Facebook is lucky it missed buying Twitter and now should eat Yelp

Poster inside a Facebook office

Twitter is getting a TON of hype right now. Even today, on ABC radio, I heard about a meter for your plants that tells you they need water via Twitter. Here’s a “Tweet a Watt” do-it-yourself kit that lets you build a power meter that will work with Facebook and Twitter.

Sorry, got distracted there by the hype. Remember when Facebook tried to buy Twitter and failed?

That might have been the best possible thing that would happen to Facebook (and Twitter, actually). Let’s be honest, much of Twitter’s functionality is already built into Facebook, Zuckerberg and team just need to turn on a few new features (Steve Gillmor calls them “track”) and then everyone will get why Facebook will do just fine without Twitter.

But Twitter isn’t where the real money is. Where is that?

Getting businesses onto the social graph.

“Scoble, you’re smoking some of that funky weed again, aren’t you?”

No, hear me out.

Go back and look at the phone books that we all used to use before the Internet came about. In my house we used to get two books: one that was white, which had listings for people, and one that was yellow, which had listings for businesses.

Which one made AT&T tons of money? Hint: the Yellow Pages. I paid thousands of dollars a month to have our camera store advertisement in there. It generally paid off by bringing us tons of customers. After all, when you needed a camera store, or a dentist, plumber, lawyer, or a variety of other things, you’d look in the yellow pages and the one with the best looking ad got our business.

Now, let’s go back to Facebook. What’s the equivilent of the “best looking ad?” The business who has the best reviews. That’s a shift. A major one. Up to today Facebook has built the equivilent of the white pages: a site of people, but not of businesses. Soon Facebook will have tons of businesses on the social graph, but it needs to grab as much of that space as absolutely possible before others, like Twitter, get into the game.

Here’s why: if you have a bar, like my brother, how do you get a lot of Facebook’ers to come into your bar and “like” your bar?

Well, how about you advertise an offer to everyone in your local area? Hint: Facebook is NOT going to let you do that for free. How about you give all Facebook’ers the first beer for free? Think that would get a lot of Facebook users into my brother’s bar? You bet it would. Then, how do I get you to “like” my brother’s bar? Well, I’ll bribe you once again: I’ll give you a free basket of chips if you click “like” on my brother’s bar when you’re there.

“That’s bribery.”

Yeah, yeah, but this stuff goes on every day in business. You think those celebrities on TV that sponsor Nike are doing it for free? No. So why shouldn’t businesses try to pay for you to like them?

UPDATE: a few people have noted that Yelp’s TOS says you aren’t allowed to do this to get good reviews. OK, but you are allowed to ask people to review you, I’ve had that happen, and tons of restaurants around the world have Yelp stickers in the front window, which signal the same thing. And of course restaurant owners ask their friends to help give them good reviews. Heck, speeding is against the rules, but try doing 65 on FWY 280 and see how many people pass you.

Think this doesn’t matter?

Ask Christina Tan. She’s Milan (our son)’s new doctor. I took a picture of her and wrote about her here. How did Maryam (my wife) find Christina?


See, on Yelp, Christina is the top rated pediatrician in San Mateo.

“Scoble, you’re smoking that wacky weed again, Yelp is for rating restaurants.”

Not any more. Yelp is building a list of all sorts of businesses and letting its users rate them.

I asked Christina yesterday how many new patients she’s gotten thanks to Yelp. She said “several.” What’s funny is that Christina has never even been to Yelp (at least as of yesterday, she said she’s very interested in checking it out now).

So, right now, it’s easy to be accidentally “best” on Yelp right now. That won’t last. You think there won’t be a pediatrician who won’t try to figure out how to get the #1 spot away from Christina? I know there will be several. The stakes for new business are too high (restaurants are already seeing the impact of Yelp).

So, that brings us to Facebook. Yelp will help Facebook get to the real money: business recommendations.

I would not be shocked to hear soon that Facebook is in negotiations with Yelp. It makes too much sense to me. I hope Facebook eats Yelp.

What do you think?

Looking for people fanatical about the Internet (& first high res videos from my Canon)

Building 43 at Google

Rocky Barbanica and I are getting around the Valley doing research for our upcoming Building43 community (which is for people fanatical about the Internet and, more specifically, people fanatical about building the Internet). Just in the past week we’ve gotten to SmugMug, Google, Facebook, and a few other places. We’ve also met with people at tons of businesses like Zappos, Tiny Pictures, and other places.

We’re listening to what people are trying to build next on the Internet. We’re also checking out tons of new technologies that we might want to build into Building43.com (we’re aiming at a May release). Do we go with a forum from Ning, or one from friendfeed, or both? Do we go with a video widget from Kyte or YouTube or something else? Do we use 12seconds.tv or Seesmic to get you to contribute videos to Building43. Etc. Etc. We’d love your feedback here about what you’d love to see.

One thing we’re playing around with having much more of on Building43 is how-to videos, in addition to the usual interviews I do with CEOs and innovators — do you think there’s a need for that? I do, particularly as I look at most business sites and see how few are using the latest technologies. Yesterday I did one with Kevin Marks who is a developer advocate at Google for Open Social and other stuff, like Google’s FriendConnect. He showed me how to put FriendConnect onto my blog (I’m working with a separate team at Rackspace on my blog and will have the ability to do some cool new stuff soon here).

One little trick on Blip.tv that I’ve discovered is that they hide the original source file into a link. These source files are far higher resolution than the Flash versions that get played if you just visit Blip with your browser. For instance, take a look at this MPEG4 file of Kevin Marks. If it plays on your computer it is stunningly high resolution (I shot it on my Canon 5D MK II in 1080P, downsampled it in Apple’s iMovie, and uploaded it to Blip via TubeMogul. Damn, the quality looks pretty close to my original file). Thank you Blip for exposing these files in a way that we all can get to them. Here’s the high res video of SmugMug’s Don MacAskill (I shot this one on Canon’s “low res” mode of 640×480, which makes file sizes a lot smaller so I can fit more video onto one memory card. Even this video, though, took about 1 GB on my 32GB memory card in my Canon 5D MKII camera).

Anyway, this is a long way to say that if you are fanatical about building the Internet I’d like to meet with you and see what you’re doing.

In the meantime, you might check out these videos — I’m learning how to use the Canon 5D Mark II DSLR to make videos, so sorry for the clicking noises as I manually focus, Rocky’s working on fixing that for us today since these cameras let us do a new kind of video. We’re also building a live TV studio so we can join in Leo Laporte’s growing network with high quality late-night video.

Here’s Kevin Marks at Google showing you in a few minutes how to make your blog more social.

Here’s Don MacAskill, CEO of SmugMug, showing off how they are making large multi-gigapixel photos and introduces us to the first SmugMug user group.

UPDATE: People are asking me what lens and camera I used. I’m using a Canon 5D Mark II camera. Costs about $3,000. Along with a 24 F 2.8 fixed length lens (we call them “primes”). I did not use any steadying device. The microphone? It’s the one built into the camera. Nothing special. Just used automatic mode. In future I’ll do manual white balance and exposure locks and I’ll get better at focusing. Plus we’re playing around with microphones that are isolated away from the camera so you won’t hear the clicking noises as I manually focus lenses and such.

Is California setup for a brain drain?

Texas Governor

Last week I got to meet Texas Governor Rick Perry (that’s a photo of him pointing to a picture on his office wall). The first thing he told me, after saying “I just Tweeted you” is “when are you going to move to Texas?”

Two years ago I would have laughed because California was definitely the best place to do a technology business. This year, though, it’s a little tougher to laugh at that suggestion.

Here’s why:

1. My two brother-in-laws, both engineers, are laid off and looking for work. If they found work in Texas, they’d move in a heartbeat.
2. Housing prices in Silicon Valley remain ridiculous. Yeah, on my street in Half Moon Bay there’s lots of houses for sale, but prices remain far higher than they are in Texas and other places in the world and over the hill in Palo Alto prices haven’t dropped at all.
3. The pull of VC money over on Sand Hill Road is dropping fast. Last night when I visited SmugMug’s offices CEO Don MacAskill told me he just hired some people with decades of experience and said “I never expected to be able to hire such talent.” If the stars of Silicon Valley are on the street looking for work, imagine what it’s like for regular everyday engineers.

But that’s just my stories. For California as a whole I’m sensing that the whole state is primed for a major brain drain.

Why? Our state is bankrupt. What was the response? Lay off a bunch of teachers. Our education system is already in the toilet, but this will make it worse. Other states, like Texas, that aren’t bankrupt and aren’t laying off teachers, are looking more and more attractive to parents. It’s that, or spend 10s of thousands on private schools.

There’s a general feeling that crime is getting worse. That’s part a PR problem due to four Oakland police officers getting killed last week, but how will we solve those problems if we don’t have any money to hire more cops, build more prisons, etc, etc? Callers to KGO radio yesterday made it sound like the crime problem is getting worse. Rubbed into the wound is the fact that as a state we’ve decided to stop spending money on education and I predict we’ll see the problem get even worse as uneducated kids hit the job market and find no one is willing to hire them. The crime rate is about to head up big time because of this.

Finally, entrepreneurs are figuring out that they can start companies elsewhere and do just fine. A month ago I visited Tatango up in Bellingham Washington. If you can start a startup in Bellingham you can start it anywhere. I have to admit that the small town life of Bellingham has many advantages for a startup. For one, your employees are going to be more loyal. For two, they will need less pay because housing costs 1/7th to 1/12th what it does in Palo Alto. For three, the whole community is vested in helping you out (they are the only tech startup in town).

In California’s defense, it’s still going to be hard for someone like me to leave because of the ecosystem that exists here, the weather, and generally the ability to ask anyone on the street what their Twitter address is and get back more than just a blank look, but the Texas Governor made it clear he was going to come after California’s entrepreneurs and what he’s offering workers and entrepreneurs is more and more attractive every day.

Is this a problem for California? Are we about to see a major brain drain? If we don’t fix the education problem and the economy doesn’t improve here soon to keep geeks from looking elsewhere, I’d say yes. I’m off to look at moving company stats. They are usually the first place to see evidence of a brain drain as people move out of state.

Are you seeing any evidence yet? Got family/friends/coworkers who’ve moved out of state?