com.

Why Most Social Strategies Fail

Charlene Li — Thu, 08 Nov 2012 03:28:18 +0000

When I ask people what their social business strategy looks like, I usually get the following response, ”Oh yeah, we’re on Facebook.” The conversation continues apace:

- Twitter account…check.
- YouTube videos….yup.
- People who seem to know what they doing with those accounts…kinda.
- Metrics….Likes.

But that isn’t a strategy – it’s a series of tactics. Having a Facebook page is like having a telephone — it’s a tool that needs a purpose. What you DO with Facebook to meet customer expectations and attain business goals lies at the center of a coherent social business strategy.

My colleague Brian Solis and I are in the midst of conducting research on what makes a good social business strategy and a key finding is that as companies evolve their social initiatives, the efforts get disconnected from business goals. So while the company grows in its social media efforts, strategic focus, with a clear goal in mind, falls to the wayside.

This isn’t about waiting until companies have reached a stage of “maturity” before they are deemed to be successful. Rather, we found companies thriving at every stage of social strategy evolution. The key is coherence, where the business goals, executive support, social business capabilities, and the value created by both internal and external social initiatives all work together in harmony.

Here’s an example: one company we spoke with focuses most of their social efforts on developing their Facebook presence. The company rarely replies or engages with people who post on their page. On the surface, you might dismiss this company as not “getting” social media because they don’t actively engage in a two-way dialog.

But in so many ways, their strategy is far more coherent than companies that blindly engage for the sake of engagement. That’s because they are very clear about the purpose of their Facebook presence, which is to showcase the personality of the company. While they enjoy having millions of fans, the key business metric they track is reputation, which is used across all aspects of the business. On a daily basis, they ask their Facebook fans, as well as people in other channels, how they are doing on delivering their products, and if they are doing so in an environmentally sustainable way. They can then compare which channels are effective at driving their goal of improving reputation.

So how can you tell if your social business strategy is successful or failing? One way is to look across the elements of your social strategy and see if they align with each other in such a way that supports clear business goals. Are your capabilities in line with what you are trying to achieve, or have you bitten off too much and are not realizing the full potential of your efforts? Do you have the organizational governance in place to allow disparate business units to align their social efforts against a common enterprise goals, or is each line of business pulling in separate directions?

Another way to gauge where you are with your social business strategy is to take Altimeter’s Social Business Strategy Survey at http://svy.mk/QkcYRH. The aggregated results will appear in an upcoming report, and as a thank you for sharing, you’ll receive a data cut that you can use to benchmark your company against other organizations of the same size. You will receive this benchmark data after the research report is published.

The survey looks at the following topics:

Strategy: What are common goals and objectives? How do you measure the value of your social business efforts?
Organization: How are your social business efforts organized? How many people are dedicated to social business?
Budget: How much are you spending on external and internal social business efforts? What are you planning to spend on technologies and services in 2013?
Social Media Policies: What policies do you have in place? How well do employees understand those policies?

Please note that we plan to end the survey in the next week or so, so please take it as soon as possible! Also, please forward to others who may be interested or share with your social networks. Link: svy.mk/QkcYRH.

Lastly, please share why you think your social business strategy is successful — or on the flip side, what is dysfunctional about it. We’d all love to learn from your experiences!

Obama vs Romney in Social Media: Who’s Using It Best?

Charlene Li — Thu, 11 Oct 2012 22:58:27 +0000

[crosslinked from LinkedIn]

As someone steeped in social media, I’ve been watching each of the presidential campaigns closely to see how they are using social media well – or not. [Disclosure: I worked on Obama’s campaign in 2008 and have donated to it this election season. I also went to the same high school and business school as Romney. To the extent possible, I’ve tried to be objective in my analysis, but inevitable, my biases will come through.] Here are some observations, as well as opportunities for the future:

It’s Not About the Numbers. I’ve seen many commenters point to the overwhelmingly higher numbers of Likes and Followers that Obama has over Romney on Facebook and Twitter, respectively. It’s easy to get lured by those numbers, but they are highly misleading because Obama has had four years as candidate and President to gather his followers. What will matter in this election is how engaged these followers are, in not only amplifying their candidates’ message, but whether they can get people they know to vote.
Each Campaign Plays to their Strengths. My colleague, Susan Etlinger, who researches social media analytics, cautioned that looking at the stats alone don’t tell the full story. As an example, she pointed me to recent data from Pew that shows Democrats and liberals as being more engaged politically than Republicans. Her advice: Look at each of the respective campaigns from the perspective of where they are starting from. With Republicans less likely to energize their base via social networking sites, they are more likely to focus on awareness and outreach to Independents, whereas Democrats will be keen to get an disengaged base fired up to get out the vote of intended Democratic voters.
Romney Makes Smart Use of Facebook Marketing. Romney has made good Facebook ad buys, especially with Sponsored Results where Romney ads started showing up next to search terms such as “democrat” and even “obama”. The results have been significant – Romney has been gaining Facebook Likes at twice the rate of Obama.
But Romney Misses the Opportunity to Be Personal. While his campaign has mastered social media marketing, Romney hasn’t capitalized on social media’s ability to be personal and be direct. The tweets are annoyingly in the first person when it’s clear that Romney is not writing them. My hope is that the new-found, more personal Romney that is currently on the campaign trail – telling his personal story directly rather than through surrogates – will also make an appearance via social media. While Romney himself may not feel that comfortable engaging in the back and forth of social media, even a video of him speaking directly to people in social media, would be a bonus.
Obama Appears On Uber-Cool Reddit – But Dodges Tough Questions. Obama appeared on social news site Reddit, where he engaged in thirty minutes of “Ask Me Anything” (AMA). While Obama gained serious social media cred with his appearance, answering 10 questions and saying that the Reddit experiences was “not bad”, he also avoided by several tough and popular questions such as the legalization/regulation of marijuana dispensaries, aliens (!) and lobbying. While the Reddit session may be called “Ask Me Anything”, it could be more correctly characterized as “Ask, but I may not Tell”.
Obama’s Social Media Team: Masters of The Moment. The Obama campaign tweets between 10-20 times a day. That’s usually 3-4 times more frequently than the Romney campaign. The result: Obama’s team has a lot more practice and better sense of what resonates and gets spread. This culminated in the picture-perfect moment during the Republican National Convention when Obama’s Twitter account sent out a picture of the President sitting in his chair, a response to Clint Eastwood’s discussion with a the invisible Obama. What the Obama campaign did was leverage what Hamish McKenzie so eloquently described as the emotion of the moment and created the most tweeted post for the entire Republic convention.

The key for Romney in these closing days of the campaign is to tap into his loyal base on sites like Facebook and Twitter to share with their undecided friends the Mitt that they know and believe in. But socialgraphics – the social behavior of key audience groups – are stacked against him. According to Pew, only 25% of Republicans are likely to recruit people to get involved with political issues that matter to them, as opposed to 35% for Democrats. But even worse, social networking site (SNS) users (84% of SNS-using Republicans and 79% of SNS-using Democrats) say little or nothing of their recent posts have anything to do with politics.

My takeaway from this analysis is that while the campaigns are using social media in creative ways, they both still miss more opportunities than they capture. The biggest is that neither has created a culture of sharing with their followers. Activity is still focused on messaging, and a predictable call-and-response routine of asking for donations and the cash register singing.

In the end, votes win elections. With a dismal 58% of the US eligible voters actually voting in the 2008 election, the campaigns could be doing so much more to engage people in a dialog, encouraging us to share our views not on politics but the issues we care about. But in the polite company of our friends, we do just the opposite and hide our political leanings from each other. My hope is that in the waning days of this election cycle that more of us will be inspired to engage in civil discourse directly with each other, in the social channels that we inhabit.

Google+ The New Enterprise Social Network?

Charlene Li — Wed, 29 Aug 2012 16:55:04 +0000

by Charlene Li and Chris Silva

Google announced Google+ for Enterprises today with Hangouts integration into Docs and Calendar as well as administrative controls such as default posting to only within the company. We’ve been doing some research on the topic of enterprise social networks and, with Google moving into this market, have some thoughts around why this is a bigger deal than just another Google feature announcement.

: Google In The Office, Image Courtesy Of A Prescient Post On Using G+ At Work By Digital Telepathy

Google has a few things going for it that the pure plays like Yammer and Socialcast in this market don’t have and that tools like Microsoft’s Sharepoint have not yet built out:

Google Plus wins on affinity. Google has been steadily building it’s devoted network of over 5,000,000 enterprises that initially looked to the search provider for email support based on cost, and stayed due to apps and integration. Many have seen additional cost savings given the ability to move away from costly office suites as Google offers a parity of experience for simple document editing and sharing, with additional features such as support for mobile environments and better collaboration tools. Adding Google+ with tight integration just sweetens the pot. If social networks are a communication and community buy and not a technology buy, the affinity power of the Google stack of apps and services is a formidable foe for pure plays like VMWare’s Socialcast tool but less so for tools that integrate with larger systems such as Salesforce’s Chatter. It’s worth noting that, as of the announcement, Google was mum on what integrations with other, third-party enterprise apps would take place to allow Google+ to feed other stores of information. their ultimate decision on this advanced level of integration could determine long term success against tools like Chatter and, to a lesser degree Microsoft’s Sharepoint.

Google lowers the enterprise social barrier to entry. Many businesses will be tempted to try social networking inside of the org for the first time since the product comes at no additional cost. Some may migrate from their existing third party tools like Yammer or Socialcast to Google+ given that it works with a wider swath of tools that competitive offerings when considering integration with Google Apps. There’s a downside to this Googlification of the enterprise, however. Many users will have an existing personal Google identity they’ll need to reconcile Google+ to, though support for switching is possible across multiple accounts on most Google services of late. A more pressing problem is that someone could have TWO activity streams on Google+, which would be confusing at best, downright creepy at worst. This concern may not be too much of a hurdle given the overall challenge it’s been to get consumers to embrace the network, but it is a problem that other social networking sites like Facebook and LinkedIn have figured out because they are not tied to a specific email address but to a person.

Google has figured out how to make its tools intriguing. Elements like Google+ Hangouts were the stand outs at the time of the original Google+ launch, but relegated to the walled garden of the Google network. The company has smartly started to expand potential use of the tools outside of simple social contexts by adding Hangouts to Google Mail, recently Google Docs and what believe is the killer feature, Google Calendar. Companies that don’t yet “get” social are likely to see the addition of Hangouts as a collaborative tool with a great audit trail. And the social interaction — as well as the inter-team communication that it fosters — will be an organic side benefit. That said, Skype is a solid asset in the Microsoft arsenal with no small user base – wel over 400 million at last count – and making similar integration with existing office tools should be a minor addition for Redmond; having said that, it hasn’t taken place yet, which boggles the mind looking at a company so focused on the idea of collaboration.

Will Google+ for enterprises save the oft-maligned network? We think that a better way to think of this is what Google+ for enterprise reveals about Google’s intentions for its social efforts. Google+ doesn’t seek to be the biggest social network or the one where people spend the most time. Instead, Google+ seeks to be the most embedded social feature in the lives of its loyalist users so that they will never want to leave Google.

Look at Facebook’s biggest problems — it needs to constantly innovate and offer new features to fight off upstarts and retain its users. LinkedIn struggles to get people to even come to their site for more than a few minutes a month. Google+ isn’t a destination — it’s a ubiquitous presence that’s always there and now all the more so if you’re a Google Apps user. This is about social being where you need and want it to be — it’s social being like air.

Do you think Google+ for Enterprise will make a difference against competitors? Do you agree that it makes Google+ more relevant — or will it have little impact? We’d love to you know your thoughts so please share with us!

Analysis: Why Buying Yammer Makes Sense for Microsoft

Charlene Li — Tue, 26 Jun 2012 16:18:02 +0000

Microsoft announced that it would buy Yammer for $1.2 billion, after a week of speculation that the deal was imminent. From my perspective, having researched the enterprise social networking space (see report), the acquisition is a continuation of current trends in the industry and makes a lot of sense for both MSFT and Yammer.

Yammer CEO David Sacks wrote in a blog post about the acquisition, “When most people thought social networking was for kids, we had a vision for how it could change the way we work.” When Yammer launched at TechCrunch four years ago, it won the “best in show” award from judges and it’s been on a rocket ride since then for two simple reasons — it’s free and people love using it. The result: 85% of large companies have Yammer inside their walls.

That love-driven virality is a key reason why Microsoft bought Yammer — after all, who would use the word “love” to describe Microsoft or a product like SharePoint? The fact is that Yammer and its competitors are creating new way for work to get done, that is not only effective but also — dare we say it — makes work fun. Microsoft knew that it was behind in the enterprise social networking space and could either build organically within SharePoint or acquire. I think they did the smart move by buying Yammer as it gives them not only the largest independent player, but also penetration into virtually every company that already is using its products.

The challenge going forward is how Microsoft will integrate Yammer into its Office offerings, in particular, SharePoint. Yammer already enables integration with SharePoint that inserts microblogging capabilities right into SharePoint, making the enterprise app much more social. Up to this point, the main selling points of ESNs has been that they just had to be better than SharePoint’s built-in social tools. That is no longer the case, so you’ll see other enterprise apps companies scrambling to snap up remaining players like Moxie. Here’s a graphic from my ESN report from February that shows how the world (used to) stack up in terms of players — this is a game being played by the big enterprise players now.

While there is concern that adding Yammer makes worse an already-confusing mix of Microsoft offerings, it’s nothing compared to the bewildering situation facing CIOs when it comes to ESN. One CIO shared with me that he faces a situation of having Salesforce’s Chatter, VMWare’s Socialcast, Yammer, and SharePoint all running within his organization. And that didn’t include rogue installations of Box and Google+.

In the end, it makes sense for each company to have one — and only one — enterprise social network in order to ensure universal access. Thus ESNs like Yammer become battlegrounds in the way that other foundational enterprise tools like email, IM, and CRM have become. In this way, Yammer makes a whole lot of sense for Microsoft, as it becomes more integrated into all of its offerings, rather than remain a standalone. Here are some examples:

Any organization with a SharePoint installation will now get supported integration of an ESN into their organization – and more importantly, make sure that the technology actually increases business value.
Any organization with Yammer but that doesn’t have SharePoint will become a lead for Microsoft.
Office 365 gains a huge foothold into SMBs that may have already implemented Yammer, but would never consider SharePoint. If they are already using Google Apps, integration between Office 365 and Yammer becomes a potential switching point.
Microsoft Dynamics has a potential answer to Salesforce Chatter.
Provides a counter to IBM’s Lotus Connections.

Taking all of the above into consideration, the $1.2 billion price tag begins to make sense. But the intangible brand value goes back to where this blog started — the potential that we as workers and companies will again love Microsoft. Even if that translates to just a chance for a mild “like” for Microsoft products because they enable social connections, it will have been worth it for Microsoft to acquire Yammer.

Beyond the IPO: Ten Implications of a Public Facebook

Charlene Li — Tue, 08 May 2012 15:05:37 +0000

By Susan Etlinger, Charlene Li and Rebecca Lieb

The run-up to Facebook’s IPO reminds me a bit of a wedding: everyone’s attention is on the big day (expected to be Friday May 18), without much regard for the weeks, months and years afterward. Charlene Li, Rebecca Lieb, and I sat down to discuss some of the implications of a newly public Facebook: on shareholders, business and Facebook itself. — SE (Cross-posted from altimetergroup.com.)

Whether or not Facebook’s IPO ends up being one of the world’s largest (this Washington Post article places it 6th, between AT&T Wireless and Kraft Foods), it will certainly earn a respectable position in the history of the public markets, a lofty spot for an eight-year-old company in a relatively unproven business.

We identified ten areas where we are watching Facebook closely, as an indication of its success in the future. We picked these topics because they intrigue us, because they provoke discussion and, ultimately, because we believe they are the issues most central to Facebook’s future.

#1. Leadership

In a media frenzy in which anything (such as, for example, wearing a hoodie on a road show) can spark a news cycle, it’s to be expected that Mark Zuckerberg would have kept the lowest possible profile during Facebook’s quiet period. But now during the roadshow, on the first day of trading, and afterwards, he’ll need to step out, step up and set the tone for how he will lead this company into its next major phase. Can he pull it off?

The decision Zuckerberg must make, as a CEO who’s famous for his a “go away; we’re working on it” attitude, is whether he will use this milestone as an opportunity to cultivate his newest constituency: investors. As CEO, Zuckerberg needs to be accountable to his shareholders–not to a stock price per se, but to their faith in him. We will start to see clues to this decision during the first earnings call (a trial by fire for any CEO of any newly public company).

Of course, it’s all fun and games until there is a major hit to the stock price. We know, generally speaking, what the triggers will be: a new, poorly received product, a privacy issue, slowing user growth–the registration statement is full of examples. When this happens, Zuckerberg will have to demonstrate a completely new level of leadership. He’s chosen his executive team wisely in that both COO Sheryl Sandberg and CFO David Ebersman are strong, respected executives who have been through this process before. And, despite his youth, Zuckerberg has learned from previous missteps like member revolts, privacy, and Beacon. If you still wonder if Zuckerberg is ready for prime time, imagine how you’d react if a major, highly unflattering motion picture had been made about you while you were still in your twenties. The issue isn’t if he can avoid controversy, but how well he can quell the concerns of skittish investors.

#2. Innovation

Facebook has a hacker culture; its development mantra, “done is better than perfect,” is at the root of both its growth and its biggest failures. Given the massive number of monthly active users (901 million according to the latest released numbers) the strategy has been to release product to the market and learn as it goes.

But as a public company, Facebook will need to choose whether it will continue to release products the way it has in the past or take a more cautious approach. How will it behave when it’s not just the pundits on Twitter, but the shareholders who react?

Although they’d hate the comparison, there’s a strong role model in Google, which, even as a public company has managed to maintain its agile development strategy. Granted, there’s always the risk of a Buzz (Google) or Beacon (Facebook), but Facebook has demonstrated considerably more focus from the start than Google. Furthermore, the company sent a strong signal in its last quarterly statement that it will continue to make investments for long-term growth, even at the cost of short-term profits. It’s setting expectations that it’s investing for the future, not just for the quarter.

#3. Brands

Will brands buy what Facebook’s selling? Facebook is, after all, a media company, and while it has other sources of income through partnerships, brand dollars are what will ultimately make not only the IPO, but the company itself, succeed or fail. With close to a billion users, Facebook is the biggest media company that’s ever existed, in any medium, ever. Advertisers go where the eyeballs are, which is Facebook’s undisputed advantage. After that, it gets a bit trickier.

Facebook is at the vanguard of developing products that merge and conflate advertising and marketing, that blend content, conversation, paid, earned and owned media with media buys. Advertising is media buying, but those other aspects: owned media (premium brand pages) and earned media (the conversations and comments and interactions brands have with their fans, users and yes, detractors) are part and parcel of what Facebook is working to monetize. It’s still experimental. Brands are still testing the waters and are far from establishing best practices or firm models in a “brand” new environment.

#4. Data

Facebook is also in a position, thanks to its staggering user base, to possess and be able to leverage data on a scale we’ve never before seen. Likes, affinities, social graphs, recent behaviors – it’s all there, together with the basic demographic information. Again, the ability to package, parse, productize, make understandable and actionable this vast quantity of data is as formidable a challenge for Facebook as it will be for the media agencies who buy against these very new models. Facebook’s potential as a marketing data juggernaut is very real, and can potentially take advertising to new levels, if the company succeeds in making that data useful.

#5. Mobile

Most of the coverage around mobile has been focused on Facebook’s “lousy” mobile applications. But we believe this is a red herring – the core issue revolves around the slow development of mobile advertising and marketing. The S-1 says it best in the section on risks related to advertising:

§ “…increased user access to and engagement with Facebook through our mobile products, where we do not currently directly generate meaningful revenue, particularly to the extent that mobile engagement is substituted for engagement with Facebook on personal computers where we monetize usage by displaying ads and other commercial content…”

But with 85% of revenue coming from advertising as of the end of 2011, the more effective Facebook is at appealing to its mobile users, the more it risks shifting revenues from the Web platform where it can monetize users, to the mobile one where it can’t — at least not immediately. So the real question becomes how Facebook will balance creating mobile user value against driving shareholder value.

Facebook can’t risk waiting too long before moving aggressively into the mobile space, but also needs to buy time to help mobile advertising develop. Given this significant risk, the purchase of Instagram represents $1B of earnest money that Facebook is focused on the long term. With the war chest Facebook will have accumulated post-IPO, building a great iPad app and upgrading the smartphone experience is a foregone conclusion. The bigger issue to watch is how well Facebook can develop the mobile advertising market with that experience, in a similar way that it created social media marketing.

#6. Investors

The first earning call is always rough for a first time CEO, and Facebook will likely not be any exception. But what we are watching closely is if Facebook will develop a different kind of relationship with its shareholders. The company is, at its essence, about sharing: will a newly public Facebook use its own platform to share more information with investors? Facebook has an unprecedented opportunity to change the way that it handles investor relations. Will it take this opportunity, or will it stick with the tried and true? We’d love to see Facebook use its own platform as a way to engage with and provide greater transparency to its newest stakeholders: the public markets.

#7. Mergers & Acquisitions

Thanks to Instagram, every venture-backed start-up has dreams of meeting with Facebook’s M&A team. Will Facebook focus on smaller acquisitions to acquire talent or smart ideas, or will it make major deals to really move the ball forward?

One of the more interesting areas of speculation lately is what would happen if Facebook were to buy Bing from Microsoft. With Google arguably its most formidable competitor, the addition of search would give Facebook advertisers a direct response medium they could not get before on Facebook. Google is, at its essence, a search company that has struggled with social. Facebook is a social company that needs search. A Bing acquisition would up the ante in a significant way between Facebook and Google.

Looks good on paper, but acquiring Bing would also be a huge distraction and a departure from Facebook and Zuckerberg’s legendary ability to focus on social sharing. A more likely scenario is that Facebook and Microsoft continue their long-term strategic partnership, integrating Bing deeply into the Facebook search experience.

Regardless of whether it buys Bing or another organization, few companies do the “merger” part of M&A well. We expect that Facebook will focus on smaller acquisitions that it can absorb and leverage quickly, while any large acquisitions like Instagram will be kept running separately, in much the way that Google ran YouTube as a separate entity for years. Again, a focus on the long term gives Facebook the ability to look at M&A in a very different way than traditional companies who much justify every single penny spent on a company.

#8. Culture

Facebook is a private company in many respects (one of which is about to change dramatically), but the internal culture has always been very open. It has invested heavily to create this open culture, and it has slowly but surely been reducing the amount of information shared internally in the run-up to the IPO.

This will only increase, as the company will now be beholden to even more securities industry regulations intended to protect investors from selective disclosure. So again the balancing act, this time between employees (and openness) and shareholders (and fiduciary responsibility). Which leads us to…

#9. Talent

Once it goes public, how will Facebook retain talent, especially top talent? Expect to see the usual exodus as people wait to vest, then cash out (the Bay Area housing market is already bracing for impact). But, again like Google, Facebook will retain its cachet for some time to come, and some will be motivated by the opportunity to change the world from within Facebook rather than from without. Where else can you find a platform of 900M people to try out your next great idea?

#10. Privacy

Zuckerberg has said that increased sharing is core to Facebook’s growth. But with greater sharing also come increased pressures on and threats to user privacy.

Over the past eight years, Facebook has mastered the art of trial and error when it comes to privacy. There have been huge missteps (Beacon), significant improvements (to privacy settings) and escalating tensions as the company has continually pushed its users to share more, and more often, frequently beyond their comfort zones. The company has accumulated a great deal of resilience along the way, and has tried to balance giving people a granular degree of control (at the risk of confusing them) with offering a simplified experience (at the risk of alienating them).

The addition of Timeline, and the emergence of “passive sharing,” raise the bar yet again. A few months ago I installed the Washington Post Social Reader on my Timeline. Now I know that it involves social sharing, but one day when I was in need of a little “mental floss,” I clicked on a story about Snooki’s recent weight loss. I didn’t think anything of it until a bunch of friends and work colleagues started teasing me. There it was, along with comments: “Susan Etlinger read an article: “Snooki Finally Reaches Goal Weight of 98 Pounds – But Has She Gone Too Far?” I was, frankly, mortified. I’d forgotten I was “in public,” and I am someone who is supposed to know better.

Wherever your stance on Facebook’s privacy record, privacy will continue to be a litmus test issue for Facebook. User outrage is one thing; shareholder outrage is quite another. We will watch to see how Facebook balances continued innovation against privacy. Where will Facebook stand when and if privacy issues affect the stock price — will they pull back or forge ahead?

As always, we’d love your thoughts on these issues. What are you watching as Facebook heads into its IPO?

Webinar: A Foundation For Mobile Business

Charlene Li — Tue, 20 Mar 2012 17:46:19 +0000

Now for a word on mobile in the enterprise. Altimeter’s mobile analyst, Chris Silva, is working on a report that explores how managers on the business-side – not the IT – side of the organization are increasingly leading the charge to bring mobility to their workforce.

A key challenge is how to build the control and security foundation for a mobile business strategy. Chris and I will be hosting an open, no-cost webinar on Wed March 28th at 10am PT/1pm ET that will discuss the key elements of the mobile control layer, its importance, and how both the technologies and leadership elements should come together to provide a foundation for a coherent enterprise mobility strategy.

The Mobile Control Plane Should Underlie All Mobile Strategy

Having business leaders take the reigns in mobile is a growing trend and a change in strategy that ensure the people who know the needs of the mobile workforce are driving strategy. This strategic shift, however, still relies on IT having put in place a mobile control layer that provides security, management and overall policy to govern mobile as it spreads across the organization. This foundation, which underlies all of the business-driven use of mobile, is comprised of many pieces and goes well beyond mobile device management (MDM) the increasingly catch-all phrase that vendors are using to insinuate themselves onto shortlists of mobility partners.

This session will be interactive, with Q/A and will answer the following questions:

What are the steps I must take before I can hand my line of business managers (sales, support, products) the reigns to deploy the mobile strategy that’s right for them?
What is IT’s role vs. the business management’s role in making mobility an element of strategy that positively impacts the business?
What technologies and strategies should be in my “plan” to enact mobility? Isn’t MDM enough?

We’re going to be looking at what the most common use cases are for mobility, the challenges organizations have encountered in bringing mobile tools on board and explore what the best tools are – and the partners that provide them – depending on the workforce you’re trying to empower.

The webinar will take place on Wednesday March 28th at 1PM Eastern/10AM Pacific time.

Register today at: http://bit.ly/mobilecontrol

Report: Making The Business Case For Enterprise Social Networks

Charlene Li — Wed, 22 Feb 2012 09:58:59 +0000

In 2011, the US hit a milestone — more than half of all adults visit social networking sites at least once a month. But when it comes to using social-networking technologies inside organizations, many business leaders are at a loss to understand what value can be created from Facebook-like status updates within the enterprise. Some organizations have deployed social-networking features with an initial enthusiastic reception, only to see these early efforts wither to just a few stalwart participants. The problem: Most companies approach enterprise social networks as a technology deployment and fail to understand that the new relationshipscreated by enterprise social networks are the source for value creation. Yesteryear, internal technology departments could force software on business units, but in today’s consumerized world, business units can adopt enterprise software, often without IT ever knowing. As a result, a new approach is required that focuses on four key ways that relationships create value through enterprise social networks:

Encourage sharing.
Capture knowledge.
Enable action.
Empower employees.

This is the first of two reports on enterprise social networks, with this one focused on how it creates value for organizations. The next report will focus on maturity models and the future of enterprise social networks.

Altimeter Report: Making The Business Case for Enterprise Social Networks

View more documents from Altimeter Group Network on SlideShare

Data HighlightsThe report also includes input from 13 technology providers, 185 end users, and surveyed 81 ESN decision makers from companies with over 250 employees (see below in Related Resources for links to the data). A few of the findings and graphics from the report are included below. There was only moderate impact on business goals. On a scale of 1 to 4, the highest impact seen – improving collaboration between departments/teams — scored only a 2.91 (see Figure 5 below).

A key reason for this is that there were few metrics used to gauge effectiveness. Most metrics were engagement-oriented in nature and not necessarily tied to business impact. For example, the top three metrics used were 1) More/faster collaboration across the company; 2) Frequency of use; and 3) Engagement across the company (% of employees using it) (see Figure 6-1 below).

In fact, no organization surveyed believed they measure ESNs very well, and only 31% felt they measured ESN impact somewhat well. A quarter admitted that they didn’t measure at all! (see Figure 6-2 below).

Four Ways Enterprise Social Networks Drive Value

Despite the promise and potential for ESNs, they have only received moderate traction. The problem is that most ESN deployments to date have been treated as technology deployments with a focus on adoption and usage. A different way to think about this is that ESNs represent a new way to communicate and form relationships — and because of that, can bridge gaps that exist in terms of information sharing and decision-making processes. To better understand these use cases, we found that they boil down to four different types of gaps in the organization — tough problems that can’t be addressed by the current technology, process, or culture.

Encourage sharing. Remember how revolutionary email was? It fundamentally changed the way we communicated by reducing the cost/effort and collapsing the time frame and scaling it to include multiple recipients. Social represents a fundamental change, simply because, at its essence, it encourages sharing. The simple presence of a status update box on a page encourages people to share their thoughts, activities, and expertise.
Capture knowledge. Capturing the collective knowledge of an organization is a daunting task because it includes a wide range of facts, information, and skills gained through experience. Yet few people proactively sit down each day to document and capture their knowledge. ESNs provide an opportunity to do just that, by capturing glimpses of knowledge through profiles, activity streams, and interactions.
Enable action. Having an ESN in place means that operations and processes can begin to change as well. This happens when the day-to-day process changes because the ESN enables new relationships and behaviors that address a gap that prevented actions from being taken.
Empower employees. The last way ESNs drive value is that they empower and embolden people to speak up and join together, as well as gives them opportunities to contribute their skills and ideas.

Enterprise Social Network Action Plan

To be successful with your ESN, you need thus to focus on how relationships can close the gaps of information flows and decision making in your organization. To do this, you should take four steps, with your technology selection coming last, not first.

Related resources. In the spirit of Open Research — and to spur further discussion on the topic of enterprise social networks, we are also making available a PDF summary of all questions asked in the survey, a PowerPoint of the graphics, and the full data set. If you discover additional insights, we ask that you share back your findings with the community.

Enterprise Social Networking Survey Highlights. PDF of survey questions and highlights. Note that not all data points were used in the report. This is the raw output for response from organizations with over 250 employees. Conducted during Q4 2012.
Enterprise Social Networking Survey Data Set. Spreadsheet containing survey responses from organizations with over 250 employees. Feel free to download and cut the data, under the Creative Commons non-commercial, for attribution license.
Enterprise Social Networking Data PowerPoint. Presentation containing the major graphics and data charts from the report.

Webinar. I’ll be doing a Webinar on Thursday, February 22nd, 2012 at 10am PST on the report with Socialcast’s CEO Tim Young. More information and registration is available at http://t.co/1XI8nMkp. It will also be recorded and available for playback on Socialcast’s site.

Related blog posts:

Altimeter Group: Cross-posted “Report: Making The Business Case For Enterprise Social Networks“, February 22, 2012
Web Strategist by Jeremiah Owyang: “Enterprise Social Networking: Focus on Relationships (Altimeter Report)“, February 22, 2012

Stay in touch. Would you like to be notified about upcoming reports or even participate in our research via surveys or interviews? Please let us know by filling out this form.

Open Research This independent research report was 100% funded by Altimeter Group. This report is published under the principle of Open Research and is intended to advance the industry at no cost. This report is intended for you to read, utilize, and share with others; if you do so, please provide attribution to Altimeter Group.

New Report: “Make An App For That: Mobile Strategies For Retailers”

Charlene Li — Tue, 07 Feb 2012 18:16:20 +0000

When it comes to shopping, I have a love/hate relationship with my iPhone. Some apps are actually helpful, letting me explore products or buy something immediate. But the vast majority of the retailer apps litter my screens, sitting unused after an initial, disappointing whirl.

My frustration is reflected in the findings of my colleague Chris Silva‘s new report, entitled “Make An App For That: Mobile Strategies For Retailers“. Of particular value is that Chris pivots the report around two major strategies retails can use when it comes to mobile:

Enrich: These strategies are focused on driving transactions and measured in total purchases, purchase size or frequency, and purchase-per-store metrics. The ROImodel is simple — engage mobile buyers and grow the business.
Engage: Engage strategies are not as transaction-centric as enrich strategies and are aimed at improving user interaction and brand affinity. Engage strategies can provide product information, post-purchase support, or help to provide a presence for retailersand brands with a fully online presence. The focus is on bringing shoppers closer to the brand to drive interaction, not just spend.

The problem is that most retailers approach mobile for mobile’s sake and miss the mark when it comes to delivering value for the mobile consumer. For example, Chris points out that Abercrombie & Fitch’s mobile app doesn’t actually show any of it’s clothing while Longhorn Restaurant’s app has a cool 3D app that lets me cook a steak — but I can’t directions to the nearest restaurant.

What’s Your Mobile App Strategy?

One of the things I love about this report is that it is jam packed with highly actionable advice. Below is an example of a decision matrix which maps our your mobile app strategy options based on type of product and your goals.

Chris lays out four types of mobile apps that retailers can build, and makes the call on when to use which by writing, “As a rule of thumb, informational applications and Buy/Ship applications are most oftendesigned to build interaction with users and engage new buyers. In some of the strategiesamong brands that have been successful, the winning ingredient in the application is theinformation source the user turns to, which builds trust and engagement with that user todevelop a “go-to” relationship. Meanwhile, at the other end of the spectrum, augmenting and, perhaps, fundamentally changing and improving the user’s buying experience can reap vastrewards for the company while solving a real user pain. Regardless of the application choice,the need for a novel tool that solves an actual user’s problem is key to driving customer use.”

But my favorite part is at the end, where there is 1) an assessment tool to help you determine your mobile app maturity, and 2) recommendations on what to do first, second, and next based on the findings from the maturity assessment. I’ve included the recommendation graphic here but you’ll need to link over to the report to see the assessment tool.

Want To Learn More?

Here are a few things to do:

Read the report. I’ve embedded it below and it’s also at http://bit.ly/zuMYZb.
Attend a webinar Chris is doing on the report on Friday, March 2nd at 10am PT. Here’s the link to register.
Follow Chris on Twitter at @802dotchris.
Read blog posts about the report from my Altimeter colleagues. I’ve included links to them below.

Chris Silva: New Altimeter Research: Make An App For That

Jeremiah Owyang: Hey Retailers! Refine That Mobile Marketing Strategy

Make An App For That: Mobile Strategies For Retail

View more documents from Altimeter Group Network on SlideShare

Jerry Yang’s departure signals a New Day for Yahoo!, the passing of an era for Tech

Charlene Li — Wed, 18 Jan 2012 00:30:23 +0000

My first reaction to the news that Jerry Yang is leaving Yahoo! was that this was the passing of an era. I first met Jerry in 1994 when he was still a PhD student at Stanford, before he and David Filo left to run Yahoo! full time. Through bubbles and two economic downturns, Jerry has always been omnipresent in Silicon Valley.

But all good things come to pass. With the arrival of Scott Thompson as the new CEO of Yahoo!, it makes sense that Scott be given a clean slate upon which to write the future of Yahoo!. This is very much the norm for incoming CEOs, where founders are asked to take a diminished role or expected to leave the company completely.

This is the case with Jerry all the more so, as he was (is?) a vehement supporter of Yahoo! remaining independent. Regardless of Jerry’s real or perceived position toward independence or selling off assets such as Alibaba or Yahoo! Japan, it’s still all baggage hanging on from a previous era. Scott and Yahoo! need the freedom to set the vision and strategy for Yahoo!, unencumbered by the past. The last thing Scott needed was the ghost of Yahoo! Past — embodied in the very real, very smart, founder and former CEO of Yahoo! — sitting at the boardroom table.

So what does the future bring for Yahoo!? While many people have written off Yahoo! but I’m less inclined to do so for the following reasons:

Loyal users. It’s amazing to me that Yahoo! attracts 700 million unique and very loyal users each month. That’s somewhat less than Facebook’s 800 million users, but it’s huge by any standard. Through thick and thin, they have stuck with Yahoo!, despite having a plethora of other options available to them. But how there continues to be continued erosion so Yahoo! will have to invest in it’s “front doors” of Mail, MyYahoo!, and Home Page, as well as new offerings around it’s user engagement vision. As my colleague Rebecca Lieb commented in this article, “”Yahoo is a very vaguely defined company strategically,” Lieb said. “It has a million or zero identities. It’s everything and nothing.”
Access to implicit social and interest graphs. The emails and address books of those 700 million users create an implicit social graph, similar to the one that Google is trying to tap via Google+. Front page content reading leads to tremendous data about what those 700 million people are interested in. This is gold for future targeted advertising, but Yahoo! has done little to develop or market these capabilities.
Advertisers wanting to reach those users. Yahoo! will generate about $5 billion in revenue this year, most of it from advertisers with whom it has a direct relationship. But those revenues are declining as other options are growing.
Technology chops. Yahoo! has had the ability to be ahead of the market, from purchasing Flickr and Delicious to starting an early form of a social network in Yahoo! 360 back in 2005. I continue to admire and use Yahoo! Pipes and it’s developer APIs remain excellent. What it’s lacked is a clear vision of how those investments tie into a coherent vision and strategy for Yahoo’s relationships with users and advertisers.

One scenario I can see happening: Yahoo! sells off Alibaba and Yahoo! Japan to generate cash to purchase interesting start-ups that will enable it to develop state-of-the-art social and personalized offerings for its 700 million loyal users and advertisers. As a neutral and trusted player, Yahoo! can tap into the social and interest graph data from Facebook, Yahoo, LinkedIn, Google+, or any other newcomer, making sense of the ever-changing landscape to its users and advertisers.

So I wish Jerry Yang the best, and I wish Yahoo! the best — not only for nostalgic reasons but also because I think there’s still yet another chapter to be written for both of them. Jerry is still youthful and hopefully restless still to make an impact — and it will be a lucky start-up who can tap into his now ample free time.