Digg, Facebook Connect to Headline at f8Con

Updated: Now that Facebook has announced its redesign, which features a new improved news feed, what will Mark Zuckerberg, the enigmatic and somewhat shy CEO of Facebook, announce when he gets on stage at the f8 conference in San Francisco tomorrow, on July23rd? No, I don’t mean a plain ole a platform upgrade.

That is a question haunting many Silicon Valley insiders, especially since there has been a perceptible cooling of investor interest in Facebook applications that fall into the “pointless” category. What’s not helping matters is that senior Facebook executives are downplaying tomorrow’s announcement, saying this is about developers and that nothing new should be expected. Having covered Silicon Valley for a long time, I know that companies use that as a diversionary tactic. Some have speculated that it might be some sort of a payment system. Update: One of my sources tells me, however, that payments won’t be on their announcement agenda.

My sources tell me that the focus of Mark Zuckerberg’s presentation will be mostly on Facebook Connect, a web ID system. It’s essentially a system that enables application and web developers to allow web surfers to sign in to their Facebook identities. The move would highlight Facebook’s desire to become a critical part of the web infrastructure, and moving away from the just-another-social-network image.

Facebook announced Facebook Connect in May in what seemed to be a response to MySpace & Google’s moves to tout their individual web ID systems. Facebook Connect also allows companies to send status alerts back into the Facebook system where they can be displayed on Facebook’s news feed. The newly redesigned feed seems to be perfectly designed for an onslaught of such personal data. In many ways the new system would be a more palatable version of the draconian and ill-conceived Beacon advertising system.

Facebook Connect in many ways is the exact opposite approach taken by the company last year when it encouraged hundreds of developers to create applications that lived inside its silo. These applications grew at a breakneck speed and created a bubble of their own. They also put the Facebook infrastructure under extreme stress and on a cost curve that only large revenue streams can support. The inane and pointless apps cost the company a lot of bandwidth, not to mention the rising hardware costs.

By asking people to take their “identification” system, the company is hoping that others will build applications on their own infrastructure, allowing Facebook to focus on developing more high-level services and focusing their infrastructure dollars properly.

As part of the Facebook Connect announcement, expect around 20-odd companies that are using the system on their end. One of the highlights of Mark’s showcase would be Digg, which would use Facebook Connect to create a personalized home page that takes into account social news recommendations from friends on Facebook.

Digg, as you might remember, was one of the first companies to sign up for Facebook Connect. The two companies share a common investor, Greylock Ventures. This new closeness might explain why Google might be finally ready to buy the San Francisco-based Digg for $200 million. Why would Google buy instead of building their own Digg? It could help block Facebook Connect, for one.

Apart from Digg, there are a bunch of other companies that are building Facebook into their products, though many of them are actually more on the “useful” end of the application spectrum. Our sources have indicated that Facebook might out-execute their much bigger and richer rivals with Facebook Connect, and tomorrow might be the first chance the rest of the world gets a chance to get a glimpse.

Bonus link: Follow tomorrow’s event on AllFacebook.

Photo courtesy of Facebook