[ VIRAL PATTERNS ]
After going solo again in mid-2004, he tried another virality experiment on Birthday Alarm, which was reminding more than 1 million people a day about their friends’ birthdays. While he was at Tickle, the engineers had tried email scraping, a program that would automatically import a person’s contacts, but it didn’t work. Birch figured if he could create a program that would make it even more convenient for Birthday Alarm users to list their friends’ emails—the site still employed his simple cut-and-paste function—it would improve the site’s viral coefficient. He targeted Hotmail and ten hours later finished the code. At the time, Birthday Alarm was getting 10,000 new sign-ups a day. Now that Hotmail users could easily import their address, membership spiked. Twenty-four hours later he counted 100,000 new members.
Birch kept on experimenting. He returned to his very first idea: a self-updating address book, applying everything he had learned along the way. He called it Bebo, a name he chose because it was short, snappy, and utterly nonsensical, like Yahoo. Users could project their own meaning onto it, which was well worth the $8,000 the domain cost. Later he turned it into an acronym for “blog early, blog often.” He put the link up on Birthday Alarm, seeding it with just a few members, and it “went ridiculously viral,” so much so that he took the link down after seven days. The viral coefficient: 2.5. One million people signed up, three hundred thousand of them on day nine alone. By the end of a month, he had a few million members. But the concept wasn’t sticky; no one was coming back. After signing up, people didn’t bother to update their address books, and what good was an address book if only 10 percent of your friends were in it?
Eyeballing the data, Birch noted another pattern. Those with the biggest address books—say, five hundred names—were the first to sign on, and they tended to spread it to others with similarly large virtual rolodexes. That, he saw, accounted for the initial viral spike. Over time, the sign-up rate decreased as people with leaner address books joined. But someone with ten addresses was virtually impossible to reach because he was part of the small-is-beautiful flock, included in other less-connected people’s address books. “So you end up exploding within all these well-connected people and filtering down to less-connected people,” Birch says. “Your viral growth diminishes to the point you end up getting a viral factor of 1,” which was where it remained, decreasing to thirty thousand new members a day. Nevertheless, he had built a network of 6 million users. At the time, Friendster had already imploded and MySpace registered 9 million unique visitors.
While his noncompete prevented Birch from combining pictures with profiles, which was the definition of a social network in his noncompete agreement, nothing prevented him from adding photo share to an address book. That, too, proved reasonably viral. After the clock ran out on his noncompete, he and his wife, excited about the possibilities, spent three months redeveloping Bebo into a full-blown social network with profiles, pictures, blogs, and an invitation system. It would be, at its essence, a community enabler, helping people to get to know one another without the societal constraints that characterized public interaction. Because MySpace was quickly cornering the market on American teens and Facebook was roaring through college campuses, Birch targeted urban thirty-somethings who, he believed, needed a means to widen their social networks. As people aged, they became mired in their own cliques, rarely venturing outside their established networks, even though the ideal future friend might be sitting on the next bar stool. Friendships were often predicated on similar interests, but to learn what interests someone had required getting to know him.
Bebo would streamline the process, and it would do it through electronic mail. Not email per se, which, while virtually universal, was two-dimensional. Its mail would be far richer, three-dimensional communication, because everything a user sent and received would be purely personal. Not like a fantasy video game or immersive virtual world either. It would be tethered to reality, a person’s existing social relationships transported to the digital realm, which would foster other relationships that could seep into the offline world. A recipient could click on the name and encounter a kind of Rorschach test—a page devoted to human expression—and learn about the person who sent it. Bebo would pull together media that previously functioned separately in the way that mobile phones combined phones, SMS texting, and email. Birch envisioned a day that Bebo would do all of this while adding blogs, chat, photos, quizzes, and any other product of the human mind, which together would become a multimedia channel.
[ CRITICAL MASS ]
When Birch unveiled the revamped site with all of the new functions, he expected it would take off. It didn’t. Traffic stayed flat. Although it occurred to him that Bebo might simply be too late to the social network party, he didn’t panic. MySpace was grabbing the kids and Facebook was targeted to college students. Bebo, on the other hand, by virtue of starting out as an auto-updated address book, was keyed on an older demographic. But teens and twenty-somethings are always the earliest adopters. They have a lot more time on their hands than adults, less money to spend, and social networks are free. It would take time to bring in the over-thirty crowd. He also suspected that repositioning the Bebo brand had sapped momentum. While he counted more than 6 million members, most had simply inputted their names and the names and addresses of their friends. When he browsed the network, he encountered a sea of bare-bones profiles. It was like stepping in to your local pub and encountering only a few customers. “We needed a critical mass of people who had filled out their profiles to make it interesting,” Birch says. In the interim he kept tweaking the site, making it run faster, trying to improve the user experience. For two months Bebo treaded water. Then profiles began to fill up with photos, comments, and overlapping conversations between friends.
Bebo, Birch realized, had finally attained a viral loop. From a base of 6 million users, the site was increasing page views by 10 percent a week. The steep course correction had proven the right move, but it was growing in a surprising direction. Another teen population had discovered Bebo: British youth, who took to the site with the enthusiasm American teens had when the Beatles first crossed the Atlantic. Over the next several months it spread to Ireland, Scotland, New Zealand, and Australia. As one British commentator remarked, teenagers were “taking to Bebo quicker than they can pop a can of paprika-flavoured Pringles.”
Birch focused new-member recruitment on universities and high schools across the UK, Australia, and New Zealand, listing them on the welcome page. To sign up, new users had to state where they attended school, and this acted as a magnet for others. As a result, Bebo outpaced MySpace in England and proved so popular in Ireland that several colleges banned access before the start of summer exams when students complained they couldn’t get near a computer terminal to work on their theses with so many peers logged onto Bebo. One college estimated half its bandwidth was consumed by students on Bebo, while another found more than half of its computer terminals were logged onto the site at any given time. Birch estimated that five hundred thousand Irish youth were members, which, as one newspaper pointed out meant “virtually every teenager in the country has their own page on Bebo.” It ended up the largest trafficked site in all of Ireland, passing Yahoo, MSN, and Google. Within ten months, Bebo counted 24 million members leafing through 2.5 billion monthly page views.
He found it ironic that he had left Britain for San Francisco to start a social network that took off in Britain. Perhaps he had imbued Bebo with his own personality. There were places his British sense of humor came through, like when someone didn’t post a picture, a big question mark would appear. The more likely explanation, he decided, was that no social network had achieved penetration outside of the United States. Britain was largely virgin territory, largely because it tends to adopt trends and technologies after Americans. Bebo was there when MySpace arrived and was in a prime position to take advantage.
Birch and his wife maintained a clear division of labor, h
e acting as chief executive and programmer, she handling the money and dealing with customers. Every dollar Bebo earned from advertising they plowed back into the site, adopting the grow-at-all-costs network effects model. They kept overhead low, adding minimal staff. For the first year the Birches funded Bebo with income generated by Birthday Alarm, which by this point was bringing in a few million a year. Nevertheless they raised $15 million in venture backing from Benchmark Capital. Barry Malone, a Benchmark partner, learned of Bebo from his daughters, who had become hooked on the site. But the Birches would never touch that money, since they were able to keep Bebo afloat with the income the site generated. If they didn’t have to plow huge resources into development, Bebo would be profitable.
Borrowing concepts from MySpace, its larger competitor, Birch also learned from its mistakes. One was themed, user-generated skins in customizable patterns that Bebo members used to decorate profiles. Birch extended them to advertisers like Nike as a way to extend their brands. Instead of allowing users to fiddle with a page’s HTML (as MySpace did), Birch required Photoshop. HTML was a security risk, and because it was complicated, beyond the technical level of many users, MySpace was littered with broken pages. Photoshop was easier and Bebo-ites happily shared their art, with their creators earning cred when their skins were on twenty thousand other profiles. Because snap-happy teenagers spiced up pages with images, Birch lifted restrictions on uploading photos, which resulted in even more user engagement. It came at a price, though, with Bebo burning through a few gigabits of bandwidth a second, requiring 120 servers and technical finesse to keep the site up and running.
Another MySpace initiative that translated well to Bebo centered on music, with Birch launching a campaign to attract bands to the site. Each group was offered a home page that enabled musicians to interact with fans and upload unlimited music and videos. Birch designed it so users could share songs and spread the word about bands they like. There was a playlist function for users to create lists of favorite tunes, shareable with their network of friends. The most popular lists were promoted on the site and to ensure a steady supply of music, Birch signed agreements with several record labels and independents. Within two weeks more than twenty-five thousand groups and individual artists had signed up.
One area where he wouldn’t copy MySpace was the way News Corp. was layering in advertising, which Birch believed had the potential to alienate his user base. The classic banner ad that had been driving Internet marketing for a decade would eventually die off, because on social networks it wasn’t about throwing ads like confetti at users—it was about integrating product experience. And the demographic that first tuned into social networks—teens, “twenteens,” which was how some in their early twenties not ready to graduate to adulthood referred to themselves, and young working stiffs—were the consumers of the future. They were pulling away from TV, didn’t buy newspapers or magazines, and were intent on setting up house on the Web. As Birch’s own data showed, they were online a lot, much of it spent on social networks. To reach them, companies would have to come to social networks, but on users’ terms. Although Birch didn’t have all the answers, one experiment showed promise. Instead of trying to divine what kinds of ads would be most effective, through a complex relevance algorithm, Birch opted for an explicit targeting strategy that let users choose the types of ads they wanted to see. He wasn’t concerned about revenue anyway. Right now he was focused on growth, and to accomplish that he had to continue providing an enjoyable user experience. Once he had a large enough base, he was confident he would be able to monetize. As it was, the site was reaping millions a month in revenue.
[ SOCIAL PROBLEMS PLAYING OUT ON THE WEB ]
While Bebo grew at a fantastic rate overseas, Birch’s family life in San Francisco remained downright normal. He woke up at 6:30 a.m. to help his children get ready for school; then, after dropping them off, he and his wife would arrive at the office at 8:00 a.m., and Birch would spend half the day programming. The few meetings he held were with suppliers and prospective partners or advertisers. With Bebo adding ten thousand new members a week, either he or his head programmer was always on call, since they were the only ones who knew the site’s architecture. Since his co-coder got his kicks from skydiving, Birch would stress whenever he took to the sky. Then he would leave around 7:00 p.m. to see his kids for an hour before they went to bed. A few times a week he attended networking events, for instance, a website launch, and he traveled to England, where he and his wife would combine business with pleasure.
Things were humming along, with Bebo the subject of fawning press coverage in the UK, until a spate of articles on bullying, a scourge of British society transplanted to Bebo, hit the media. One of the first, appearing in an Irish newspaper, began: “She’s such a stupid, ugly bitch. I can’t stand being in the same classroom as her. Everybody hates her. I’d kill myself if I was her.” The reporter pointed out this wasn’t even one of the most offensive posts about the girl. She called Bebo “a forum for bullies to attack their victims,” with pupils “being bullied remorselessly about their perceived weight, poverty, appearance, intelligence and promiscuity, among many others.” One Dublin school suspended ten students for bullying on Bebo, with teachers among the victims. Then came death threats against two men suspected of being linked to the murder of a teenager. There was the man who used Bebo to disseminate porn to teenage boys and mobile phone video of rugby fights.
Birch found himself confronting the broken-window syndrome. When bad profiles proliferated, he blocked them; others took their place, and the cycle continued. Because he couldn’t prevent anonymous users from creating new profiles, Birch enlisted the community to police the site, vowing to shut down abusive sites within twenty-four hours of being contacted. After an Irish Times report, Birch pulled all ads for gambling sites and dating services and appointed an expert in online pedophilia to work toward helping make Bebo safer. Then came a disturbing rash of teen suicides in Wales in which members of an Internet cult communicated through the site. The more popular Bebo became, the more it attracted controversy.
While MySpace fetched more than $500,000 in 2005, Birch long maintained he wasn’t looking to sell, even when Bebo became the third biggest social network in the United States and secured its popularity in the UK. Techcrunch, the gadget blog, claimed investment bank Allen & Co. began shopping Bebo in 2007 with a suite of potential buyers—News Corp., Microsoft, and Google—declining to make an offer. Viacom reportedly made a run for Bebo, and Yahoo took a long hard look. But it was AOL that stepped up, offering cash, and lots of it. After six months of hard negotiations, with Bebo growing to 40 million users spending an average of forty minutes a day on the site, the Birches sold the site on March 13, 2008, for $850 million.
The young couple that nine years earlier had mortgaged their home to finance their viral dreams walked away with $595 million, which was more than News Corp. paid for MySpace.
11
Viral Clusters
Facebook, the Social Graph, and Thingamajigs
Facebook, MySpace, and Bebo are but three of more than a hundred social networks around the world. Almost anyone with ties to business has a profile on LinkedIn, Ecademy, Ryze, Spoke.com, or XING. Twitter has become its own medium, with passionate adherents keeping tabs on one another in short, haiku-like bursts, while Yammer taps workers in a corporate setting. Imeem is a social music service with millions of members streaming millions of songs and videos. TravBuddy and Travellerspoint connect inveterate travelers. Ning is, at its essence, a social network for those who create social networks, while hi5, with 60 million users worldwide, has a decidedly international twang and is numero uno among Spanish speakers. Blackplanet’s membership is primarily African American. Buzznet focuses on celebrities, media, and music, while CafeMom connects mothers. Care2 appeals to green activists, Gaia to those who want to change the world, and DeviantArt to artists. Eons.com has created a community for baby boomers, while Elftown is for scien
ce fiction fans. Many of Tagged’s users are married but looking for friendship and discreet hook-ups, Adult Friend Finder makes an uninhibited play for sex, fubar touts itself as “the Internet’s only online bar and happy hour,” and FetLife is, according to the site, “similar to Facebook and MySpace, but run by sexual deviants like you and me.”
Social networks have become a global online phenomenon. Orkut is tops in Brazil, Biip is big in Norway, and the anime-like Cyworld is South Korea’s most popular online community, with 90 percent of Koreans in their twenties joining (and social ostracism awaiting those who don’t). CozyCot is limited to Southeast Asian women, Dol2day is a platform for politically interested German speakers, and Grono.net lives in Poland. Cloob is an Iranian virtual society, Xiaonei a clone of Facebook in China, Wretch is big in Taiwan, and Mixi is popular in Japan. Iwiw.hu holds sway in Hungary, the Finns go gaga over IRC-Galleria, Skyrock hails from France and has been exported to Senegal, and VKontakte rules Russia. The world map is constantly evolving, with competing networks making inroads and sometimes passing entrenched communities. Some are American transplants like Orkut, hi5, and Friendster, which all failed to take off in the United States but have thrived abroad. Like Bebo, each experienced a viral growth pattern that transplanted it far away from its home market.
For example, Friendster. According to Inc. reporter Max Chafkin, as the social networking site was melting down in early 2004, one of its engineers noticed that traffic shot up around 2:00 a.m. He checked the logs and discovered that most of these night owls were actually logging on during the day from the Philippines, fifteen hours ahead of California. Seeking the first member to friend a Filipino, he backtracked through the data until he came to Carmen Leilani De Jesus, the ninety-first person to join Friendster. A marketing consultant and part-time hypnotherapist from San Francisco, she was connected to dozens of Filipinos. They in turn joined with thousands of others, spreading Friendster across Southeast Asia. Because they surfed the network during off-peak hours, they hadn’t experienced the slow page-loading times, brownouts, and outages plaguing Americans. Soon more than half of Friendster’s traffic originated halfway across the world.
Viral Loop Page 22