Yesterday a post on Google’s blog announced Knol, a new service they’ve begun beta testing. While most of the ensuing blog commentary focused on the service’s similarities to wikipedia, what’s more notable are the differences.

  (click for full-size screenshot)The most obvious difference is the social-networking aspect of the service. Rather than imitating wikipedia’s obscure (though effective) community-editing process that relies on a few thousand volunteers to maintain quality, Knol looks like it’s adopting a youTube-style quality rating approach to help users surface the best content. It’s not clear whether random visitors will be able to edit articles, my guess is that the feature will exist but most authors (since their mugs are prominently featured next to the article) will lock their articles.

The other difference is the presence of ads on the pages. This is pretty obvious, since the only reason Google would want to get into something like this is to provide yet another venue where it can monetize traffic. Just think of all those millions of wikipedia pageviews with no ads, how wasteful! The inclusion of ads will be up to the author of a given page, but in order to encourage inclusion, Google will share revenue from the ads (no mention of percentages yet).

Not that different from AdSense at first glance, but the fact that they’re providing the entire content platform makes a big difference. While setting up a blog has become almost trivially easy, there are presumably many people out there who just want to write content without any management overhead whatsoever. Associated Content was one of the first to provide such an offering and have amassed millions of pages of content, though they only pay a flat $1.50 CPM rather than the pure revenue share Knol is promising. Given Google’s brand and knack for cross-promoting its tools, they’ll likely do much better, and you can be sure those pages will be well-represented in its search results.

A minor mention on the NYT tech blog has officially opened a can of worms that’s been sitting out there for years, just waiting for someone to pull the tab. The big issue - if user-generated content is the core traffic generator on social networks, why shouldn’t the users who generate it share in the ad revenues that their content earns? This strikes at the heart of Facebook’s potential revenue model even before they’ve had a chance to establish one.

The specific startup that’s in the spotlight is almost beside the point - it’s a relatively low-rent multi-offering service, the kind that bombards you with high-pressure screens trying to get you to sign up as soon as possible. The NYT says they only have 1500 users using them to display their own ads on their profile pages, and given that the majority of Facebook profiles aren’t public anymore, I couldn’t find a single one to use as a screenshot.

But Facebook (and all other social networks) have a dilemma - if this model sticks, the proliferation of users selling their own ads on their profile pages will cut into the revenue the networks themselves will be able to earn.. advertisers will likely discount the CPMs they’ll pay if their ads are surrounded by random clutter. But if the social networks try to clamp down, they’ll quickly alienate users already spooked by the Big Brother vibes they’ve been getting from efforts to “monetize” them.

Businesses started using social networks to market to consumers ages ago, it doesn’t even seem weird anymore for a corporation to have a MySpace page with tens of thousands of “friends”, and of course this year the politicians got into the act in a big way. In keeping with Facebook’s more controlled style, things started a bit more slowly - initially a lot of businesses formed Groups, and people could belong to them to show affinity, hear the latest news, etc.

Now Facebook has full-blown business pages, where companies can show off their products, announce events, etc… and they’re starting to tailor them for different kinds of businesses, so that restaurant pages have a tweaked version of the Wall app that lets people post reviews. A quick search on “restaurant” only yielded about 100 pages, but they range from Chicago sushi joints to a cocktail bar in Kazakhstan.

The goal of course is to get these businesses to buy Facebook’s new Social Ads, which despite the controversy are ideal especially for small businesses with limited budgets - think about a restaurant targeting only people who like sushi and live in a certain area. If it works well, it could be an improvement over even AdWords. But what Facebook really should do is what BlogBang is doing - let users choose and endorse the ads themselves. Rather than the slightly creepy and probably imperfect behind-the-scenes targeting, they’d be directly tapping into people’s own knowledge of one another’s interests, and picking up the power of word-of-mouth to boot.

I came across an article the other day about a french site called BlogBang, owned by Publicis. It’s set up as a community of bloggers, with just over 2200 members so far. Members get some basic social networking functions - profiles, voting for one another’s blogs etc.. but the real point of the community is to create a forum for Publicis clients to engage bloggers in some participatory marketing.

The more straightforward aspect of this is what the site calls “Diffusion” - advertisers post ads, and bloggers can pick the ones they like and put them on their sites.. they then get paid for click-throughs. So far it’s basically an ad network.. but where it gets interesting is that advertisers can also put out a “Brief” to the community, and members can create and submit their own ads. These then become available for everyone to Diffuse.

This feels more than a little bit like an open-source community, but with graphic design instead of coding as its core skillset. For marketers there’s an extra twist - not only are you getting the benefit of collective intelligence in helping you craft your messages, you’re also implicitly doing research on the perception of your brand among community members.

It remains to be seen whether these types of communities will develop the same mix of altruism and professional pride (or ego) that fuels projects like Linux or NeoOffice. It might only work well for more non-profit, socially desirable advertisers - two of the open briefs on BlogBang are a school and a fund-raising telethon.. but then again maybe not - the biggest BlogBang diffusion to date has been a campaign for Nestle.

For years now the exhibitionism of Gen-Y seems to have been boundless. It’s ironic that the place we’re finally seeing its limits is Facebook, the original home of the embarrassing drunken college photo. Seems that their latest monetization strategy went a wee bit too far, and now they’re backing off.

The lesson I’d draw from this isn’t that people have limits to what they will share online - they do, but that’s not why they’re against Facebook’s strategy. The reason Beacon backfired is that it took the control of what information is shared away from users. Posting pictures of me drunk and half-naked at a party is ok, as long as it’s done by me or a friend. For a corporation to publicize what I’m doing - a little too Big Brother for everyone.