Tuesday, August 17, 2010

Social Plug-In Contracts and Show Me The Money

In the last few months, Facebook has been asking companies to install the Facebook "Like" button on corporate web sites and on individual articles. Facebook's "Like" button is a social plug-in and social plug-ins are all the craze right now. A social plug-in enables other users or your "online friends" to see what types of information interest you. For example, to utilize a Facebook social plug-in that is installed on a website, a Facebook user must be logged into their Facebook account. Once a Facebook user is logged into their account, they can "Like" a particular website or article on a website that has installed Facebook's social plug-in.

If a user responds to a social plug-in it enables the company who provides the social plug-in to collect data about your interaction. For example, if The Wall Street Journal installs Facebook's "Like" Button on its articles it enables Facebook to collect valuable data about The Wall Street Journal's readers. The Wall Street Journal is able to see how many Facebook users "like" an article but this data is much more valuable to Facebook than The Wall Street Journal because it enables Facebook to capture in the aggregate a tremendous amount of data about its users.

Facebook's social plug-in strategy is brilliant. Facebook is asking companies to install their social plug-in for free and it appears companies are blindly doing so because Facebook is becoming the Pied Piper of Social Media. Once a company installs Facebook's "Like" Button, Facebook is then able to collect data about a company's website users via "Like" Button usage. Facebook monetizes the "Like" Button data in what may be the holy grail of advertising.

Social plug-ins are part of Facebook's monetization strategy since Facebook is utilizing the information obtained from the usage of social plug-ins to sell advertising. If a company incorporates Facebook's social plug-ins into their website, Facebook should pay a company for utilizing this valuable real estate. A social plug-in contract may mirror in some respects a cell phone tower leasing contract since a website is a piece of virtual real estate that may have as much or more value as some pieces of real property. Therefore, if Facebook asks your company to install its social plug-in Facebook needs to show your company the money.

To learn more about social plug-in contracts and monetizing your online content you may contact me at www.shearlaw.com.

Copyright 2010 by the Law Office of Bradley S. Shear, LLC.  All rights reserved.