Commentary
Why Facebook Won't Fail
- by Ben Daniels , June 17, 2009
Social networking has never stood on its own. When Facebook and MySpace debuted, it wasn't the thrill of social networking that brought people to them. It really was the opportunity to connect with similar people - people in their industry, people at their college, and people with the same hobbies and interests.
Facebook never had a need to cater to these groups individually, and that remains true today. To say that it has to work as the primary front-end tool for street soccer players as well as their mothers is equivalent to saying that Google Search has to meet the specific needs of every niche group who uses it to find the things that interest them.
Instead, Facebook has been quietly at work collecting a great deal of information about us as people. The few hundred million people on Facebook must be significantly easier to archive and catalog than the billions of sites that appear on Google. Should Facebook take full advantage of its function as a repository of personal information - serving as the Google of people - it would have no difficulty finding its own niche as a sort of meta-social network.
This integration has already begun. The thing is, it's invisible on Facebook itself. Instead, it can be seen on the Google search results for "login using Facebook," which shows some 750,000 results; or the search "facebook connect," which shows nearly 37 million. The sites you can use your Facebook credentials to log on to include runner's site The Run Around, lifestyle site DurianSeed, and the site for a pair of DJ's known as the Super Mario Brothers. Virgin Airlines, too, announced plans to use Facebook Connect on its planes.
What does this mean? It means that no matter what tribe you belong to, the data that makes it work can run through Facebook. Facebook makes logging in to any site easier; it means you don't have to re-enter numbing amounts of information about yourself; it means you can more easily find the friends you already have at the niche sites you join.
Maybe this will lead to better targeted advertising. Maybe it won't. But the functionality provided as Facebook invades every tribe on the Web is undeniable. Whether it serves as a search engine, a profile repository, or something else, Facebook is sure to stick around.
People are missing the BIG point here.Facebook is filled with 300 million boring people doing a whole lot of nothing.Quite frankly,people who are into music,movies, and comedy are glad these boring people have moved on to Facebook from Myspace. When was the last time YOU bought something from an advertiser on Facebook? When the Russian money runs out Facebook is dead meat.I don't want to hear about your boring life,or that your kid is now potty trained or be friends with your mom.MySpace is far from dead,and Rupert (even though I don't care for him) will make it profitable.If you don't like the frenetic pace of Myspace,take your old boring a** to Facebook and stay there,while you can. Facebook is like the Lawrence Welk of the internet.Terminally boring.Next thing you know they'll be having polka contests and advertising Metamucil. NOONE on Facebook is BUYING anything,just 300 million window shoppers.Do you really think those 180-200 million non-American Facebook members are buying anything from the advertisers? When the advertisers realize there's no ROI (return on investment) for their advertising dollars,they'll stop advertising.Most business know you make 80% of your business from 20% of your customers.What's the click-thru rate for the people on Facebook? What are these soccer moms buying from Facebook advertisers? I rest my case.
Khalid,
I think you miss the bigger picture.
Facebook is transforming from a site to a platform.
Who cares about the ads on Facebook? If Facebook Connect is integrated on most other sites online, what if Facebook provided those sites an ad solution like AdSense, but which could target based on their social network information? That'd be pretty interesting.
I've never bought anything from AdSense either, and yet it's done pretty well for Google.
Thinking farther ahead - when they roll out Pay with Facebook, that may very well transform person to person eCommerce, as well as gain traction as a general purpose alternative payment system. The question won't be "how often are you bying a product advertised on Facebook" but instead "how often are you buying a product WITH Facebook?"
Facebook offers too much utility currently to see the user hemorrhaging MySpace is seeing, and as they build out their platform properties, I think they'll have much more intelligent revenue potentials than innocuous display ads.
I read yesterday's commentary, and today's response, and i agree with Bannister's thesis. The argument in this response, that scale of data matters more than customization, and manifest in the Google comparison, seems totally off base: Search is explicit. People customize the returns by searching within the same category with different terms: There are different returns for "soccer gear" than there are for "soccer camps" than there are for "street soccer team." Google need not customize for each group because users do it themselves. Social networking is partly explicit, but it is primarily passive and implicit: People like it because it allows them to find out about things within an interest group that they were not even looking for, by virtue of their friends pages and feeds, and through a passive view of what other people in the group are doing. There is vastly more room to customize a social, passive experience within an interest group like soccer than there is to customize search results by category. Also, what does "fail" mean? I think facebook "fails" if its valuation drops dramatically, and if niche publishers have more success than facebook does selling ads, services, and products within discrete, custom social networks. I think both of these outcomes are almost inevitable at this point. What's more, i for one think there is a distinct possibiloty that facebook goes the way of geocities, (and that the same fate awaits youtube and twitter).
The "facebook will become a platform" argument seems even less likely: It presumes two things, neither of which seem realistic at all: First, it assumes that open source efforts will not succeed in creating a standard data structure for social information that users are able to take with them to any social network, without the need for that site to be "facebook enabled." If there was ever a need and demand for an open source solution, this is it, that work is well underway, and users will strongly prefer a portable, open source data solution that is not married to any one network by name. The second assumption is that businesses large and small will accept having facebook between them and their customers, not just as a provider of a software solution, (like paypal or any one of the various eccomerce platforms), but as a BRANDED provider of that solution who collects and disseminates critical customer data as the central aspect of their business model...No way. The weight of the world is against that happening....every business on the web would choose a less capable solution from an un-conflicted provider over a great solution from a branded provider who is massive and vaguely competitive.
i would just like to applaud khalid for taking the time out of his day to define ROI on a media site.