Integration Deal is a Win for Yahoo, Loss for Facebook

Last Updated Jun 9, 2010 3:20 PM EDT

Since it announced its Open Graph back in back in April, Facebook has become integrated into more than 100,000 websites, expanding the companies ability to monitor its users well beyond the traditional boundaries of the social networking site. But Facebook's new integration with Yahoo (YHOO) trades away too many of its core services in return for content and access it would have gotten anyway.

As my colleague Eric Sherman pointed out, Yahoo's users have been spending less time on the site each day. By contrast, Facebook's user time has been exploding, now averaging an astonishing thirty minutes a day.

The longer users stick around a site, the more attractive ad space on those pages become. Yet the integration worked out between the two companies seems designed to make users swap the time they would have spent on Facebook for Yahoo. The deal will make it possible for users to receive Facebook updates directly on their Yahoo email or homepages. As a mock-up of this integration shows, Yahoo users can now do time consuming activities, like checking friends' new photos and video, without ever leaving the site. Even worse, users will be able to post Facebook status updates from Yahoo as well.

In return, Facebook is looking to become integrated with Yahoo's content. Users will be able to easily share links from Yahoo News, still the most popular portal in the nation. And they can set up their Yahoo account to automatically publish notices to Facebook when they comment on a blog or make a trade in a fantasy league.

But all of that content would have made its way to Facebook anyway. The exact same functionality for sharing is available through the Like buttons that have been proliferating around the web. Yahoo, painfully adrift right now, would surely have scrambled to bring the Open Graph system to its pages. Facebook's strategy is to extend itself across the entire web. But it doesn't have to give away the store to get there.

Image from Flickr user Dave Fayram

  • Ben Popper

    Ben Popper writes at the intersection of culture and technology. His work has been published in the NY Times, Washington Post, Fast Company, Rolling Stone, The Atlantic and many others. He lives at www.benpopper.com.