Key highlights from this article:

· Facebook’s defining feature was bringing real identities online: real names, real pictures, real friends.

· Facebook’s new smart lists are just like Google +’s circles – only better. Whether it’s a copy or not is irrelevant.

· These changes (along with the recent News Feed changes) will result in a shift of Facebook usage back to connections between real friends again

This guest post was written by Joe Green, the Founder and President of Causes. Causes is the largest online platform for activism and one of the original Facebook Applications. Green’s approach to building online tools is rooted in his offline experience as a grassroots political organizer for federal, state, and local campaigns. Disclosure: Green was an early advisor to Facebook and has a small amount of stock.

Facebook’s recently-launched friend lists are the most important change to the service since platform, and possibly since News Feed. With them, Facebook further jumps ahead as the truest representation of who people are and how they are connected to others. But they aren’t just helpful — Facebook really needed to launch this to maintain the integrity of its graph.

To understand why this is so important, it’s helpful to look back at Facebook’s history.

Given the virality of many of the apps on Facebook (not to mention the staggering growth of the service itself), it might come as a surprise to some just how carefully Facebook controlled its expansion in its early days. Facebook made it deliberately hard to grow, requiring a .edu email address, and not allowing users to have friends across colleges — thus making direct viral growth from existing to new communities impossible.

The service’s defining feature was real identity: real names, real pictures, real friends. In the course of growing my company, Causes, I have often been called to speak to audiences unfamiliar with Facebook. I tell them that the single most important thing about Facebook is that it made the internet real. It used to be that you went online with a pseudonym, talking to your friends in your usenet group as BobaFett12. Identity has been the holy grail of the internet since its earliest days, with huge but unsuccessful efforts undertaken by major corporations, like AOL’s Magic Carpet and Microsoft Passport. No one expected identity would come from a crowd-sourced model.

Years later, one of the most controversial moves Facebook made was going beyond college. People were worried “their Facebook” would be invaded, and that it would devolve into the Wild West seen on the rest of the web. Thankfully Facebook did a good job maintaining the integrity of the site through this transition, and it stayed (for the most part) about real names and real people.

But despite their best efforts, over time the integrity of the friend graph has become watered down. This was inevitable. Even if you have a policy of only adding people as friends that you know in real life, you inevitably keep meeting new people, but rarely unfriend people you are not in touch with anymore. So people keep getting more and more friends on Facebook, with a higher portion of them being distant acquaintances. Most of the focus in the media on this problem has been around privacy — that people do not want to share with people who are not close friends, or with their boss.

But who shouldn’t see content is only half of the problem — it’s equally as important who does see it. Having a large list of friends means that I miss a lot of content from my close friends, and if I have something important to send to them I am not sure they will see it. For example, at Causes we have a popular feature called Birthday Wish, and we often have user complaints that good friends did not donate, because they never found out about it (or maybe their friends don’t like them).

Facebook has made a few notable attempts to solve this problem. The first was Friend Lists, but they were never given much prominence, and Facebook was shy about creating them for people or putting them in a prominent position. More recently, Facebook re-launched Groups to try to solve the issue of friends communicating with each other. The new Groups were a big improvement on the earlier version, and are very useful for small groups to communicate. But because they have to be symmetrically defined, they are not useful for defining the close friends problem.

The new Smart Lists have finally hit the nail on the head. For one, Facebook has worked around the problems of automatically creating lists effectively but without creeping people out. They automatically create lists where there is objective criteria, such as school or working at the same company. For the most important list, Close Friends, they have given the list special powers such as notifying you every time those people post, and so incentivize you to use the list. They also do an eerily good job of suggesting who should be in the close friends list, making it very easy to create with a few clicks.

It is not a surprise that when Google Plus launched, that among its many features, Circles were the most discussed. But Facebook’s version is better in two critical ways. Firstly, by auto-suggesting who should be in which list, they are far easier to create. And secondly, because there is a canonical concept of a close friends list, developers can utilize this list, while to developers Google Circle names are just a string of text. Google can and should do the same thing, by getting users to organize their address book into circles, and suggesting them based on information they know from gmail and from phone usage.

The effects of these changes will be monumental for Facebook. People will share more and fundamentally different types of content, because they can target it to just their close friends. And people will check Facebook even more often, because their feed will be much more interesting. And for developers this will be revolutionary. There are a whole set of “utility applications” that will finally be possible. Over the past four years most of the apps that have spread have done so through viral channels which have rewarded high volume of communication. But with friend lists, developers can be much more targeted, and get traffic with much fewer messages and higher conversion rates, which is better for everyone. I expect to finally see Facebook platform breed a new category defining set of companies, just as they have done for games.

Source: http://techcrunch.com/2011/09/20/facebooks-smart-lists-real-friends-again/