Facebook, founded in 2004 by Harvard sophomore Mark Zuckerberg and a few classmates, was initially oriented towards college students. The basic premise was to automate the printed "facebooks" or directories used by all students. Last year Facebook opened up its network to non-students. You can join a network for your company or simply for a city or geographic area.
Recently, Facebook became an open platform, allowing applications to be created to add functionality to your Facebook page. Applications for Facebook today include a Flickr interface, a last.fm widget and Flixster, for movie reviews. Rather than simply allowing embedded scripts (in the way that a blog or MySpace permits), Facebook has provided an open API, which should enable more sophisticated applications than typical script-based widgets could support.
Facebook today has more than 21 million registered users and is the 17th most visited site in the world (according to Alexa). While that number is impressive, what's even more impressive is that more than 90% of those users are "active" users who visit Facebook at least once per month and 60% login on a daily basis. For comparison, LinkedIn reports that roughly a third of its 10 million users log on at least once per quarter. Even more compelling is that the 21 million users currently generate more than 1.5 billion page views per month. That translates to more than 2,300 page views per month per registered user. Meanwhile, more than eight million photos are uploaded to Facebook each day. Talk about sticky!!
Facebook seems well-positioned to transition from the college market to a broad and diverse user base. As more plugins are added, the service will increase its utility and provide compelling reasons for business professionals and others to join. A more diversified user base will also give Facebook greater staying power, while MySpace faces the risk of the fickle teen market falling in love with a new entry.
Today there are only a handful of business-oriented applications for Facebook, but that should change, particularly with their opening up the platform. Traditional content providers should certainly be exploring ways to integrate with the Facebook platform. To-date, the only one who's done that is Forbes, but I'd expect others to follow soon. Facebook also needs to tweak their app to recognize the needs of business users. Today, linking to friends is very school-oriented and doesn't support relationships like client-vendor, business partners, etc. Even the concept of "friend" doesn't really capture typical business relationships. Those are pretty easy changes for Facebook to make though.
It was well-reported that Yahoo last year attempted to acquire Facebook for $1 - $1.6 billion. Every few weeks the rumors of a Yahoo acquisition heat up again. But in the meantime, Facebook has demonstrated spectacular growth and a strong vision. If Yahoo does succeed with an offer, you can be sure it will be for more than $1.6 billion.
Social networking is still in its infancy and the current applications have yet to deliver strong value for the business community. But that's beginning to change. And Facebook seems well positioned to become the leader in social networking for business. And they are clearly one of the Fifty Content Companies that Matter.
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