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ID:1032
Title:Read Write Web
URL:http://readwriteweb.com/
Category:Internet: Web Technology
Description:Web Technology news, reviews and analysis.
Slower User Growth, Timeline Complaints Won't Faze Facebook - Thu, 17 May 2012 08:03:00 -0700

The Associated Press reports that millions of people are resisting pressure to sign up forFacebook, and a new study suggests that 93% of users “hate” the relatively new Timeline - with some even threatening to quit.

But before you call your broker and cancel your order in tomorrow’s initial public offering of Facebook shares, consider this: It doesn’t matter. 

The slowing growth of user numbers and the fact that some people are holding out should not be surprising. At some point, Facebook will likely saturate all of the markets it enters, and without opening new markets like China, it will not see the rapid growth that marked its first eight years. And even as growth slows, Facebook still has about half of all Internet users signed up, and accounted fornearly one in 10 of all U.S. Internet visits last month.

The Timeline study by Attensity is more troubling at first glance. The company used its text analytics software to scan 138,572 Facebook posts about Timeline and found that 93% of them contained negative sentiment, ranging from “Timeline complaints” to the seemingly more damning “switch to another social network” and “will delete Facebook.”

Attensity did not give specific dates of when the study was conducted, saying only that the comments were analyzed over a six-week period that included March 31, when brands were required to switch over to Timeline. The study results also didn't indicate whether users made good on their threats to leave Facebook.

That’s a crucial bit of information, because in the past Facebook has waited out initial criticism of changes; users eventually adopt and even embrace them. Indeed, when Facebook first started rolling out Timeline last fall,many complainedabout the loss of features that had been the target of complaints when Facebook did a major redesign in December 2010.

And even if people do quit, chance are good they will come back; by one estimate, as many as two-thirds of people who deactivate their Facebook accounts eventually rejoin the service.

The Attensity study, the Associated Press article and, frankly, this post are all doing the same thing: Taking advantage of the big buzz around Facebook’s IPO. But everyone knows Facebook is big and will remain big for the foreseeable future. The key, and the only story that really matters at this point, is whether Facebook can find a way to change those big user numbers into big revenue numbers.



The Pros and Cons of IT Outsourcing: Globally, Nationally and Locally - Thu, 17 May 2012 07:02:00 -0700

Outsourcing is pretty muchde rigueurfor modern startups looking to conserve capital. But making outsourcing work for your startup isn’t always easy. One of the first steps is figuring outwhereto outsource.

There are a lot of choices. The first major decision is geographical. Should you outsource locally, nationally or internationally?

My company,GrowBiz Media, has outsourced Web design and development, both internationally and locally. Believe me when I tell you each comes with its own set of pros and cons.

Here’s a quick overview:

Outsourcing Internationally

When most people think of outsourcing, they envision coders in Southeast Asia working into the wee hours of (our) night. Turns out that many factors can make global outsourcing more difficult and expensive than it appears to be at first glance.

Pros:Low cost is the primary reason most companies outsource overseas. The time difference can also be a plus: You can send your changes to your team at the end of your business day, and have the code ready when you wake up the next morning.

Cons:The old adage “you get what you pay for” often holds true. Managing people thousands of miles away is difficult at best, so when calculating costs, consider that you may need to pay someone to oversee your overseas contractors. Language or cultural barriers can add to the complexity, and different time zones can cause as many problems as they solve.

Outsourcing Nationally

Outsourcing IT within the U.S. is gaining steam. Often called rural sourcing or near-sourcing, the movement is driven partly by companies’ dissatisfaction with the quality of overseas workers and partly by a desire to bring jobs back to the U.S.

TheInternational Association of Outsourcing Professionalsnamed near-sourcing one of its top trends for 2012. In places like Georgia, North Carolina and Arkansas, skilled tech workers can be found for a fraction of what you’d pay in Silicon Valley or New York, according toRural Sourcing Inc., which matches companies with workers in “second- and third-tier” cities nationwide.

Pros:Lack of cultural and language barriers make communicating with U.S. workers easier and more convenient. The time zone differential may be a slight benefit, depending on where your business and your contractors are located.

Cons:You’ll pay more for outsourcing within America than you would overseas, and if your outsourced team is across the country, meeting in person will still take time, effort and money. Be aware that some American contractors will subcontract some or all of your projects to overseas workers. This can be fine, particularly if they’re familiar with them and their work. But when this happened with one contractor we dealt with, the results were not positive.

Outsourcing Locally

After our negative experiences with outsourcing overseas, GrowBiz Media turned to a local Southern California business when it came time to rebuild ourSmallBizDaily.com website.

Pros:Face time is the major advantage of working with a local company. While most of our communication still takes place by email and conference calls, when we undertake big projects or major changes, we can meet in person to brainstorm ideas and sketch out plans. Another advantage: If you do end up hiring full-time in the future, good contractors often turn into good employees.

Cons:By outsourcing to workers in your area, you’ll have to pay the going rate - which can wipe out most of the cost benefits. As with national contractors, some local firms may outsource all or part of your work overseas.

Key Questions

Since all three options come with pros and cons, how do you decide what’s best for your situation? Consider these issues:

Timeliness:Is this a rush project that simply can’t be late? If deadlines are essential, having the team accountable and close at hand could trump all other considerations.

Complexity:A simple project that doesn’t require much direction, has some “wiggle” time built into the schedule and has a bit of room for error may be most economically handled by an overseas team.

Personality:If you don’t have a problem with a more impersonal relationship with your team, overseas contractors could be fine for you. But if you’re a people person who needs face-to-face interaction, you may want to stick with local, or perhaps national, contractors.

Image courtesy ofShutterstock.



How To Buy Facebook Stock - Thu, 17 May 2012 06:00:00 -0700

Facebook goes public tomorrow. It could be worth well over $100 billion dollars. Want to get a piece of that? It's going to be very tricky for mere mortals to get Facebook stock in the IPO. If you want shares, here's what you have to do.

  1. "First, get a ton of money. Like tons. I am talking gazillions."
     
    So says Peter Kupferberg, a principal at Chicago investment counseling firm Gofen and Glossberg. Most of the large online brokerage firms will at least take requests for Facebook shares, but they have rules. Some require existing balances of $500,000. Some will only consider people who already trade 30 times a day. Some even decide whether you're worthy on a case-by-case basis.
     
  2. "Then open a brokerage account at Goldman Sachs or Morgan Stanley, but only open the account if they promise you Facebook stock."

    Kupferberg says the deal stock goes first to the preferred customers of the banks underwriting the deal. Then it goes to the people with brokerage accounts who pass all the tests in Step 1. The scarce remainder goes to small investors to whom we wish the best of luck. If you make it that far, don't expect the current estimated share price of $40 to last long. Add scarcity of shares and stratospheric hype, stir, and you'll get what Kupferberg expects to be "a frenzy like we haven't seen in a while that will drive the price up to ridiculous levels." 

Basically, if you want Facebook IPO shares, you have to be rich and powerful in order to be taken seriously.

Is Facebook A Good Investment?

"Long, long term, this could turn out to be a very good investment," Kupferberg says. "Do you see people not using it anytime soon?"

Kupferberg says that his firm's model thinks that Facebook is still reasonably valued around $40 per share. But in the very short term, it will be almost impossible for most people to get a piece of Facebook's IPO, and those who do will pay a high price for it. We're not investment counselors at ReadWriteWeb, but if you really want a piece of the Facebook action and didn't buy one on the private market five years ago, it seems like it couldn't hurt to wait a little while for the hype to burn off.

Disclosure: Peter Kupferberg is Jon Mitchell's uncle.

Lead image viaShutterstock