FC NOW: The Fast Company Weblog
May 23, 2007
Why Facebook Won't Sell
That's a very strong title, I know. But it's not mine, and it's not as bad as it sounds. It was written by Paul Scrivens, an FC Expert blogger, designer, and one of the founders of blogging community 9rules, on his own blog Wisdump.
He writes:
"With the huge ad company acquisitions happening over the past couple of weeks it seems some talk has gone back to who is going to acquire Facebook. If you have read any of the articles by Mark Zuckerberg or the VCs they don’t seem to plan on cashing out through acquisition. Instead there are continued talks of bigger things for Facebook and I believe they plan on following the Amazon and eBay plan of becoming a platform."
In our previous issue, senior writer Ellen McGirt wrote in her cover story about Facebook:
Zuckerberg's answer is that he's playing a different kind of game. "I'm here to build something for the long term," he says. "Anything else is a distraction." He and his compatriots at the helm of the company--cofounder and VP of engineering Dustin Moskovitz, 22, his roommate at Harvard, and chief technology officer Adam D'Angelo, 23, whom he met in prep school--are true believers. Their faith: that the openness, collaboration, and sharing of information epitomized by social networking can make the world work better. You might think they were naive, except that they're so damn smart and have succeeded in a way most people never do. From a ragtag operation run out of sublet crash pads in Palo Alto, they now have two buildings (soon to be three) of cool gray offices and employ 200 people who enjoy competitive salaries and grown-up benefit packages--not to mention three catered meals a day with free laundry and dry cleaning thrown in. And they continue to crank out improvements to a Web site that is in every meaningful way a technological marvel.
As of April 2007, Facebook was number four in eBizMBA's monthly survey of traffic data for the top 25 largest web 2.0 sites. The three top sites were MySpace, Wikipedia, and YouTube.
Is Facebook headed down that Friendster alley, a road in which it seems there's no return? Is it just a flash in the pan? Or does Facebook have real potential for building a robust and vibrant Web company?
Posted by Lynne d Johnson at May 23, 2007 3:50 PM | Category: internet + web |
3 Comments
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The Microsoft advertising deal is a big part of it I think, because if they were to sell to Google or another "not Microsoft" company, I'm sure the penalty for the contract renege would be steep.
At last, something that will live without advertising.
Key question is barriers to entry. What would stop one of the biggies emulating or taking over Facebook? They already have the eyeballs, and in their increasingly competitive quest for eyeball attention, they may need to overrun Facebook.
If you take Facebook to its logical extreme: the online address book (or maybe even the online PIM), the revenue model is still unclear. They could either share it with an advertiser (Google, or whoever), or charge consumers, or charge co-producers (those who leverage the API and user-base). The latter creates the biggest competitive barrier, but also risks killing the business model.
There's potential for success, but whether it's sustainable or not is far from clear.