By: David Port

A new generation of entrepreneurs is congregating in ‘co-working’ spaces across the country.

David Brunelle was living the dream: He’d shucked his 9-to-5 office job, liberated himself from the cubicle farm and started his own business. He was working from home, being his own boss … and before long, wallowing in freedom.

“More often than not, I’d find myself on the couch, playing Xbox at 1 in the afternoon,” says Brunelle, a Seattle web developer. “It became pretty clear that to be productive, I needed structure, I needed to set boundaries between my work and my home life, and I needed to be around other people who are serious about their work.”

Fortunately, Brunelle, who launched his web design company last November, discovered Office Nomads, a 5,000-square-foot collection of work spaces designed for people just like him: sole proprietors, freelancers, artists, consultants and other independent workers who have emerged to work and connect under the same roof.

Their search for a workplace that combines the best of a home office, an internet cafe and a traditional office has given rise to a whole new movement, with an awkward but apt name: “co-working.” It’s a dramatic U-turn in the quest for the perfect work environment–a migration back to the cubicle from the often-idealized home office, but a cubicle reimagined for a time when the line between domestic and professional life has never been more blurred.

Co-working spaces–which cost anywhere from $25 a day for occasional drop-ins to $500 or more a month–only began popping up a few years ago in places like New York and San Francisco. Now they are slowly becoming a national and international phenomenon. The potential is huge: More than 10 million Americans are self-employed, up from about 8 million in 1980. Freelance job sites are booming, too: Elance.com had postings jump 40 percent in the first half of this year, while Guru.com saw its total membership grow by 15% over the year before.

The appeal of co-working seems clear: It provides people like Brunelle a professional and social package that most alternatives can’t match. For starters, there’s the real-live-human camaraderie you can’t get from Facebook or text messaging, as well as the potential for networking and uncovering new business opportunities. A co-working office can also offer a sounding board for ideas in an informal setting. And it relieves, for the most part, the energy-sapping world of office politics–not to mention blood-draining commutes.

All that, plus a basic support system that typically includes dedicated spaces for working and for socializing, high-speed internet, a kitchenette and, naturally, some type of caffeine-dispensing appliance. Printers and fax machines could also be available. Some spaces sweeten the package with lockers, showers and yoga classes. Others offer audio-video equipment, organized social outings, consulting services–and one of the newest services: child care.

Capitalizing on the fact that co-workers may have small children in need of supervision, Cubes&Crayons in Northern California has added onsite child care at its locations in San Francisco and Mountain View. What the company calls “professional, developmentally appropriate” care for children between the ages of 3 months and 5 years is provided during regular business hours. There’s flexibility in choosing a plan–full-time, part-time or drop-in. Rates for members range from $17 an hour for occasional drop-ins to a flat fee of $600 per month for 60 hours of care. Cubes&Crayons may be the first, but it is unlikely to be the last, to start grooming the next generation of co-workers.

But for most people, what makes co-working alluring isn’t the child care or the yoga but the cooperative spirit and community vibe fostered by the people who populate those spaces.

Take Tony Bacigalupo. “I was working from home for a web consulting firm and realized I needed to be around other people and out of the house,” he explains. “The local café wasn’t great as a work environment either. Then I discovered there was already a burgeoning movement for people like me.”

Similar disenchantment with working from home prompted Andrew Luter, a private equity investor in Denver, and Susan Evans, an environmental consultant in Seattle, to turn to co-working at around the same time.

“Isolation,” Evans says, “is an inconvenient byproduct of the concept of home-office convenience.” For Luter, the problem with working from home “wasn’t just the distractions, it was the sense of physical and mental separation.”

Having met enough like-minded people to believe co-working was more than a passing fancy, Bacigalupo, Evans and Luter were soon investing in the business and helping propel the movement in their respective cities. In April 2007, Luter opened the Hive in Denver. Seven months later, Office Nomads, the brainchild of Evans and business partner Jacob Sayles, began welcoming members in the Capitol Hill neighborhood of Seattle. And a year after that, Bacigalupo opened New Work City in Manhattan’s SoHo neighborhood. Meanwhile, co-working spaces also were debuting across the country–and not just in the largest cities but in smaller urban areas and university towns with thriving populations of entrepreneurs and independent workers.

Now, less than a year after opening, New Work City hosts anywhere from 40 to 50 full- and part-time members on a given day. To be there, they can pay a $25 daily drop-in fee or $500 a month for a full-time membership, which affords them 24/7 access to the space. The Hive, meanwhile, has roughly 20 members who use its 4,000-square-foot space, paying $199 per month for 24/7 access. Brunelle is one of about 25 full-time members at Office Nomads; for $475 they get “resident” status, which comes with a dedicated desk and 24/7 access. There are also part-timers and drop-ins.

Graphic artists and business consultants, architects and publicists, authors and code-writers: As diverse and colorful as the co-working crowd is, there are unifying threads. “No one in here wants to work by themselves; everyone is here because they want to be here,” Evans says.

And, Bacigalupo adds, co-workers tend to be personable types. “The jerks rarely stick around, if they come here in the first place, and they rarely do. These are offices spaces without all the sucky parts of an office.”

He explains that people spent most of the 20th century figuring out how to go from blue-collar to white-collar jobs. “Now we’re looking for a new kind of personal workplace beyond the white-collar environment,” he says. “I think what we’re seeing now is a resurgence of interest in the possibilities of the virtual office–a healthier, more sustainable version of telecommuting.”

The variety of people working in complementary fields can make co-working spaces fertile ground for new business opportunities, too. “There’s certainly work being passed to and fro among members,” Evans says. “That is definitely a consistent theme across co-working spaces. It’s a huge benefit.”

In the end, it is camaraderie, community and connectedness that fuel this trend. “It is what members make it,” Evans says, “and they have made it pretty awesome.”

So awesome, in fact, that Brunelle says he has “no complaints and no regrets” after six months as an Office Nomads full-timer–even though it’s meant sacrificing those pajamas-and-Xbox afternoons.  

David port is a freelancer based in denver who writes on small business, and financial and energy issues.

And if business takes you on the road, there are dozens of work spaces in the U.S. and abroad that have open-door policies for co-workers from out of town. as part of a loosely structured “visa” program. This means you don’t have to hole up in a hotel room to conduct business or you can rub shoulders with co-workers in other cities, Co-working spaces in at least 17 states and 13 countries have signed on to participate in the program, which invites co-workers to drop in and work at little or no cost.

“If you’re a member of a co-working space, come on in, take a seat and work here as many days as you like,” says Susan Evans, co-founder of Office Nomads in Seattle. Terms, such as whether to call or e-mail ahead to confirm space availability, vary by organization. For an updated list of visa-friendly spaces and their requirements, check http://coworking.pbworks.com/CoworkingVisa.

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By: Seth Godin

The platform vs. the eyeballs

This might be the most subtle yet important shift that marketers face as they deal with the reality of new media. Marketers aren’t renters, now they own.

For generations, marketers were trained to buy (actually rent) eyeballs.

A media company assembled a large amount of attention. A TV network or a magazine or even a billboard company found a place you can put an ad, and they sold you a shot at reaching their audience.

You, the marketer, don’t care about the long-term value of this audience. It’s like a rental car. You want it to be clean and shiny when you get it, you want to avoid getting in trouble when you return it, but hey, it’s a rental.

And so when we buy ads, we ask, “how big an audience” and then we design an ad with our brand in mind, not with the well-being of the media company or its audience in mind. And if we get a .1% or even a 1% response rate, we celebrate.

A trade show booth is an example of eyeball thinking. The trade show organizer assembles attendees and your job at the booth is to grab as many as you can.

Old media was not the same as old branding. Media companies built audiences and then brands rented those audiences.

Suddenly the new media comes along and the rules are different. You’re not renting an audience, you’re building one. You’re not exhibiting at a trade show, you’re starting your own trade show.

If you still ask, “how much traffic is there,” or “what’s the CPM?” you’re not getting it. Are you buying momentary attention or are you investing in a long term asset?

Now, when you buy something (that thing you used to call ‘media’), you’re not paying for eyeballs, you’re paying for a platform. A platform you can use to build your own audience, one that you can nurture, educate and ultimately convert. You’ll take care of this audience differently, measure them differently and have a different sales cycle. This isn’t natural, but it works.

Two steps: buy a platform and then fill it with people. Some examples:

Authors have traditionally relied on publishers to bring them readers. The author gives up the majority of the income and the publisher brings them the readers. But then you see someone like Frank at Post Secret who builds his own audience for his (sometimes nsfw) content. He owns a platform, it’s not something he rents. Now, using a publisher is a choice, not a necessity. Just about every successful author going forward (except for the lucky exceptions like Dan Brown) will own her own media channel. Not just authors, of course…

Consider the local real estate agent. She can spend to run ads every week in the local paper, or she can use the same money to start a legitimate media channel, a digital magazine, say, one that cheers on the school and gives the local paper a run for its money. And oh yes, the only houses listed for sale are hers. It might take a lot of work and even some money. But what does she get? A platform forever.

Traditionally, a clothing brand has to give up income and control to a retailer, since the retailer has the eyeballs. The web allows a brand like Little Miss Matched to build their own platform, their own audience and thus bypass all those gatekeepers. They invested in a product that told a story instead of investing in giving Walmart a cut. Boring products can’t do this.

Or consider the local chiropractor. He can spend money on a yellow pages ad or he can invest in a platform, creating a local running club and doing coaching for its members.

(Compare these examples with McDonald’s, a company that continues to rent eyeballs for a high price and has no real platform to speak of.)

Or consider the acquisition of Omniture by Adobe. What did Adobe pay for? I’d argue it was direct access to the right people at the leading advertisers and websites around the world. Technology isn’t so hard to copy. Permission to connect is almost impossible to achieve.

Compared to the cost of renting eyeballs, buying a platform is cheap. Filling it with people eager to hear from you… that’s the expensive part. But if you don’t invest in the platform, you’ll be at a disadvantage, now and forever. The smart way to build a brand today is to invest in the elements of the platform… the product, the technology, the websites (plural) and the systems you need to make it easy for people to show up at your very own trade show. And then embrace these people and shoot for 90% conversion, not .5%.

Like most good investments, it’s expensive and worth more than it costs.

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By: Tim Ferris

Putting All the Chips on the Table?

Growing up as I did, with an early interest in business, it was almost impossible not to envy people like Gates, and even measure myself against them. Gates had placed all his chips on the table at one time and walked away richer than Croesus. And me? Well, I’d never even sat down at the table. The way I saw it, I couldn’t. I graduated from a state university with a stack of loans to repay. No sooner had I begun to dig my way out of personal debt than I met my wife (who failed to bring her own shovel). I remember her father joking with me soon after we got engaged. “Son,” he said, “I want to let you know about Lori’s dowry—you get her student loans and her bad teeth!” He laughed from deep in his chest. I moaned from the same spot. Add to that three children born within five years, and I felt like I was slogging through quicksand. If only I was in a different position, I used to think. If only I had the courage to take on more risk, like Bill Gates, like lots of others I used to list to myself. And then finally, years later, I realized that that’s not how it happened at all. William Henry Gates III was born October 28, 1955, in Seattle, Washington, to a family with a rich history in business, politics, and community service. His great-grandfather had been a state legislator and mayor, his grandfather was the vice president of a national bank, and his father was a prominent and very wealthy lawyer. Because young Bill excelled from his earliest school days, especially in science and math, his parents saw that he was enrolled in prestigious Lakeside Prep, known for its intense academic environment. This was in the late 1960s, when the world of computing was just beginning to peek over the horizon and carried a golden price tag. But no problem. To assure Lakeside’s students wouldn’t be left behind, the school held a fund-raiser and, with the proceeds, rented what it thought would be a year’s worth of time on a computer owned by General Electric. Bill Gates, his close friend Paul Allen, and a few others torpedoed that plan in a big hurry. They started hanging out in the computer room day and night, learning everything they could, even to the detriment of their other academic obligations. Within a matter of weeks, the expected year’s worth of allotted computer time was gone, but that was no problem either. The school simply struck a new deal, this one with Seattle-based Computer Center Corporation, to get additional computer time at good rates. That might have worked if young Gates and his friends hadn’t immediately started (a) hacking into CCC’s security system so they could reset the meter that tracked computer use and (b) crashing the system just for fun. They were caught, and the company banned Gates and his cohorts from its computers for several weeks. (The thought of Gates and Allen as the godfathers of a hacking subculture that has cost Microsoft and the world overall hundreds of billions of dollars does indeed boggle the mind.) But again, the exile was only temporary. CCC’s business was beginning to suffer from the system’s weak security and the frequency with which it crashed—many of the same flaws Gates and his friends had been exploiting—so the company offered the gang a deal: find the bugs and pinpoint the weaknesses in the system, and they could have unlimited use of the computer. In 1970, Computer Center Corporation ran into financial trouble that would eventually put it out of business, but by then, Gates and Allen had found a new computer home at the University of Washington, where Allen’s father worked. Lakeside also pitched in: during Gates’s junior year at the prep school, the administration offered him a job computerizing the scheduling system. Over the summer, Gates and Allen wrote the program, which coincidentally assured that Gates was assigned to classes with mostly girls—a sequence straight out of a nerd’s revenge movie. In the fall of 1973, Gates left Seattle to begin his freshman year at Harvard, part of his preprogrammed life plan. Allen, who almost certainly could have been admitted to Harvard along with his pal, chose a different route. He wanted hands-on experience, but the two remained in close contact, often discussing the potential of one day starting a company, and at the end of Gates’s first year at Harvard, Allen moved closer to Boston so they could continue to pursue the still-vague possibilities. Then, in December of Gates’s sophomore year, the vague future began to take on a more exact face. On a visit to Harvard, Allen stopped at a convenience store and noticed the current issue of Popular Electronics magazine. On the cover, under the title “World’s First Microcomputer Kit to Rival Commercial Models,” was a picture of the Altair 8800. Energized as he had never been, Allen showed the magazine to Gates, and within a few days Gates had called the maker of the computer, Micro Instrumentation Telemetry Systems (MITS), and told them that he had written a BASIC computer program that could be used on the Altair. This was a lie. Gates and Allen were just trying to gauge interest from the company. But MITS was deep in its own deception: the computer shown on the cover had not been developed yet, and even the prototype had been lost in shipping. Still, the magazine article had generated interest far exceeding expectations, so MITS asked Gates and Allen to come in and demonstrate what they were thinking. Only then did the two set out to write the code. Gates focused on programming while Allen worked on simulating how it would work on an Altair 8800, which they didn’t have. At the meeting eight weeks later, the program worked perfectly, and MITS arranged a deal to purchase the rights to Gates’s BASIC. Gates would later say that it was at this moment he knew the software market had been born. Yet, despite his growing certainty of the opportunity in front of him, Bill Gates waited another 12 months, until his junior year, to drop out of school and, with Allen, form Micro-Soft. And even then, the company might have amounted to little more than a footnote in the history of software without Bill Gates’s mother. Long active in community service in the Seattle area, Mary Maxwell Gates became the first female president of the United Way of King County and eventually chair of the executive committee of the national United Way, then one of the most influential nonprofit positions in the world. Serving on the exec committee with her back in the early seventies were, among others, John Akers, who would later become the CEO and chairman of International Business Machines (IBM), and John Opel, who preceded Akers in both positions. Mary Gates mentioned her son’s new business to Opel, who by many accounts then relayed this information to other top IBM executives. There’s no definitive record of what got said when to whom, but only a few weeks after Mary Gates got the ball rolling, IBM took a huge chance by contracting with Bill Gates’s fledgling company to develop an operating system for the company’s first personal computer. The success of both the IBM PC and the Microsoft Disc Operating System (or MS-DOS)—and the sweetheart deal that let Microsoft retain rights to its software—is what ultimately made Bill Gates the richest man on the planet.
Experience, Not Faith
So, did Bill Gates walk away from one of the world’s most coveted degrees toward an uncertain path? Well, he did ultimately make decisions from which there would be no turning back. That part of the myth is dead on. But was Gates a great risk taker? That’s a more complicated story. His family’s money and position provided cover for his youthful computing hijinks and helped assure that he would have the best education available. As for the famous Harvard dropout story, he didn’t really. Rather, he took a formal “leave of absence,” a kind of emotional umbilical cord that kept him tied to Harvard long after he had vacated the campus, just in case things didn’t work out. But by then, he had already turned the odds in his favor. After half a decade of dancing with the opportunity, beginning early in high school, he had already covered most of his downside risks. He knew, for example, that he loved the work, and the early Micro-Soft had projects in the pipeline. What’s more, Gates had validation that both he and Allen were highly competent with this new technology, and he could see that the topside potential was huge. The industry was just emerging, and his mother was in the particularly influential position of head of a United Way executive committee that also included two future CEOs of the world’s dominant computer company. As they say, it’s often not what you know but who your mother knows that can land you billion-dollar contracts. Far from being one of the world’s great risk takers, Bill Gates might more accurately be thought of as one of the world’s greatest risk mitigators. And in that, he is not alone. The simple fact is that everyone is afraid of risk at some level, including everyone I interviewed for this book. That’s a given of human nature. But the further fact is that Door No. 3 is a myth, whether we’re talking about the myth of Bill Gates or the myths that we privately tell ourselves. You don’t have to be fearless to make dramatic changes in your life. Transformative change isn’t propelled by raw courage. It’s “sparked” by a series of events that build exposure and experience, both of which help to create asymmetric risk. Through sparking, the upside opportunity is confirmed while downside risk is mitigated. Ultimately, the leap—when it comes—is not one of faith but of experience, even of comfort, just as it was for Gates. ### Interested in more behind-the-scenes stories?  Check out Leap <http://www.amazon.com/gp/product/1591842565?ie=UTF8&tag=offsitoftimfe-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=1591842565> .  It can be read in two quick sittings and will get you off your ass to do whatever it is that you aspire to do

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By: Unknown author

Medford, N.J. — Local computer expert Anthony Mongeluzo’s company grew 414.8 percent in the last three years even after the start of one of the worst recessions on record, making it the 88th fastest growing IT company in the United States, Inc. magazine announced.

Pro Computer Service (www.procomputerservice.com), which provides both onsite and remote IT support for residential and business clients, also placed as the 11th fastest growing company in Pennsylvania, New Jersey, Delaware and Maryland, according to Inc.

It placed 667 nationally, among the 5,000 finalists. Inc. magazine charts the growth of the fastest-growing privately held companies in the United States.

“This award confirmed for all of us at Pro Computer Service that working together in a culture of energy and enthusiasm could only produce great results,” says Mongeluzo, company president. “I knew the only way to greater success for my company was to empower my employees with decision making on the job and provide an exciting work environment and an employment package that is among the most comprehensive in the industry.”

Pro Computer Service experienced a 414.8 percent growth rate between 2005 and 2008. Annual revenue was $404,000 in 2005 and climbed to $2.1 million in 2009. The average industry growth rate during this three-year period was about 50 percent, and the median growth rate among the Inc. 5,000 list was about 150 percent, according to Sageworks, a research firm.

Mongeluzo credits his company’s growth to the company’s ability to show the benefits of outsourcing IT functions. “We’re able to show companies outsourcing benefits they never think about, including support by qualified personnel, a team approach that eliminates sick or vacation issues and access to wider IT experience,” he said. “At a time when companies were cutting jobs, we were adding them.”

Mongeluzo started Pro Computer Service in his parents’ home at the age of 22, in 2002. Today, he has four locations and 17 employees and operates in New Jersey, Pennsylvania, Delaware and Maryland. His company has won numerous awards for being among the fastest-growing companies in the Delaware Valley during the past two years.

“The list represents the most comprehensive look at the most important segment of the economy — America’s independent-minded entrepreneurs,” according to Inc. magazine. “Consumer electronics maker Vizio, Internet giant GoDaddy, rental car service Zipcar, and beverage maker Honest Tea are among the prominent brands featured on this year’s list.”

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For all those inspired entreprenurs out there. Amazingly creative and fascinating facts. Don´t miss it… It´s truly incredible.

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One life…. one dream and one great empire. These amazing perspectives on life should be an inspirational tool for us all. And even more so to always keep in mind when we feel we loose our way.

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By:  Maggie Overfel/ CNN Money.com

Harmonix’ founders revolutionized the gaming industry with Guitar Hero and Rock Band — but first, they nearly went broke. Repeatedly.

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By: D.C. Denison, Globe Staff

Former rapper hails use of social media platforms

There was nothing nostalgic about MC Hammer’s appearance yesterday before 100 entrepreneurs and marketing professionals who gathered at the Harvard Faculty Club in Cambridge for the Gravity Summit conference on social media marketing.

For many in the audience, Hammer, the energetic dancer and rapper whose music career peaked in the early 1990s, is more about the present than ever. With more than 1.3 million followers on Twitter, the California entertainer has been keeping a large audience up to date with the smallest details of his life, in increments of 140 characters or less.

From the time he landed in Boston Sunday night (“Wheels down!!! Boston . . . Yes!!’’) to the start of the conference, Hammer sent 14 Twitter updates, or “tweets.’’

He sent five tweets during the talks that proceeded his morning keynote address. Hammer’s tweets also appeared on his Facebook page, where his number of “fans’’ recently topped 43,000. Meanwhile, Hammer’s MySpace friends are closing in on 24,000.

There were no requests for “U Can’t Touch This’’ or “Too Legit to Quit’’ from the conference attendees, who sipped coffee in a wood-paneled, chandelier-lit room across the street from Harvard Yard. Instead, the agenda was how to make a social media splash like Hammer has done.

The daylong Gravity Summit was making its East Coast debut after three events in California: at Stanford University and the University of California at Los Angeles and at Irvine.

When he took to the podium, Hammer was short on specifics, but long on enthusiasm. He urged the audience to follow his example and “get involved’’ with services like Twitter and Facebook, even if there’s no obvious way to make money.

“I jumped in with both feet, early,’’ he said, adding that with the number of users who are now online (“250 million on Facebook!’’) there’s got to be a way to “sell those people something!’’

Hammer, who’s real name is Stanley Kirk Burrell, has not been idle since the days when his videos were in heavy rotation on MTV. He has worked as a preacher, a record producer, commercial pitchman, and serial entrepreneur. He lives in the San Francisco Bay area with his wife of 24 years and seven children. His most absorbing current project is “Hammertime,’’ a reality show about his family’s domestic life that airs on the A&E cable network.

But yesterday, Hammer made it clear that future projects will all involve social media.

“I’m both an entrepreneur and a brand,’’ he said. “Being in the center of my universe is important to me. That’s what Twitter lets me do. . . . I want to get out in front of the conversation.’’

Asked by an audience member whether all musicians should be active on Twitter, Hammer hesitated.

“I happen to know that a lot of guys who are known for their love songs don’t actually know anything about love,’’ he said, adding that tweets from these singers could backfire by revealing how clueless they are about matters of the heart.

But for a natural showman like MC Hammer, ignoring social media “is not an option’’ he said.

“Social media is all about visibility and awareness,’’ he added. “It’s a great way to add value to my brand.’’

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By: Seth Godin

If you invent or launch or market (and you’re human) it’s likely that you have the voice of the critic in the back of your head. It’s natural to fear what they’ll say, and if you’re not careful, you’ll end up redesigning your product to please them before you even launch it.

Imagine the restaurant chef who changes the interior of the restaurant to please the Michelin critic (they insist on a certain quality of cutlery in order to award a three star review). It might be your boss who is the critic. Or consider the B2B manufacturer who alters the product specs in order to meet the standards of the GAO so he can sell to the US Government…

Some critics matter. (Your biggest customer, for example). Some are merely loud. Others are just difficult.

Janet Maslin at the New York Times is a cranky hack. She reviews popular fiction and non-fiction, and as best I can tell, she likes neither very much. She’s taken authors to task for questionable copy editing and devoted entire reviews to pointless rants about trivia. Here’s the thing: she doesn’t matter. Janet’s reviews appear to have no impact at all on whether or not a book sells. Her voice is not in my head.

Robert Morris, on the other hand, is a useful guide for people in search of good books. He’s reviewed nearly 2,000 books and received almost 25,000 helpful votes for his reviews on Amazon. If he likes your book, you’re going to sell more copies–not because he liked it, but because his thorough review lets other people decide if they want to buy it or not.

The challenge is in figuring out which kind of critic is worth paying attention to as you create your product or service. In a business to business setting, pleasing the gatekeeper and the bill payer is essential. On the other hand, pleasing an angry blogger might not matter at all.

In our desire to please everyone, it’s very easy to end up being invisible or mediocre. Far better to please the right people.

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By: Douglas MacMillan

After failing to acquire Twitter last fall, Facebook went shopping for what may be the next best thing.

On Aug. 10, Facebook said it had acquired FriendFeed, the Mountain View (Calif.) social aggregation service founded by Google (GOOG) alumni Bret Taylor and Jim Norris in 2008. The deal, which The Wall Street Journal reported to be valued at nearly $50 million in cash and stock, gives Facebook top talent and advanced technology in an area many see as the next great frontier on the Web: real-time search.

The deal was seen by many as an assault on Twitter, a site that, like FriendFeed, lets users discover what people on the Web are saying about a certain topic at any given time. (Twitter turned down a $500 million offer from Facebook last November.) But experts say the pickup may be geared just as much toward a showdown with the king of Web search and the former employer of Taylor and Norris: Google. “In one fell swoop, Facebook gets to buy up Google’s best-known superstars,” says technology blogger Robert Scoble.

Pulling in Real-Time Data

FriendFeed’s founders and staff of mostly ex-Googlers earned their stripes building Google Talk, Google Maps, Gmail, and other free Web services. When they launched FriendFeed to the public in February 2008, they designed the service to help users organize their online social lives—everything from Twitter updates to pictures posted on Facebook to Netflix rentals—in one place. To help members scour through all this information, the company developed an advanced search engine that pulls in real-time data from many different sites around the Web. It lets users search keywords that only certain friends have mentioned, or only for posts that have been “liked” by a certain number of people on the site.

This search engine may be a big part of what Facebook is after. Currently the social network has a limited search engine, which only retrieves data from certain types of pages within its own site. “They could plug the [FriendFeed] search engine into Facebook and have a huge win,” Scoble says. If the site succeeds in building compelling search, more Web users may turn to Facebook for everyday searches, rather than general search engines like Google.

More effective search of current conversations and popular topics could lead to more profits for Facebook, which has taken criticism for focusing more on growth in the number of its users than in generating revenue. “Being able to get a taste of what consumers are doing on 50 different sites can be very powerful,” says David Berkowitz, director of emerging media and client strategy for digital marketing agency 360i, of FriendFeed’s search. By contrast, he says Facebook’s search tools have not been as effective for marketers.

Beefing Up Search Tools

Buying FriendFeed opens the possibility of more refined search, though Facebook has not commented on what aspects of the site will be integrated into its own. “We haven’t had the opportunity to have an in-depth, thoughtful dialogue on what to do over the long term,” says Facebook spokesman Larry Yu.

Another reminder that Facebook wants to beef up its search tools came the same day the FriendFeed deal was announced. A new tool will let users search the last 30 days of information posted by their friends. It will also let users search postings even by nonfriends, assuming those people have opted to make their material public.

In recent months, Facebook has introduced a number of features aimed at getting users to share more publicly, and the FriendFeed acquisition shows the company is committed to that goal, says Forrester Research (FORR) analyst Jeremiah Owyang. “FriendFeed is public and Facebook is not. We should expect Facebook to continue this trend to make users public,” he says. More public sharing would mean more data that’s searchable, which marketers would also appreciate.

While a battle with Google looms, Facebook’s acquisition has created a more immediate concern for the company: keeping existing users of FriendFeed from defecting to other sites. No plans to shut down the site have been announced, but many users are nervous. “If Facebook does take FriendFeed down, chances are I’ll migrate with many of the other social media and programming pundits to a similar service,” says programmer Christopher Charabaruk. “Or if there isn’t one, I’ll probably help start one.”

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