Facebook is lucky it missed buying Twitter and now should eat Yelp

Poster inside a Facebook office

Twitter is getting a TON of hype right now. Even today, on ABC radio, I heard about a meter for your plants that tells you they need water via Twitter. Here’s a “Tweet a Watt” do-it-yourself kit that lets you build a power meter that will work with Facebook and Twitter.

Sorry, got distracted there by the hype. Remember when Facebook tried to buy Twitter and failed?

That might have been the best possible thing that would happen to Facebook (and Twitter, actually). Let’s be honest, much of Twitter’s functionality is already built into Facebook, Zuckerberg and team just need to turn on a few new features (Steve Gillmor calls them “track”) and then everyone will get why Facebook will do just fine without Twitter.

But Twitter isn’t where the real money is. Where is that?

Getting businesses onto the social graph.

“Scoble, you’re smoking some of that funky weed again, aren’t you?”

No, hear me out.

Go back and look at the phone books that we all used to use before the Internet came about. In my house we used to get two books: one that was white, which had listings for people, and one that was yellow, which had listings for businesses.

Which one made AT&T tons of money? Hint: the Yellow Pages. I paid thousands of dollars a month to have our camera store advertisement in there. It generally paid off by bringing us tons of customers. After all, when you needed a camera store, or a dentist, plumber, lawyer, or a variety of other things, you’d look in the yellow pages and the one with the best looking ad got our business.

Now, let’s go back to Facebook. What’s the equivilent of the “best looking ad?” The business who has the best reviews. That’s a shift. A major one. Up to today Facebook has built the equivilent of the white pages: a site of people, but not of businesses. Soon Facebook will have tons of businesses on the social graph, but it needs to grab as much of that space as absolutely possible before others, like Twitter, get into the game.

Here’s why: if you have a bar, like my brother, how do you get a lot of Facebook’ers to come into your bar and “like” your bar?

Well, how about you advertise an offer to everyone in your local area? Hint: Facebook is NOT going to let you do that for free. How about you give all Facebook’ers the first beer for free? Think that would get a lot of Facebook users into my brother’s bar? You bet it would. Then, how do I get you to “like” my brother’s bar? Well, I’ll bribe you once again: I’ll give you a free basket of chips if you click “like” on my brother’s bar when you’re there.

“That’s bribery.”

Yeah, yeah, but this stuff goes on every day in business. You think those celebrities on TV that sponsor Nike are doing it for free? No. So why shouldn’t businesses try to pay for you to like them?

UPDATE: a few people have noted that Yelp’s TOS says you aren’t allowed to do this to get good reviews. OK, but you are allowed to ask people to review you, I’ve had that happen, and tons of restaurants around the world have Yelp stickers in the front window, which signal the same thing. And of course restaurant owners ask their friends to help give them good reviews. Heck, speeding is against the rules, but try doing 65 on FWY 280 and see how many people pass you.

Think this doesn’t matter?

Ask Christina Tan. She’s Milan (our son)’s new doctor. I took a picture of her and wrote about her here. How did Maryam (my wife) find Christina?


See, on Yelp, Christina is the top rated pediatrician in San Mateo.

“Scoble, you’re smoking that wacky weed again, Yelp is for rating restaurants.”

Not any more. Yelp is building a list of all sorts of businesses and letting its users rate them.

I asked Christina yesterday how many new patients she’s gotten thanks to Yelp. She said “several.” What’s funny is that Christina has never even been to Yelp (at least as of yesterday, she said she’s very interested in checking it out now).

So, right now, it’s easy to be accidentally “best” on Yelp right now. That won’t last. You think there won’t be a pediatrician who won’t try to figure out how to get the #1 spot away from Christina? I know there will be several. The stakes for new business are too high (restaurants are already seeing the impact of Yelp).

So, that brings us to Facebook. Yelp will help Facebook get to the real money: business recommendations.

I would not be shocked to hear soon that Facebook is in negotiations with Yelp. It makes too much sense to me. I hope Facebook eats Yelp.

What do you think?