Today, Facebook unveiled the third generation of its profile page, called Timeline, which allows users to keep a historical record of everything they’ve done, as well as begin to compile a catalog of everything they’re interested in.
“Our job is to make this profile the best way to share everything you want and the best way to express who you are,” CEO Mark Zuckerberg announced at Facebook’s annual developer conference, f8, today.
Timeline is available to Facebook developers today. Other users will be able to sign up to use it, and the company will roll it out to them in the coming weeks.
The enhancements allow users to keep a scrapbook-on-steroids of their lives. But it also helps Facebook become a discovery engine for its users--for everything from music they might want to listen to, to articles they might want to read, to apps, like Nike’s run-tracker Nike+. That in turn sets the stage for explosive revenue growth, as Facebook starts working with media companies to develop ways for users not just to discover content, but also to consume--and presumably purchase--it directly on Facebook.
Zuckerberg didn’t discuss revenue at f8, but the natural conclusion is that Facebook will eventually implement revenue-sharing agreements that it currently has with games like those from FarmVille-maker Zynga, which in turn could allow the social network to build out an Apple app store-like revenue model, in which it takes a cut of every purchase. The new Timeline profile page reflects a natural evolution for Facebook along the path of fulfilling its mission--“to give people the power to share and make the world more open and connected.”
So if the past was about getting people to use the network in the first place, the next era is about enriching people’s lives, now that they are all already connected.
As Zuckerberg said: “The next era [of Facebook] is going to be defined by the apps and the depth of engagement that is now possible, now that everyone has their connections in place and this network is already established.”
Seven years ago, users had nothing but a static page to tell their friends about who they were and what they were up to. Three years ago, the company launched “News Feed,” at the time, a revolutionary change, whose status updates let users update their friends on what they were up to.
Now, the new changes allow Facebook and its media partners--Rhapsody , Spotify , Rdio, MOG, Slacker Radio on the music side, Vevo  on the music video side, Yahoo  on the reading/news end of things, and more--to automagically update information about your media consumption activities around the Internet (with your permission), thereby compiling a mini encyclopedia about you and your interests.
Timeline is a complete revamping of the profile page. Previously, it consisted mostly of a News Feed. Now it’s a complete, reverse chronology of everything a user has done in their lives. Much of it is collected as a user adds status updates, or as a new class of social apps launched today automatically log users’ activities in those apps. But users can go back and fill in past details and events, going all the way back to their birth. Users and their friends can also deep-dive into individual portions of the profile, to see comprehensive summaries of what a user is watching or listening to.
“Imagine expressing the story of your life where all the most important things of your life are called out and are right there,” Zuckerberg said. Previously, users shared this kind of information through status updates in their News Feeds. But those were ephemeral. Forget to log in to Facebook for a few days and you’d miss a large chunk of what your friends were sharing--essentially handicapping Facebook’s mission to enable friends to learn as much as possible about each other as they were willing to put out there.
The new profile offers a degree of persistence--a way for users to begin to build a personal Wikipedia page, as it were, about the things they like and enjoy and are doing.
And given the vast volume of new activity that Facebook will be tracking, it’s done away with the News Feed of old. Instead, a Ticker provides an ongoing list of everything that your friends are doing in real-time, while the main part of News Feed attempts to surface only the things you might find most interesting.
“It’s the heart of your Facebook experience, completely rethought from the ground up,” Zuckerberg said.
New: Consuming Content On Facebook
In addition to allowing users to discover more things in Facebook, the new features are allowing users to consume more things in Facebook. Instead of sending users to outside websites, the features can allow users to read, watch, or listen to content right inside of Facebook itself.
How much of this happens depends on the “canvas apps” that individual content owners, like Vevo, Spotify, and Hulu , build into Facebook. Some companies will allow you to click a link in the ticker, or on a user’s music page, and begin listening to music right within Facebook. Others, like Yahoo, for example, will send you to their own websites , to consume content there.
Facebook is also opening the door to a series of lifestyle apps, like the Nike+ run tracker or Foodspotting, which will similarly automatically log any activity a user takes in their app directly back into Facebook.
“People are going to want to express all sorts of things about their lives, and they’re going to rely on apps to help them out,” Zuckerberg said.
A year ago, at Web 2.0, Zuckerberg explained Facebook’s goals. “Over the next five years, most industries are going to get rethought to be social and designed around people,” he said. Media industries, in particular, he said, “are going to be completely re-thought.”
Facebook didn’t want to do the re-thinking for those companies, Zuckerberg explained. Instead, it wanted to be a platform that those industries could build their new social selves on top of.
“We should play a role in helping to re-form and re-think all those industries,” he said.
The new Timeline that Facebook launched today, and the new class of social apps, is the next phase of implementing that vision. Facebook becomes a platform that allows other applications to build more sharing directly into their own offerings.
And while this certainly conforms to Facebook’s mission to make the world a more open and connected place, it can also conceivably contribute mightily to Facebook’s bottom line.
Facebook executives didn’t address revenue at f8, but one only needs to take a look at Facebook’s relationship with Zynga  to imagine the potential. Just as Apple takes a portion of every app sold through its app store, Facebook takes a portion of the revenues of games that live in the Facebook ecosystem.
According to an assessment of Zynga’s pre-IPO S-1 filing by Forbes , Facebook could make as much as $400 million from the gamemaker this year alone.
And on the advertising side, the more time Facebook gets people to spend on the network, the more ads it can serve. And the more it knows about its users, the better it can help advertisers target their precise customer bases, and the more valuable those ads become.
All of which will help Facebook grow its advertising revenues even further. According to eMarketer , the social network is on track to bring in over $4 billion in revenue this year, with $3.8 billion of that from advertising. (That’s up from an estimated $2 billion in revenue last year, and and estimated $1.86 billion of it from advertising, according to eMarketer.)
What Partners Get Out Of It
The partners that have decided to join forces with Facebook, like Spotify, Hulu, and Nike , presumably hope that what Zuckerberg says is true--that adding a social dimension to their offerings will lead to more consumption.
Spotify CEO Daniel Ek told the audience at f8 that Facebook users who use Spotify today listen to more music on a weekly basis than non-Facebook users, listen to a wider variety of music, and are twice as likely to pay for music.
“In the old days, we used to go to each other’s houses and browse through each other’s record collections. Until now that hasn’t’ been possible online,” Ek said.
And while Facebook users consume more music on Spotify, Ek said, they also are twice as likely to pay for it. “Social discovery on music means we’re back to paying for music again.”
Online music video startup Vevo is also diving into the new Facebook world.
“We hope that by surfacing Vevo videos on Facebook timelines that we will be enabling a brand new and incredibly simple way for fans to discover new music through their friends’ activity,” Vevo general manager Fred Santarpia tells Fast Company. “We hope it will result in more organic traffic and engagement on Vevo.com and our mobile apps over time.”
But not everyone wants to completey immerse themselves in Facebook’s world. Yahoo is allowing Facebook to show users what their friends are reading on the Yahoo network. But if a reader wants to actually read any particular article, they’ll have to click on the link and surf on over to Yahoo’s own sites .
Rhapsody, meanwhile, is taking another tack. It’s softening its subscription rules for users discovering its music on Facebook. Any new user to Rhapsody is entitled to a 30-day free trial, but normally they have to provide a credit card to begin the trial. Facebook users who enter Rhapsody via a track shared by a friend can skip the credit card step and register instantly with their Facebook Connect credentials.
Depending on how well the social network does driving new usage, Rhapsody might consider offering other special incentives to Facebook users, company spokeswoman Jaimee Minney Steele tells Fast Company. "We're going to watch it really closely to see if we want to make any adjustments," she said.
The Privacy Debate
Facebook’s changes will doubtlessly once again stir up the debate over user privacy. By definition, the more that users post online about themselves, the less privacy they retain. And some consumer privacy advocates will certainly focus on the more powerful targetting abilities that advertisers will gain from the greater amount of information about individual users.
Facebook executives addressed this up front by saying this is simply part of the deal. The new social canvas will communicate up front to users that their activity will be shared in their Timelines. That, said Facebook CTO Bret Taylor, is so that the apps don’t have continually interrupt users to ask permission to share things and instead provide users a “frictionless” experience of using the app itself.
But it also reflects a doubling-down on Facebook’s overall philosophy. Zuckerberg famously once said that “privacy is dead,” and indeed the direction Facebook unveiled today reflects a world in which people do increasingly put more elements about themselves and what they’re doing out in a public space--or at least as public as they make it. Facebook executives noted that users would continue to retain control over who would be able to see individual elements of their Timelines.
How comfortable you feel with that probably depends on how old you are. Yahoo executive Jonathan Katzman tells Fast Company that when they tested their new social features with users--which allow friends to see which individual articles each other are reading on Yahoo--the reactions of testers split evenly along generational lines.
Older users, those over 30 or 35 years old, says Katzman, were immediately concerned about maintaining control over what was shared. But younger users, he says, were universally excited.
“This is the way they’ve grown up,” Katzman says. “This is the way they think the world works.”
Rachel Arndt contributed to this report.