How Microsoft got their Passport afterall

A few hundred million is a steal for your identity, they’ve got plenty of money.

Microsoft and Facebook are in partnership, but what’s at stake? Three things:

1) Facebook knows who you are: your name, your gender, where you live, your martial and political status, sexual preference, age, where you work, the list goes on. The funny thing is, you’ve voluntarily given that information up.

2) The Graph: They also know who you connect to, who you talk to, and what you say to them (you don’t own those private message ya know).

3) Gestures: Sure, up to one third of all profile information is bogus, but what about those unsaid gestures: What people do is more important than what they say. What apps you use, how frequent, what and who you click on.

Great, but why does it matter? Because the new partner likely will have access to this very precious data.

[We once rejected Microsoft’s Passport identity campaign, but we’ve potentially and unknowingly just handed it over]

Are they mining this information? With Facebook being a company of about 700 folks, it’s hard to imagine that they will. Their new advertising partner, (experienced pros) have the tools, process, and sophistication to do this.

Does Microsoft have access to all this information in day two after the deal? Not likely. But will they? Here’s a few reasons why it makes sense: Advertisers are all about margins and accuracy, the more accurate the ad, the less waste and more efficient the spend is. If Microsoft can target these ads right down to Jane in Santa Clara who is conservative and likely to buy X gidget then it could work.

How else can the data be used? For Marketers there’s a bunch of clever things they can do, if their community is in Facebook, why would you ever have them sign up for a registration form again? Just friend them or create an event page. What if you had the ability to export your network contact list via CSV?

Google still relevant?
What about Google? The killer in online advertising and search. There are millions of people using Google, and yet the Facebook audience is much smaller, and North America focused (for now). What matters is growth curves, it’s taking off near vertically.

[Google sells ads based on keywords, FaceSoft can now sell ads on something far more accurate: people]

What’s the next generation of online advertising look like?
What will these ads look like? At first, it will be the traditional forms we know, the banners, skyscrapers. Then they’ll move closer to the newspage, then the sponsored groups. The biggest untapped opportunity? Microsoft can bring the big name advertisers to the geeky kid in the garage who created that popular food throwing app. Geeky kids lack the sophistication to manage a big name advertising relationship or negotiation, but MS can.

[Don’t be surprised if the popular Food Fight App in Facebook starts to include Chicken McNuggets, Pepsi’s latest drink, and ‘the Big Meaty’ pizza from Domino]

Upside to users
Ads could become very targeted, very relational, and very social, the savvy brands will let go of the ads, and let the control move to the users. We’ll embrace them.

The takeaway

While the internet has rejected ‘forced’ identity systems from big brands, we willingfully (and often unknowingly) hand over incredibly detailed information about our precious identity. We’ve never seen an advertising system as potentially as sophisticated as this one. There’s many opportunities for the web to become more targeted, more accurate, and more relevant, but with that comes the risk of giving up some control.

Update:
Harvard’s Berkman center fellow Doc Searls has responded to this post, and gives a very user-focused perspective. He points out that Facebook’s users are not it’s customers, and that we should review the 7 rules of identity. Great to be all user-focused, there’s got to be way where all parties can work and benefit. Movements happen at the consumer level and most are sheep.