TECH TALK: Facebook: The Vision

Fortune wrote a story on Facebook:

“Imagine that when you shopped online for a digital camera, you could see whether anyone you knew already owned it and ask them what they thought. Imagine that when you searched for a concert ticket you could learn if friends were headed to the same show.

Or that you knew which sites – or what news stories – people you trust found useful and which they disliked. Or maybe you could find out where all your friends and relatives are, right now (at least those who want to be found).”

“We want to make Facebook into something of an operating system so you can run full applications,” Zuckerberg [said]. He said Facebook is becoming a “platform,” meaning a software environment where others can create their own services, much the way anyone can write programs for Microsoft’s Windows operating system on PCs. Facebook, he explained, is a technology company, not a media one.

Today, social networking is fragmented. There are networks for dating, for philanthropy, for pet owners, for parents. But each has its own ways for members to register, describe themselves, communicate, and interact. Facebook aims to make much of that unnecessary. It will provide the underlying services – a platform – and offer access to its prerecruited pool of members. It will retain some online real estate and will still generate the lion’s share of its revenue from advertising.

Michael Parekh wrote:

If Facebook is able to even partially execute on the promise of this strategy, it could pose a long-term dilemma for the mainstream portals. Tactically, it makes a ton of sense for all of them to make sure their individual portal services are represented as applications within Facebook, thus leveraging Facebook’s networked audience.

Strategically, Facebook poses strategic risks for the major portals no less than what Google posed for Yahoo!, AOL and Microsoft back in the nineties, when they all used Google’s search engine as an outsourced service.
For smaller Web 2.0 companies, Facebook could be their best friend in the short-term. They potentially get substantial, and relatively inexpensive customer acquisition via Facebook, by making their services “applications” on Facebook’s platform.

In that sense, Facebook’s strategy is brilliant, since it makes a tail-wind out of the fact that the biggest problem facing hundreds of VC and angel-funded Web 2.0 startups, is to get massive, quick, inexpensive distribution.

Tomorrow: Looking Ahead

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Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.