Why Facebook Connect Matters & Why It Will Win

Facebook kicked off their second annual developer conference in San Francisco this afternoon with a keynote by founder & CEO Mark Zuckerberg. The overproduced keynote, with too many words repeatedly incessantly, seemed like a lullaby sung by a nanny in a language alien to yours. There were some who compared Mark with Steve Jobs after last year’s presentation. Now, having watched the two weave their respective spells, I would say the comparison would be as exaggerated as equating the thespian abilities of Colin Ferrell with those of George Clooney.

These non-important and highly personal observations aside, I came away fairly impressed with what Mark & Company are doing with their Facebook Connect (FC) system. (The program launched today with 24 partners, and a press release. It will go into beta soon.) As a caveat, there is very little information available on how FC is going to work “technically.” Still, It seems Facebook has a much better chance of succeeding where Microsoft and othesr have failed. FC’s integration into services of partners like Digg and Six Apart makes it very clear that it is more than just a simple web ID system play.

In addition to offering a simple authentication method, FC allows granular social interactions to be embedded in non-Facebook services. If Facebook can work with its partners to build interesting use-case scenarios that go beyond simple sign-on, it is quite feasible that Facebook can out-execute Google, MySpace and everyone else with its ID ambitions.

Why? Because this is their one chance of building a monetization engine. The company makes no bones about trying to build a platform that allows it to offer branded advertising in a manner akin to Google’s Adsense. A simpler person (like yours truly) would call this a platform that serves ads for all occasions, reasons and seasons.

As I pointed out yesterday, Facebook Connect is the second iteration of the Beacon system and seems to be much less draconian and evil than the first version. Of course, it has been improved enough to become the underpinning of a highly effective advertising platform.

When you use Facebook Connect on a web service outside of Facebook, say Digg or Xobni, you are transmitting back “a little something about you” to the proverbial Facebook brain. I will use the example of the service built by Six Apart to illustrate my point.

If you visit a blog that is published using Six Apart’s Movable Type publishing system, you can leave a comment by using Facebook Connect for authentication of your ID. Your comment on a blog post can also be published to your Facebook account. This is fairly standard ID stuff.

However, it is the act of leaving a comment that is more important. You are essentially telling Facebook’s proverbial brain what topics — blogs or specific posts — with which you like to engage. In other words, you just told the system a little bit about yourself. Now imagine such information coming from dozens of Facebook Connect partners.

Each service adds a few more data points about you inside the Facebook brain, which is quite aware of your activities inside the Facebook ecosystem. The brain can then crunch all that information and build a fairly accurate image of who you are, what you like and what might interest you. With all that information at its disposal, Facebook can build a fairly large cash register.

In comparison with the Beacon system, this is almost benign. Beacon drew scorn & spit and my personal disdain, mostly because it sought to make commercial gains by compromising people’s privacy without giving them any choice. In comparison, the new system asks you to make a choice. By signing in to partner sites using the Facebook identity system, you are essentially saying yes and plugging into the Facebook brain. (I hope that Facebook and its partners learned from the mistakes of the past and make it very clear to their users how the system is going to work, and how their privacy/personal information will be used.)

At the post-keynote press confab (I skipped since I had to go see my doctor), when asked how the company will make money, Mark apparently said the company isn’t currently focused on monetization and will be looking to extend their platform’s reach. He doesn’t have to – if Facebook Connect works, the money will follow.