Why Facebook will be bigger than Google
I've been saying this for a month or two now, and been meaning to write some of my thoughts down, and last night, my close friend Mike Rosenthal pinged me asking me why I think Facebook is fun. Rather than writing back directly, I thought I'd write this post.
1. It's the only social network I've actually found a use for. The people that I know who use it regularly are people I've become closer to than I otherwise might have in its absence. When I see them, they already know what is going on in my life and I don't need to catch up with them - the conversation just moves into the more interesting stuff. Facebook's engagement numbers show this - the time spent on the site, # of pageviews per user, etc are WAY ahead of anyone else. I have a lot of fun on it tagging photos, making fun of other people in their photos, etc. Just last night my sister-in-law Nicky came home with a tan line from a band-aid on her arm. I took a cameraphone pic, and will upload it and tag it as her. Then, all of her friends will see it, and they will probably laugh about it as well. It's fun. I'll have to dig up some old photos of Mike and tag him in them so that our friends can see. Good times.
2. Everything is easy. The photo tagging is easy, it's easy to upload cameraphone pictures, you can easily record a video message and send it to a friend, you can text, you can upload your status, etc. Everything is easy. The only thing that isn't easy is email. They send you an email and expect you to come to the site to respond. They can fix that in a second if they want. Being user-centric wins. Google knows that - it's a key to their success. My Dad is on Facebook now, and we've been having a fun time with it. Cool!
3. The Platform. They figured out that if they let external companies develop new features for their site, they wouldn't have to do it. They realized that allowing those companies to monetize the FB pages would be important since it would give them an incentive to. There are already thousands of apps, and most of them suck since the platform has only been available for 2 months. There is real money to be made here. I was talking with a friend yesterday about the risk of being locked into the FB platform, and subject to the whims of FB taking you down or something. He cited Photobucket and MySpace shutting them down in the middle of acquisition talks. MySpace has no platform, no API, so everything they do is arbitrary. If Facebook starts making arbitrary acts like that, they will really hurt the liklihood of success since no one will want to build a big business inside of a place that might shut you down, like MySpace. I think FB will not suddenly change their own rules. The best FB apps exist entirely within FB. Any apps that take you outside of FB seem like they're not doing well. Personally, those annoy me and I uninstall them. Lots of companies doing this, I don't get it. The cool thing about FB apps is that you have a built-in social network, so there are LOTS of ideas which can be done which depend on having a social network already built. These apps would otherwise not exist since they would not be able to justify someone building a social network for them.
4. Monetiziation methods. FB hasn't even scratched the surface of this yet. They are doing things like putting movie promotion in the news feed, allowing laser targeted advertising (the billboards) on user pages, charging for these market research polls, etc. I heard that they are going to do $100MM in revenue this year. Google was almost out of business while they were in the early growth phase. GOOG figured out that targeted ads is where it's at. FB has got a lot of ways to monetize. Ads, gifts (still don't get that one, but it's working!), surveys, etc. TONS of money to be made.
5. Personalization. I recently realized that I might be able to get rid of MyYahoo and just put that within my FB profile. I've been using MyYahoo for at least a decade, and it's barely changed in that decade. They have a new beta out, and it's worse. I've tried Google's home page, I can't get everything I need there. I'm sure I can with FB. That said, I don't want everyone else seeing all my personal stuff - not that I'm keeping it a secret or anything per se, it's more that it's not necessarily relevant to others. It's easy to manage this - you can make any app appear only for you in your profile page. Sweet, I might actually do this.
6. Winner take all. No one wants all these social networks - they're a pain to maintain. If people are super engaged with FB, why maintain all the other ones?
7. Tons of potential. Play with it a bit, you'll see lots of areas to grow. They haven't even opened up the social graph, for instance. That is, if I find someone on there that I want to meet, it would be cool to know how I know them, like what LinkedIn does. Another thing - they could take over email. FB's messaging is nice because there is no spam since everything is authenticated. Their messaging client needs a lot of work, but lots of young people basically don't use email, they just use facebook messaging.
I could probably go on for a while longer, but I think that FB will be bigger than Google. GOOG's market cap is ~$150B today. FB thinks they are worth $10B now, and they are definitely getting $3B buyout offers. Can they increase 15x-45x in market value? Definitely! They're just getting started.
One closing thought - I'm writing this post on Blogger's interface. It will post to neumannfamily.org, then get posted to my Facebook notes. I bet that if there are any comments to it, they will be in Facebook, since I will go and tag the note with the people I have mentioned. No one looks at neumannfamily.org, they're all on Facebook.
I've been saying this for a month or two now, and been meaning to write some of my thoughts down, and last night, my close friend Mike Rosenthal pinged me asking me why I think Facebook is fun. Rather than writing back directly, I thought I'd write this post.
1. It's the only social network I've actually found a use for. The people that I know who use it regularly are people I've become closer to than I otherwise might have in its absence. When I see them, they already know what is going on in my life and I don't need to catch up with them - the conversation just moves into the more interesting stuff. Facebook's engagement numbers show this - the time spent on the site, # of pageviews per user, etc are WAY ahead of anyone else. I have a lot of fun on it tagging photos, making fun of other people in their photos, etc. Just last night my sister-in-law Nicky came home with a tan line from a band-aid on her arm. I took a cameraphone pic, and will upload it and tag it as her. Then, all of her friends will see it, and they will probably laugh about it as well. It's fun. I'll have to dig up some old photos of Mike and tag him in them so that our friends can see. Good times.
2. Everything is easy. The photo tagging is easy, it's easy to upload cameraphone pictures, you can easily record a video message and send it to a friend, you can text, you can upload your status, etc. Everything is easy. The only thing that isn't easy is email. They send you an email and expect you to come to the site to respond. They can fix that in a second if they want. Being user-centric wins. Google knows that - it's a key to their success. My Dad is on Facebook now, and we've been having a fun time with it. Cool!
3. The Platform. They figured out that if they let external companies develop new features for their site, they wouldn't have to do it. They realized that allowing those companies to monetize the FB pages would be important since it would give them an incentive to. There are already thousands of apps, and most of them suck since the platform has only been available for 2 months. There is real money to be made here. I was talking with a friend yesterday about the risk of being locked into the FB platform, and subject to the whims of FB taking you down or something. He cited Photobucket and MySpace shutting them down in the middle of acquisition talks. MySpace has no platform, no API, so everything they do is arbitrary. If Facebook starts making arbitrary acts like that, they will really hurt the liklihood of success since no one will want to build a big business inside of a place that might shut you down, like MySpace. I think FB will not suddenly change their own rules. The best FB apps exist entirely within FB. Any apps that take you outside of FB seem like they're not doing well. Personally, those annoy me and I uninstall them. Lots of companies doing this, I don't get it. The cool thing about FB apps is that you have a built-in social network, so there are LOTS of ideas which can be done which depend on having a social network already built. These apps would otherwise not exist since they would not be able to justify someone building a social network for them.
4. Monetiziation methods. FB hasn't even scratched the surface of this yet. They are doing things like putting movie promotion in the news feed, allowing laser targeted advertising (the billboards) on user pages, charging for these market research polls, etc. I heard that they are going to do $100MM in revenue this year. Google was almost out of business while they were in the early growth phase. GOOG figured out that targeted ads is where it's at. FB has got a lot of ways to monetize. Ads, gifts (still don't get that one, but it's working!), surveys, etc. TONS of money to be made.
5. Personalization. I recently realized that I might be able to get rid of MyYahoo and just put that within my FB profile. I've been using MyYahoo for at least a decade, and it's barely changed in that decade. They have a new beta out, and it's worse. I've tried Google's home page, I can't get everything I need there. I'm sure I can with FB. That said, I don't want everyone else seeing all my personal stuff - not that I'm keeping it a secret or anything per se, it's more that it's not necessarily relevant to others. It's easy to manage this - you can make any app appear only for you in your profile page. Sweet, I might actually do this.
6. Winner take all. No one wants all these social networks - they're a pain to maintain. If people are super engaged with FB, why maintain all the other ones?
7. Tons of potential. Play with it a bit, you'll see lots of areas to grow. They haven't even opened up the social graph, for instance. That is, if I find someone on there that I want to meet, it would be cool to know how I know them, like what LinkedIn does. Another thing - they could take over email. FB's messaging is nice because there is no spam since everything is authenticated. Their messaging client needs a lot of work, but lots of young people basically don't use email, they just use facebook messaging.
I could probably go on for a while longer, but I think that FB will be bigger than Google. GOOG's market cap is ~$150B today. FB thinks they are worth $10B now, and they are definitely getting $3B buyout offers. Can they increase 15x-45x in market value? Definitely! They're just getting started.
One closing thought - I'm writing this post on Blogger's interface. It will post to neumannfamily.org, then get posted to my Facebook notes. I bet that if there are any comments to it, they will be in Facebook, since I will go and tag the note with the people I have mentioned. No one looks at neumannfamily.org, they're all on Facebook.
posted by Chris at 9:14 AM
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