Facebook’s Stock options

Cash is good, and Facebook, following its $240 million investment from Microsoft, now has plenty of it. It might have much much more if reports prove true that other investors have, or will soon, join in. With those lofty sums, Mark Zuckerberg and his crew can hire armies of programmers, build data centers, acquire other startups and do whatever else they need to do to make the company grow.

There’s at least one way, however, in which the fallout from this blockbuster financing round could hurt: it will make Facebook’s stock options — the main financial incentive to work at any Silicon Valley company – much less attractive. Options, of course, give the employee the right to buy stock at a given price. That price will go up significantly for options granted to new employees following Microsoft’s investment and Facebook’s jump in valuation to $15 billion. That means that options granted from now on will be less valuable than those the company awarded before the financing round.

Jim Breyer, a Facebook board member, declined to comment on the specifics of the financing or the valuation of employee stock options. But he said Facebook was likely to remain attractive to many recruits.

Google’s OpenSocial is not a Facebook killer

For the last year, Sergey Brin has been campaigning at Google with the slogan “features not products” in an attempt to reduce the sprawl of the company’s eccentric creativity.

This campaign may have gone too far, at least when it comes to Google’s new OpenSocial initiative. Google’s new programming interface that allows social networks to communicate with applications is a nifty add-on feature, but it’s not a product. And thus it doesn’t compete with Facebook, despite the dozens of blog posts that say it does.

I can’t believe OpenSocial, in itself, can revive Google’s Orkut social network, which is moribund most everywhere except Brazil. That said, if there are developers who write applications in Portuguese, Orkut could become even more popular and more widely used in Brazil than it already is.

Think about Facebook. If you like Facebook, it’s still because of its core features — the way it lets you communicate and keep tabs on your friends. If you like any of the new applications, it is because on the margin they let you do what you already like doing a bit better. You can throw a sheep at someone instead of poking them. I haven’t seen a Facebook application so compelling that you would join Facebook just to use it.

The frenzy about open platforms misses an essential truth: no one will go through an open door if there isn’t something worthwhile on the other side. The best example of the sort of platform that works is Google Maps. It is a powerful, flexible way to display geographic information. When combined with interesting data, the results can be compelling. (Here is the Los Angeles Times’s wildfire map. Here is a blog with many more examples.)

Social networks do have interesting data that could be used in a mashup application: Profiles of members, and links that define the relationships between members. But this data is only useful if the network has deep penetration of the people users care about. I can see why Marc Andreessen’s Ning, which helps create custom social networks for little league teams and such, might find OpenSocial useful.

Google leads group assault on Facebook

The search engine and its allies will offer a single, cross-site open platform, hoping to lure developers away from Facebook

Google and some of the world’s largest social networks have launched their most aggressive attack yet on Facebook, their young rival.

An alliance of companies led by the search engine is planning to introduce a set of common standards that will let software developers write programs for Google’s social network, Orkut, and others such as LinkedIn and Friendster.

The strategy draws inspiration from a feature introduced by Facebook earlier this year, which enables outside developers to write applications for the site, which can then be downloaded and shared by Facebook users.

A cross-site, open platform will, Google hopes, be more attractive to developers than Facebook, and siphon off some of the momentum from the rapidly growing site, for which more than 5,000 applications have been written since it opened its platform in May.

Google takes on FaceBook with OpenSocial

Google’s open social networking platform play is the buzz of the blogosphere tonight. (see Techmeme). Indeed, it is called OpenSocial in that the set of APIs allows developers to create applications that work on any social network that joins Google’s open party. So far, besides Google’s Orkut social net, LinkedIn, hi5, XING, Friendster, Plaxo and Ning (see Marc Andreessen’s post) have joined the party.

Oracle and salesforce.com are also supporting Google’s OpenSocial efforts, which indicates that they have plans to add social networking elements to their application platforms. OpenSocial will officially launch on Thursday.

Plaxo emailed a statement about OpenSocial this evening, getting ahead of the stampede:

“Dynamic profiles redefine what users should expect in terms of how they can represent themselves in a social or business network,” said Todd Masonis, Co-Founder and VP of Products for Plaxo. “We believe that users should have full control over what they share with whom – and that the catalog of widgets that they can choose from should be as open and diverse as the web itself. We are excited to support in dynamic profiles any application written to Google’s just–launched OpenSocial APIs. ”

According to TechCrunch, which first reported on Google’s larger social networking ambitions, OpenSocial consists of APIs for profile information, friend information (social graph) and activities, such as a news feed. OpenSocial users Javascript and HTML rather than a markup language as Facebook does.

This comes on the heels of the Facebook’s dynamic growth based on opening its social graph to developers and Microsoft’s $240 million investment for 1.6 percent of the company. However, unlike Google, Facebook doesn’t open its APIs to support other social networks. The other social networking giant, MySpace, is also planning to open its platform to developers.

This openness is part of what Vic Gundotra, Google’s head of developer programs, meant when he said last week, “In the next year we will make a series of announcements and spend hundreds of millions on innovations and giving them away as open source.”

He explained the newfound openness as more than altruism: “It also makes good economic sense. The more applications, the more usage. More users means more searches. And, more searches means more revenue for Google. The goal is to grow the overall market, not just to increase market share.”

What does OpenSocial mean for Facebook?