Commentary

Mark Zuckerberg On Facebook's Future: Not Necessarily About Advertising or Email

I spent the morning waiting for Norton to call and do the final fix on a dumb virus -- well, actually, it may be smart because it may still be here! -- that invaded my computer last night. In the meantime, I streamed Mark Zuckerberg's interview with John Battelle and Tim O'Reilly at this week's Web 2.0 Summit in San Francisco, which reminded me why so many of us want in on this technology thing, despite its lingering problems. If this virus thing is yin, the vision thing -- as outlined in this interview -- is yang. 

It was probably the best interview I've ever seen with Zuckerberg, partly because Battelle and O'Reilly ask good questions, and also because the Facebook founder seems to be getting more comfortable in his own skin -- or getting more comfortable in his own skin when he's placed in front of hundreds of adoring fans. The situation seemed to elicit a real vision for the future from him, not just of social media, but of media and commerce, so let me tell you what he said, and you can continue the discussion in comments to give your own point of view.

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The headline -- Facebook's current revenue source aside -- is that it doesn't have that much to do with advertising. In fact, the conversation turned away from advertising at just the point when it seemed like it was going straight for it; it happened when Battelle looked at where Facebook is today and saw it in just the way most of us would see it: as an ad network about to take over the world. Looking at the proliferation of Facebook Connect and "Like" buttons throughout the Web, Battelle said, "It strikes me that you're ready to distribute Facebook's business model off-domain ... and do a social-graph driven ad network." That's a pretty powerful thought when you consider that right now almost 25% of all display ads are now served within Facebook.

But Zuckerberg came back with something different. He started talking about the next five years, where he sees a transformation happening in virtually every content-driven vertical from news to movies, music to gaming (which is probably the furthest along of the ones mentioned). Not surprisingly, he sees them being rewritten around the rules of social media, and, without saying the "a" word, or even the "r" word (revenue), it's clear this is where he thinks the money-making opportunity is.

"Our view is that we should play a role in helping to reform and rethink all those industries, and we'll get value proportional to what we put in," he said. "In gaming we get some percentage of the value of those companies, largely through their transactions through buying ads and credits right now, but that's all because we're helping them. And, if we're helpful to other industries in building out what would be a good solution for e-commerce or something like that, then I think there will be some way to get value from that. But I don't think about exporting an ad system or anything like that."

Later on, when Battelle asked whether companies like Groupon or Gilt Groupe should worry about Facebook, Zuckerberg said, "No." Facebook sees its role as helping build out businesses using the social graph, not in building its own proprietary music services, crowdsourced deal platforms or anything similar. (Of course, where the line is gets difficult. You could argue that Facebook could have outsourced location to Foursquare and Gowalla, but it didn't.)

Was he big on the details of how this would create opportunity for Facebook? Other than letting the company make good on the goal we've all outlined for it -- of world domination? No. But I got the feeling he wasn't being clear because he doesn't know.

Still, it was a reminder that if we, as marketing people, think of Facebook as an advertising platform -- or a place to build a fan page for a brand -- we're looking at it too narrowly. Zuckerberg's vision is about a core, proven behavior: that people like experiences that have built-in social sauce. "They are a lot more engaging and are just more enjoyable for people to use." (Yeah, he had figures to back it up.)

So, while many of us focus on Facebook's advertising revenue -- which is estimated to come in at about $1.4 billion this year -- it could end up being a revenue stream that, while having its own merits, could be merely one that finances Facebook's future -- where other streams, that may not have even been thought of, may take precedence.

It's fitting that if you'd asked me what the column was going to be about two days ago, I would have said it was going to focus on Facebook's new non-email email. But, in the context of this interview, that suddenly seemed like a simple product announcement. Most of Zuckerberg's Web 2.0 remarks had to do with something much larger; how the social graph influences communications is only part of it.

This interview is long -- more than an hour -- but if you stream one video today, make it this one. Then comment below. Or, conversely, shoot your mouth off on what I wrote above.

4 comments about "Mark Zuckerberg On Facebook's Future: Not Necessarily About Advertising or Email".
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  1. Jon-Mikel Bailey from Wood Street, Inc., November 17, 2010 at 4:27 p.m.

    This is probably one of the first really open big picture assessment of what Facebook is and what it can be. No one knows for certain what it WILL be but it's potential future is certainly open to interpretation. To simply dismiss it as nothing more than an ad platform would be missing the point. Facebook is just part of the beginning of the new web. Great article.

  2. George Eberstadt from TurnTo, November 17, 2010 at 4:27 p.m.

    Keep an eye on "instant personalization". If you provide a consumer-facing service online, commerce or content, what would you pay for access to that?

  3. Jenny B from Natural Write, November 19, 2010 at 5:46 p.m.

    Thanks SO much for this post. It's what I have been saying for months, that we still don't really get what the big picture is turning out to be. We're still approaching online marketing and social media as if there were two separate beasts that can somehow be tamed. FaceBook may prove to be the Great Equalizer, while social media in general already has.

  4. Bruce May from Bizperity, January 5, 2011 at 8:11 p.m.

    Mark does understand that he is buildling the sidewalks of the future. He also owns the billboards on the streets but the sidewalks connect to so much more. We don't know exactly what this virutal social world is going to look like five years from now but Mark certainly sees the value of building out the landscape first and he's got all the money he needs for now. Notice how he is allowing businesses to create their own portals and let's them promote themselves for free. There is language in the Facebook terms and conditions that theoritically prohibit this but I think that an attorney put that langugae in there, not Mark. This interview confirms my view that Mark is more interested in buiding the support strucutres that the entire global villiage needs to fulfill the potential of the social graph. He who owns the village will be the biggist winner, regarless of the specific ways he finds to charge the rest of us rent. What we all need to be thinking more about is whether this is going to end up looking like a company town with a single, unelected decision maker in charge of designing the whole city and making all the rules.

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