It started off as a dorm room joke. Then it evolved into a campus experiment before eventually tipping into a multi-billion dollar advertising juggernaut.
Does Facebook represent a new way of doing business, or are we caught up in the interactive glare of a new Fool’s Gold?
I believe Facebook as it currently exists is not sustainable. It’s meteoric rise has been impressive and inspiring, but is that due more to the fact that they were the first ones to bet heavily (and with great ambition) in the social networking space.
Google is learning from Facebook’s learnings and has been chasing them with a passion. With Google’s recently refreshed mobile app, you could even argue that Google ‘gets’ mobile better than Facebook. That’s concerning considering the present and future of digital will be predominantly mobile.
Facebook is a phenomenal personal networking tool. It’s a great way to keep up with friends. But other than automating the ease with which you can connect, what additional value are they providing customers? I can see how they are offering advertisers tremendous value. ‘Pay us and you can talk to our 900 million citizens.’ But what is the value for those 900 million? Is Facebook sustainable as an advertising sales company?
What happens when people ignore the ads? Get fed up with the intrusions? Or another social network rises to prominence by promising to be ad free?
I think Facebook will chase its tail a little bit here. From one point of view, you could claim that Facebook has become the digital equivalent of a television broadcast network. They are making broadcast space available to advertisers for a fee. Yes, there is the omnipresent ‘Like’ button to make it technically ‘two-way’ conversation. But are people begging for these ads? Do people wake up and say ‘Man, I really want to engage with some brands online today.’
If they do, then Facebook has cracked the code. If not, perhaps they are a traditional broadcast media platform in social media clothing (coding).
I think Facebook is in a great position to radically change what they do. I’m not sure if the investors will allow that to happen. But if they built some new, surprising arms to their operation, they could take their business to another level. They could leverage their massive user base to create products around the types of things that people love sharing. Music, video, and hell, even something like GIFs. But those theories are fodder for another post, or a coffee talk with the Chief Hoodied Officer himself.
Time and dollars will tell.
All I know, is when it comes to Facebook’s stock:
‘Like’ low, ‘Unlike’ high.