Facebook FTW

October 3, 2010

Reading this TechCrunch article and largely agreeing.

In my mind, we’ve had two recent tech waves, following which, precious few companies emerged with huge, mega success.

• Web 1.0: peak was AOL / Time Warner, big winners were Amazon, Google, eBay / PayPal.
• Web 2.0: peak was Google / YouTube, big winners are Facebook with Twitter far behind.

And so the next few years feature Facebook (and maybe Twitter) strengthening its position.

Here’s what Facebook has going for it:

• Huge brand awareness. Beyond market share, Facebook is synonymous with social networking. Even non-users have heard of it.
• Deep pockets which help in a variety of ways: the ability to purchase other companies (FriendFeed) or hire smart people.
• Zuckerberg. A powerful and scary combination of Bill Gates (can code) and Steve Jobs (egotistical) – not easily duplicated. Note that every huge tech company has an iconic leader (Bezos, Ellison, Gates, Jobs, Schmidt…).
• The walled garden. Based on the past few years, privacy concerns and “open” have generally lost to continuing ubiquity. And all that data within Facebook reduces the importance of Google’s web search.
• Way stickier than Google. I know some that are in Facebook, literally, all the time. Poking, farming, looking at their wall, figuring out people to rob; sad but true.

A few things could start a downward slide:

• Privacy concerns.
• Zuckerberg makes a naive or power-mad strategic mistake.
• Some other big company – Google – makes some really impressive social something.
• Someone can convince the millions of users that open is better than closed.

Overall, it’s pretty clear the positives dominate, and those negatives are pretty unlikely.

I think Facebook will pretty much follow that of Google ten years ago. Back then, I remember thinking Google was “just a search engine” and their IPO success was not a given – people were scratching their heads over their Dutch auction and then reluctance to split the stock. At the time, the .com collapse left many wary and expected the stock to fizzle out long-term. It also seemed entirely possible that search was merely a feature some larger company could duplicate.

Those worries proved pretty wrong. The other big companies weren’t able match Google search, and from that beachhead, Google monetized and started adding new products. It’s now seen as a direct competitor to and mentioned in the same sentences as the biggest tech companies – Microsoft, Apple, Amazon, eBay, etc.

So I’m putting a flag in the ground here – Facebook is next in line to be huge, huge, huge.

Note: this is all coming from someone who is no fan of Facebook by any means.