• by Catharine P. Taylor , March 10, 2011

While many of you are at SXSW, I'm here in the still-chilly Northeast, removing programs from a bloated, old Dell laptop, in the hopes that at the end of the process, it will still be usable enough to satisfy the game-playing needs of a 13-year-old. 

Doing such a thing is like holding a software retrospective -- when was the last time anyone used that AOL software anyway? - which means it also serves as a reminder of how much has changed since four years ago, when I first bought this laptop that now qualifies as arthritic. Four years ago, Facebook was still primarily a plaything for the college-age-and-younger set; this week, people are wondering if it's a rival to Amazon and Netflix.

Amazon and Netflix? Why and how would a social net compete with the Web's biggest e-commerce platform and the leading on-demand delivery system for entertainment?

Yeah, things sure have changed. As you may have read, the reason Facebook is being mentioned in the same breath this week as two very different properties is that Warner Bros. announced that, starting with "The Dark Knight," it would offer movies on demand via Facebook using its virtual currency, Facebook Credits.  

But as the pundits are saying, the most important thing about this isn't that movies are being streamed over Facebook; it's that the move - which seems to have been initiated by Warner Bros. -- is another sign that whatever we think Facebook is, it's potentially much more. It's a platform for just about anything that can be delivered over digital channels, which could mean movies, or e-commerce, or gaming. It's also another sign of the transformation of Facebook from a mere social network (the use of the adjective "mere" is in jest), to an integral part of more and more.  

Let's rewrite that still-in-use slogan for cotton: If cotton is "the fabric of our lives," Facebook is the platform of our lives. 

Yes, much was written this week about, how, even though Facebook has 600 million users, it's getting ahead of the curve to consider it a rival to Netflix or Amazon. Netflix has distribution deals with a growing roster of entertainment companies to stream (or mail) thousands upon thousands of hours of video, offered on an all-you-can-eat basis for under $10/month; Amazon is, of course, the dominant e-commerce platform online, with probably thousands of retailer partners. 

But, as I said above, looking at what companies those companies do business with -- and to declare them the winners because of those relationships -- is to miss the point. What Facebook brings to the party is the growing amount of time people spend within Facebook, and the growing number of people who use it.  

This has two ramifications: first, while both Amazon and Netflix visitors can use Facebook Connect on those sites, how much time do most of us actually spend on those sites looking at what our friends are up to there, as compared with how much time we spend on Facebook doing the same thing? The power of the social graph is accentuated when it's being leveraged within the Facebook platform itself.

When users actually rent a movie on Facebook, that activity shows up in friends' news feeds. (A Warner Bros. spokesperson confirmed this for me this morning; it was not in the official release.) It's also obvious that people who rent a movie on Facebook would be more likely to, "Like" it or mention it in a status update. It's a powerful way to maximize the viral marketing that is already a core component of entertainment marketing.  

Second, such an initiative makes clear that Facebook is well down the road to being a distribution platform where consumer-facing companies have to be. I'm not among those who think corporate Web sites will disappear in the Facebook era; but I do think there's a growing expectation among consumers that not only should brands have a Facebook page, but that those pages should be a place to transact.

Of course, this is where Facebook's proprietary currency comes into play. In the long term, the company would purportedly like Facebook Credits to rival Paypal, making Facebook a rival not just to Amazon and Netflix, but eBay.  Right now, transacting in Facebook Credits is a niche activity -- unless you're really, really into Farmville. But more ways to collect and use Facebook Credits -- like, for streaming movies -- will move their use beyond the core.  

Where does it go from there? People walking around with a wallet stuffed with Facebook Credits, redeemable at merchants, worldwide? Maybe not. But maybe so.