Sean Parker’s Airtime is only the latest company to use Facebook credentials for login. If you recall, flagrant display of male genitalia ultimately lead to the fall of Chatroulette. Airtime, the next incarnation of Chatroulette, hopes to avoid the same fate by getting users to login with their Facebook accounts so as to encourage accountability. They’re in good company, with Yahoo!, Spotify and others doing the same. Then there are publishers like TechCrunch that use Facebook Connect for commenting in order to promote civil discourse.
Juxtapose this against Facebook’s IPO disaster and Paul Graham’s recent email to Y Combinator’s portfolio companies warning of an imminent soft market for startup financing (chiefly as a result of the poor performance of the Facebook IPO). Who do we believe?
First, lets separate Facebook’s IPO from the social giant’s future prospects. The IPO was a train wreck much more because of NASDAQ’s failings than due to Facebook’s lack of full disclosure to the general public. This will likely cast a shadow on future IPOs and startup financing as an unfortunate side effect. That said, here’s why I believe rumors of Facebook’s demise/slow down to be exaggerated and in fact wholly untrue.
Partners, Big and Small
There are entire companies that have based their business model on Facebook’s ecosystem – Zynga being just one. Companies, big and small, are using Facebook for website login, as the backbone of their commenting system, and as the very platform that their business model sits on. Its hard to find very many other companies that have received such a vote of confidence from so many. That said, while Facebook does enjoy the position of a natural monopoly among social networks, it is also unusually vulnerable to upstarts. And that’s why you bet on the horse instead of the cart – both Zuckerberg and Sheryl Sandberg seem to be fully aware of this, as proved by Facebook’s pre-emptive acquisition of Instagram.
Sky High Engagement
According to comScore, not only does Facebook have the largest user base of all social networks (170 million monthly active U.S. users and 900 million globally), but it also has the highest engagement when measured in time spent on site. Here’s the breakdown:
- Facebook: 405 minutes
- Pinterest/Tumblr: 89 minutes
- Twitter: 21 minutes
- LinkedIn: 17 minutes
- MySpace: 8 minutes
- Google+: 3 minutes
And that’s just desktop. Per comScore, Facebook also has a huge headstart in total mobile users. Incidentally, mobile is likely to make or break a network in the coming years.
Then there are photos. Fully 21% of all users engage with photos posted on Facebook, just behind user engagement with brand page timelines and profiles. That certainly puts Facebook acquisition of photo sharing service Lightbox into perspective.
Big, Big Data
This brings us to why there are so many comparisons of Facebook to that other behemoth, Google. Like Google, Facebook uses complicated algorithms (called EdgeRank) to determine who sees what, when. While an incredible amount of work is obviously being done behind the scenes to serve content to Facebook users, the company has only just started to plumb the depths (or scale the heights?) of how this data can be used…and shared.
Coincidentally, Salesforce’s acquisition of Buddy Media only underscores exactly how BIG a role social data will play in getting a 360 view of customers.
The world goes beyond the U.S. (yes, it’s true!). And that means that there are 5.29 international Facebook users for every U.S. user. Lets enjoy our status as top dog on Facebook because India is poised to overtake the U.S. in number of Facebook users in three short years. Take a quick gander below at some of the milestones that Facebook has enjoyed in international markets since just 2010 and you won’t be saying sayonara Facebook just yet.
Facebook just entered the mobile ad serving business as of today and this promises to be big, not just for apps but for retailers and local business. As of yet, the only form of monetization Facebook has really undertaken is ad servicing but you can bet your last dollar that this is only the beginning now that it’s a publicly traded company.
For now, Facebook has two achilles heels, if such a thing were possible. First, it continues to raise privacy concerns. Second, it has been traditionally weak in mobile implementations…but early indications are that this could be changing for the better. While Thomas Friedman compared social today to social in 2004 with the below words, he might as well have been talking about social today versus eight years from now in the future. The contrast is likely to be just as stark and Facebook for one seems determined to be part of the everyday fabric of our lives every step of the way.
Facebook didn’t exist; Twitter was a sound; the cloud was in the sky; 4G was a parking place; LinkedIn was a prison; applications were what you sent to college; and Skype for most people was a typo…” – Thomas Friedman, author of The World Is Flat