What does Facebook’s social graph really mean?  Single sign-on through a Facebook login, anywhere you go online, means simple access for the user and access to likeminded associated content with networked friends.  It means no longer having to keep track of multiple usernames and passwords but rather having a single login that is web-wide.  It means having a single web-wallet for processing transactions.  For the user it is all about simplifying the web.  Whew – it’s about time.

To Facebook it means control over the single most coveted thing that any advertiser – or publisher that hosts advertising could seek…identity.  For years we have talked about PII (personal identifiable information) and the separation of church and state in online advertising.  Advertisers are not allowed to have click-stream data that ties to PII.  But when users agree to adopt Facebook Connect they are agreeing to let Facebook serve as the single sign-on solution for all of their accesses to all of the web sites that they visit (which participate in Facebook Connect).  Facebook Connect blurs the line of PII and separation of church and state.  If Facebook already knows who you are and tracks the click stream data on Facebook – and now you credential them to do the same web-wide – they have been handed the holy grail.  Facebook now has access to everything you do on the web while knowing who you are and how to target you based on your demographic, psychographic and behavioral tendencies.

So what is Open Graph?  Well if Facebook kept all of this wonderful knowledge for themselves people would be screaming just like they do big brother at Google.  But Facebook is making the information available to all of the Facebook Connect partners so that all publishers who participate can access the profile characteristics of a user and adapt their content targeting according to that user’s profile in real time.  Facebook will make the entire web more relevant to user while making advertising more relevant at the same time. 

Today, Facebook is responsible for 52% of the traffic online.  More than Google.  Google is the largest search engine, but Facebook is the biggest site.  With Open Graph, Facebook will claim orders of magnitude with regard to reach as they will now manage to touch their 420 M users web-wide and not just on Facebook.

So is Facebook Connect a good thing?  It will make our experience better in many ways.  Single sign on will be positive.  Facebook wallets will make purchasing easier.  Content and advertising targeting that has heightened relevance is always better if not overly intrusive.  So if we get over the stigma of PII infiltration and the rhetoric, it all serves us well.  But when you think about Facebook being so much bigger, stronger and more influential over the web than Google is today you have to get a short sharp chill down your back.