An interesting article from the techy online news magazine WIRED:
The Three Potential Causes of Facebook’s Death
By Terrence Russell October 02, 2007 | 6:59:14 PM
It’s a classic story: Search engine meets social networking site, social networking site snubs search engine, search engine claims that social networking site is a passing fad. The ridiculousness of our high school relationships is now hitting the business world as Microsoft CEO Steve Ballmer tells the Times Online that Facebook’s days are probably numbered.
Ballmer is definitely blowing hot air by projecting the possible wane in interest for the site, but he also raises a good point. Despite multi-billion valuations, the relatively young company could befall a number of unfortunate fates if it fails to play its hand correctly in the near future. We don’t have quite the axe to grind as Ballmer, but from our assessment these are the top three potential causes of Facebook’s death:
1) User Base Exodus
As ridiculous as Ballmer can be at times, he’s also probably right. Facebook’s platform may be the greatest thing since sliced bread in terms of potential, but much like social news site Digg, it’s really the user base that makes the site popular. Without the 40+ million users that serve as Facebook’s lifeblood, it’s but a shell of a service.
2) Falling Prey to a Weak Business Model
Facebook totally hit the scene at the right time, and in that providence lies the possibility of a bright and prosperous future. But after those rainbows and puppy dogs fade, we still have to view the company’s business model for what it is — murky, at best. It’s one thing to have a clear game plan to rule the market, a solid revenue stream and an inflated sense of self-worth. Its entirely different to have a questionably sustainable revenue stream, a pricey rate card, and valuation aspirations that border on hubris. For Facebook, longevity lies in a sound foundation, not hype.
3) Stunting Growth While Waiting for Valuation
Timing is of the essence, but the current investment bubble is bound to burst. By no means would we ever imply that Zuckerberg and company should sell themselves short, but it seems realistic to assume that Facebook could be seeing some big-time growth in terms of infrastructure if it had the deep pockets of Google, Yahoo, or Microsoft (ad deal withstanding). In a market where the big guns are buying start-ups left and right, it might not be a bad time to sell for the sake of the site’s growth — especially with such a high profile list of buyers already chomping at the bit. Tweaks to the platform are great and all, but expansion on a large scale has got to be in the cards if the site wants to go the distance.
Bravo…I’m in total agreement here. I have a facebook account I can tell you that it does absolutely nothing for me. Maybe because I’m older and have better things to do (like blogging 😉 ) but the only reason I originally signed up was to get in touch with other classmates for study groups and information about things happening on campus. This totally shows because I’m such a loser in Facebook because I only have 12 friends! The only time I ever use Facebook now is if I get a message from my son or one of his friends while they are away at college. Guess I just don’t see the point when there is so much more out there in the web universe.
On another note…
Remember that once you put something on Facebook, whether you delete it or not, or make your profile “private,” it is always SOMEWHERE out there in the internet world. You never know who is scouting you out…potential employers, parents, the government, and even your schools and universities. Don’t believe me? As a professor…or USATODAY…or MSNBC.