Facebook 2.0

23 05 2007

First of all, I’d like to apologize for the lack of blogging in the past month. For once, I can blame the lack of internet usage due to my hardware problems. With my hard drive failing, I had to use alternative resources to revive my laptop. Purchasing a $400 laptop hard drive was not in my budget, but paying 10% of that from a seller in Seattle was something that was…thanks eBay (shameless plug).

A lot has happened since the last time in my blog. Google purchased DoubleClick for an insane amount of money. Just when you thought that no one would one up that, Microsoft shows their muscle by purchasing the equivalent company for $6 billion. Rumors have been spreading that Microsoft is in talks with Yahoo for a possible merger/takeover. I’m not sure if this is actually true, but we’ll see. The next three months should be interesting.

But I’m not here to speak about the real big guns like Yahoo, Google, MSFT, and eBay. I’m here to talk about the young company that has defied every stereotype of a web 2.0 company and has reverted to the classical model of forging the path on its own. After Google established itself, relatively later than some of the other companies, no company has really sought to go public (successfully anyway). Facebook, however, has had a very interesting history going against analyst expectations. Let’s take a quick revisit of the history of Facebook.

It began as a frustrated student from Harvard couldn’t properly find information about another student on campus. (I felt the same way about my PH system but I didn’t think of the billion dollar idea at the time…sigh). After starting out at the IVY League schools, it began to expand schools around the nation. When facebook came to Northwestern for instance, it was the middle of midterms week. I’m pretty sure the school’s average decreased due to the productivity killer that facebook was. Zuckerberg drops out of Harvard, moves to the valley, yada yada yada, rumor to sell to Yahoo for $750 million, $1.2 Billion, but no go…the rest is history.

So what now? For a company that has done so much for its users – what more can it do? How does a young company like this stay “cool” to a demographic that gets bored with something quicker than making a TV dinner. I have a couple of ideas that not only apply to Facebook – but any new company searching for its niche.

Reinventing the wheel on the same car is not a bad thing.

Facebook tested the waters by launching Newsfeed and saw the repercussions of their actions. Essentially they learned “you don’t mess with people’s privacy settings.” That being said, you do need to do something new in order to keep users interested. Now if you poll a group of students, they would probably tell you that they hate change regarding sites. This is a case, however, where users don’t necessarily know what is best for them.  Newsfeed, for instance, was a genius way to reduce the number of page views for Facebook.  Though they were up in arms about it, once given control, it has become a way of life in browsing Facebook.

The coolest thing I’ve found about Facebook is it’s intelligent updating of Newsfeed.  If you randomly browse someones profile that you haven’t seen, their information is much more likely to pop up on your Newsfeed.  This is done to:

  • create a hierarchical structure of indexing what users want (tagging)
  • properly utilize the top 20 items on Newsfeed, proper structuring

This structuring is something that is seen very often in repeated paging of various content.  For instance, you’ll see it a lot in video games, computer graphics, and backgrounds of programs.  To see it with information is something very unique.

Entering new spaces builds your base

Facebook launched its own “marketplace” last week.  Social Networking establishes connections that are otherwise not their in eBay or Craigslist.  The comfort factor of having a relationship with someone that you are doing business with is not to be overlooked.  EBay has been successful in my opinion because there did not exist an alternative platform to do business with your friends.  That being said, I think the transactions between Facebook friends will be more of convenience versus pure business.  Nonetheless, Facebook can charge for transaction fees and advertisements for revenue sources.

Facebook also has the ability to take a bit of a myspace approach by integrating music into their profiles.  Crucial to any social networking site is the ability to give all types of information about a person.  MySpace was started as a music site to be able to launch young music careers.  Facebook has the network to fulfill this niche.

The sky is the limit

Facebook can do whatever it wants in the future.  Ultimately, it can expand further, reinvent its site every so often, but it needs to get a steady source of revenue with high growth possibilities.  Ultimately, this means clever partnerships with big companies to integrate its contact lists with software applications.  These deals will be crucial for Facebook to go “2.0.”

Just my $.02…

-SD

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One response

28 05 2007
jdash

Excellent review of Facebook’s past and present roadmap. The recent announcement of the utility platform is meant to give a growth avenue.
Keep it up.
JRD
San Jose

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