Correction: "Facebook employee says Facebook has the potential...."
I think it's fairly silly. Google is profitable because people searching for things on the web are trying to find stuff. They have intent to buy/visit/signup etc.
What intent do people have on facebook? Wasting time? Playing games? Chatting to friends?
I am curious about how Facebook will manage to hold on to its users if some other more attractive social networking site opens up. We do remember what happened to Myspace and Orkut. Google could hold on to search because it was very hard for a new company to build Google kind of search infrastructure.
I'm actually thinking as younger generations come and find a new place to hangout I think Facebook can be unseated, not easily but in the same way other social networks have fizzled. Google is just a utility, and I think most people really don't care what search engine they are using, just bing and yahoo.. hasn't really given anybody a real reason to switch. Where as when it comes to social status, and hanging out where the cool kids are.. this can cause a shift very fast.
In addition, it makes more sense to put some ads for free utility service, but the same ads can be very annoying in the contexts of social communication.
Google was the first search engine that was Good Enough that leapfrogging it became impractical. Facebook may well turn out to be the first social network to get to that level. Or maybe not.
eh, I think much of google's lead is also the infrastructure, and I don't mean the servers. If you showed up at my doorstep with a giant wad of cash and said "build a better search engine" well, about 2/3rds of the people I'd want to hire to help me are already working at google.
The rest are probably working on Bing, seems like Microsoft has a really talent team there, given the relatively small inroads they have made into market share shows just how hard it is to compete.
eh, If you wanted to do this, there was a real opportunity when Yahoo announced that they were going to use bing. There were many very good, very disappointed inktomi folks at Yahoo.
I joined Facebook to experiment with the API for a real estate and social network site. I shortly had a longish list of friends, people I'd known for years, family, coworkers, baby pictures, etc. It was fun, but it was a lot of parts of my life in one place.
Most of us live compartmental lives. We're constantly separating various aspects of our lives, cultures and relationships. People, I think, form pretty cool organic amalgamations like large cities, universities, internets, etc. But planned spaces, such as malls, airports and suburbs, tend to be insipid. Facebook is the insipid mixture, IMHO.
I don't know if all social networking sites are equally doomed, but I think it's about the next thing and not necessarily the "next best thing."
Since people don't use friend lists, I believe Facebook will one day offer an auto-compartmentalize feature where it will intelligently build groups for you like talked about here:
I don't know about you, but I never had a real-life friend on Myspace or Orkut, while now a lot of them are on FB, even non-geeks. That's the fundamental difference. To unsettle FB, something completely new and much better would need to be invented, surely not something on the level of Myspace or Orkut.
If a company manages scale at a pace threatening for Facebook and promises to handle the infrastructure accordingly, Facebook can suggest they become compatible using shared ideas of identity, relation, authorisation and activity streams. The two first are elementary (for Facebook) and there are protocols being agreed upon for the two last, with Facebook (David Recordon)'s participation.
The guarantee to have a significant share of the market should convince either. Two distinct services cater distinct preferences across ties, optimally for both. The two should be prouder of their ability to suggest, develop and cater features enough to expect to beat the other team with time, rather than gambit compatibility.
This was not possible with MySpace because they disagreed on identity and relations; Orkut never was threat enough to deserve such a defensive move.
Negotiations on who gets what information to target the ads will be slightly more tense than getting on the last row-boat from the Titanic, but at least one side has a CEO & a COO who have already proven they can handle that.
Don't overlook Facebook's advantage of universal popularity. Everybody uses Facebook because everybody is on Facebook. That's a tough barrier for any new player to surmount.
Universal popularity isn't necessarily that useful. It really just matters that everyone you know is using it.
Just as Facebook used the collegiate social scene to grow, I think theres a lot of potential for a competitor to take a similar route. Find a relatively self-contained community and attack it. It wouldn't surprise me in the least if a Facebook killer eventually emerges from the university system just as Facebook did.
This is true, but it could work against the next gen. After all, who wants to be on the same network as their folks? That could make it uncool enough for other to look elsewhere.
Now, that is what killed friendster, so I'm not saying it'd be easy. but computers are getting so cheap so fast that the longer you wait, the easier that will be. Unless facebook can double in compute complexity every two years, this barrier will fade with time.
Stock valuations are pretty crummy anyways. They are only an indicator of potential earnings (that's why a stock can go down when earnings are good: the forecast was bad).
No, that doesn't prove the article. Any company has the potential to be "worth" more than <x company>. It's a moot point.
Enron looked great on paper. It was worth nothing. Bernie Madoff looked great on paper. He was worth nothing. Facebook looks great on paper, but in reality they are just hitting profitability. We'll see how long they last.
Actual cash flows are worth more than potential cash flows. Realistically you need to sum the probably of profit discounted by your risk tolerance. A dollar is actually going to be worth a little less in the future, but it’s extremely likely to be worth something. Gold value is a little more random but it’s slightly less likely to be worth nothing. All the way out to lottery ticks which are worth more as entertainment than their inherent cash value.
That is a valid question. I don't know if there is a better way. I was pointing out the flaws in what has proved to be an otherwise very good system.
In reality, privately held companies are very hard to gauge in raw worth. When (and if) Facebook has an IPO, we will get a better idea what the broad market values it at, instead of what individuals very close to the company value it at.
Maybe. The value attached to looking at friends' photos isn't nearly as high as that of finding solutions to just about every problem you'll encounter in your job.
Ask yourself this: if you had to work for a year without Google or Facebook, which would you choose to give up? One provides answers for me daily. The other I visit far less than HN. One is active - I'm searching. The other is passive - I'm being amused. In the former, I'm more likely to be convinced to spend money. The latter...well, I haven't spent a cent yet.
Everybody and their grandma are already on Facebook.
Recently I noticed, that all the (non-tech) people with netbooks on train - mostly use Facebook.
You can hear word "facebook" every hour on mass media and even in TV advertisement. Hell some TV ads even talk about FarmVille.
I doubt Facebook has a lot more growth ahead of it.
For me twitter has much more value, than Facebook. My only use for Facebook is to check for various events in my area, for which I even don't need to login into the fb website, since they spamming me with email so frequently.
Facebook is an entertainment company. They compete with TV networks for eyeballs. If somebody spend more hours per day on facebook - they spend less hours per day watching TV.
Or do you know of any plans of Facebook to diversify into non-entertainment business?
I for one don't understand, why they don't have fmail (Facebook Mail)? Providing free email was the first thing that any successful Internet company before them did (i.e. Yahoo, MSN, Google).
New mediums can be used to break FB proprietary APIs, same way as Apple used mobile to promote HTML5 over Flash.
Android and TV can be used to create and promote Open standards.
They're an entertainment company, yes, but they are hugely more available than TV. It's not generally true that hours spent on Facebook replace TV-watching, because TV isn't generally watchable in all the situations Facebook is. That spare 5 minutes to half-hour in the office can be filled by Facebook, for instance, where TV simply isn't practical.
Also so far Facebook has become profitable from gaining a very small amount of revenue from each user. They have a total user attention for much longer over the user base now than Google do, the trick is just monetising this attention.
Facebook will be worth more than Google because Facebook has solved the chicken and egg problem. In order to leave Facebook for a same or better experience, I need all my friends to move as well. However, I could switch to Bing tomorrow and not need anything/anyone else to move with me for a better experience.
Neither of those platforms had extensive application support for their external user account login (facebook connect). Furthermore, they did not have the social graph integration with other sites for features like instant personalization. Not to mention a user base of over 500 million people. They are apples and oranges, both fruits but different kinds.
Also, I have a relatively large family, many of whom are on Facebook. A year ago they were trying to use Facebook for family notices and communication. These days they've gone back to email. Everyone has email, but not everyone is on Facebook, not even among those who have already joined at one point.
As long as you can only do facebooking via Facebook, there will be people who aren't connected to it.
She's your mother - I mean, I guess you really don't have to friend her? but it seems pretty rude to me. I didn't mind friending my mom. the problem that I hit was that facebook broke the compartmentalization between my mother and my stepmother. I love them both, but, uh, let's not mention one in the other's presence, you know?
I mean, if facebook was providing me something meaningful I would have found a way to deal with it. But as it was I was mostly leaving my wall questions and my facebook mail unanswered; It really was better, I think, to leave rather than have people expect me to answer questions and then have those questions drowned out by mafiafarmcow updates and pictures of cute cats. (I know, you can filter some of the crap... but you know what? I already know how to use procmail. I already have a 200+ message a day email inbox, I don't need another.)
So the thing with my mom(s) was sort of the last straw. Everyone has my email; I went from mostly ignoring my facebook to deactivating it.
yes, but they entered the market at a point in time when the masses were not ready for social media. Myspace was for kids, friendster was for early adopters.
Eh... I don't know. I think there is actually a disadvantage to everyone being on the network. I left facebook when both my mother and my stepmother joined. I don't think I'm alone in this need to compartmentalize my personal life in ways that facebook doesn't support.
Now, my professional life, well, I'm on linkedin, and I like it quite a lot. But facebook has lost it's compartmentalization, and I think that's bad. It used to be just for college kids, which is a great niche, everyone else wants to be in the same place as the cool college kids. But if mom starts showing up at the local watering hole, I think the kids are going to find a new place to hang out.
The thing about linkedin is that yeah, I want to compartmentalize my professional life to some extent... but it's one way compartmentalization. I mean, while I don't really want all of my personal life to bleed into my professional life, I mean, my business partners and customers don't need to read about my relationship problems. Not that I'm ashamed of my personal life or anything; it's just unprofessional, and I think impolite to shove that in their faces. But the other way around is fine; I'm okay with casual friends reading up on what I do at work.
Really, the compartmentalization of my private life is very complex, and I'm not a very private person.
Just my opinion; I'm clearly not an expert at this sort of thing.
I'm in my 30s. My social group is mainly urban and mobile. It certainly seemed that vast majority of people around my age were on MySpace, and I say this as someone who never actually joined it with a real account. Incidentally, the same people who used MySpace heavily are the ones whose posts fill up my Facebook wall. In fact, most of those people were also on friendster.
I agree. I see Google overall lost its "irreplaceable" status. They had it about 5 years ago when their search was clearly the best, and it would be difficult to live without Google. But now, if Google suddenly disappeared tomorrow, we would adapt pretty quickly.
Moreover, organic search itself lost some of the significance. While still important, we can search for new things in Twitter, Facebook, aggregate sites like Techmeme, or go to primary sources directly.
Homer constantly refers to 'swift-footed Achilles'; and you can't google Bjarne Stroustrup and not see 'creator of C++'; we may be stuck with Gmail creator Paul Bucheit. Makes the name easier to digest on casual mention, or something.
I don't mind the reference, but it seems like the title is often just "Gmail Creator" and not a mention of his name until the end of the first or second paragraph.
Google controls the internet, they're the gatekeepers of pretty much all traffic. Their algorithms determine who receives traffic and who doesn't. You can get your business attention by paying Google for the privilege. Facebook has no such ability yet. Search advertising just works much, much better than display ads.
That said, they do have a lot of users and a lot of explicit data about their users, and they could use that to bootstrap FB into something else. But until they figure that out, it's all just potential.
Except it takes 1 second to just switch to another Search Engine and I'm on my way again. So while they are one of the biggest 'gatekeepers' now, they still have to keep people happy or they'll leave in a hurry. Facebook? Not so much. People are stuck there and Facebook loves it.
I think the real potential FB has is not in ads at all, but in credits. If they can evolve that into a real alternative to PayPal that works on- and offline, it will be huge.
In that answer he links to an article which ends on an important point that the author of the submitted TC article seems to ignore:
Of course there's no guarantee that Facebook will actually realize any of this potential -- there were many search engines before Google, and they all fumbled the opportunity they had, but it's important to at least understand the potential for big things.
What keeps bothering me is - why nobody sees the danger Google represents to Facebook.
I mean if Google wanted to - they could IMHO mow down Facebook. They have waaaay more personal information about all the Facebook users that are also Google users (I believe that is majority of Facebook users), which would enable them to leverage that information and create a much better user experience.
If they could really put their mind to it that is. Unfortunately Google cannot seem to manage that kind of focus - beyond adwords that is. And forget Buzz - that was a miserable failure and probably even wasn't ever meant to be anything beyond Proof Of Concept.
However Google just might be working on a FB killer as we speak. In my oppinion Google has better infrastructure, more resources and is in a position to really give FB a run for it's money.
maybe? facebook has the info you want to share with (some) other people. Google knows what weird porn you like.
My point is that facebook only knows things about you that you choose to share with other people. Google, potentially, knows much more. That, and it is possible that your searches paint a more truthful picture of what you are actually interested in than what you put on your facebook profile for consumption by family and/or potential dates.
Facebook also knows what websites you go to now. They have all of the log data from serving almost ubiquitous like buttons & "popular on facebook" components now.
I think you are missing the key to "mowing down" Facebook which Google can't conquer with a technical solution: convincing hundreds of millions of people, many of them barely computer-savvy, to switch their routines from Facebook to the Google Social Network.
In my view there is no doubt that Facebook will one day be worth more than Google.
Facebook is stickier, it's users spend multiples of more time on there than any Google site, their user base will undoubtedly break a billion at some point and the level of competitioin is too fragmented and scattered to mount a significant assault. In other words, the eco system they have created will sustain their lead for many, many years.
Just as Google has become the defacto search engine to the world, Facebook is rapidly becomming the defacto social network to the world. Alternatives will always come up, but we cant compare facebook to Myspace. On myspace, people used persona's but Facebook is real. People eventually grow out of their myspace profile but you dont grow out of your facebook profile because its you.
My brother is a very heavy Facebook user but he's still logged in to Gmail almost 18 hours a day. I'd say he spends about equal amounts of time on each.
First, we have the Gmail/FF founder saying that FB could be worth more than Google. I guess that's something one can have a discussion about.
Second, then we have this tangential point about how the shares he received for FF will be worth more than they were originally. No shit.
It states that when Friendfeed was acquired they received $30M is Facebook stock. FB valuation is skyrocketing. But that doesn't mean, as the blog post implies, that the FF valuation is also rising. In other words, if FB were buying FF today, they'd be getting less stock for the same price of $30M.
Third, to make the post even more noisy, he brings in the Q&A site Quora, where he heard all this.
People would have to Like the relevant blog post to provide feedback, or Like any of the latest batch of "I hate the new Facebook design" groups that would arise.
I doubt it. Maybe facebook will be worth more on paper, for a short period of time but Google provides a far far more valuable service and I think that will show in the end.
In my point of view, Google is king in valuable information (just like knowledge or things you're interested in, that you always want more and more) and Facebook is king in social information (what you're not always interested in but you usually feel sorry when missing it). It's hard to say what kind of information is more important just like it;s hard to say wether Google or Facebook is worth more than the other.
Yes, true. But, I think, social networking websites was born just due to lacking of social interaction (among real relationships) on web while people was spending more and more time on it for searching valuable information. Facebook just brings social information in real life on web and make social interaction much easier (although I think it only keeps us further away from real life).
There are two large advertising buckets: direct response (pay for performance) and display. Today, the online advertising market is about 25B of which 16B is direct response and the remainder is display (loosely speaking). Facebook may not win a larger share of direct response dollars, but they may enable branding dollars to move online.
Many are calling for the shift of offline brand dollars to move online. In the offline world, display advertising is much, much larger than direct response. The TV ad market is $70B alone annually, not counting radio, print and so on.
Because of its scale, Facebook can present a one-stop shop to many advertising agencies looking to shift spend from previously mass market TV to new media. Should this happen, a potentially equally large chunk of ad dollars may end up in Facebook's coffers because like Yahoo, Facebook can provide the following
(1) A huge audience: largest photo & gaming, and 2nd largest video site on the web with the most amount of minutes of any website
(2) A gargantuan amount of consistently high quality ad inventory (16% of all display inventory according to eMarketer)
(3) Best in class user targeting and demographic understanding
(4) Multiplatform (gaming, photos, etc) and multi-environment (web, mobile, off-Facebook web) targeting
(5) Consistent reporting across all these media
Facebook quadrupled (http://gigaom.com/2010/06/02/facebook-advertisers-have-quadr...) the number of advertisers on their platform last year, my guess is entirely due to SMBs moving to the platform. With the the rise of GroupOn (the fastest growing business in the world according to Fortune), the addressability of SMBs and their enormous advertising spend moving online, Facebook's 150MM mobile users coupled to great demographic data might very well be another huge pot of gold.
If Facebook can capture even 5-10% of either market, they would be generating between $6-10B annually at a huge CAGR which you could argue the public markets might value at crazy P/E ratios, maybe even the 95+ of the Chinese exchanges, in which case, Facebook's market cap may approach or pass Google's.
I've been shocked to discover that the cool, nice, smart people I knew in high school and college turned into bitter, closed minded, bigots in the intervening decades.... Logging into Facebook means seeing stream of inanity and reports about the night's drinking-- which I don't mind-- punctuated by ignorant political outbursts and hating on the latest groupthink target for 5 minutes of hate- which I do find dismaying.
So I don't really see the attraction of facebook, and log in there very rarely now.
I couldn't agree more. If my close friends and family used twitter and flickr there'd be no reason for me to ever log into FB. Despite the enormous number of users I can visualize a mass exodus from the service, it's harder for me to do this with Google which provides an actual service that would be hard to replace.
All of the above, and add the "return to high-school" mentality that users start to slip into.
Facebook's policy of not telling people when they've been disconnected, while understandable on their part, is a bitch on the receiving end. Wifey got unfriended last week by someone and it was a week of bitter gossip, self-questioning, and teeth gnashing among friends. What a waste of time.
Why not just remove your old high school friends as Facebook friends? What you'd have left is a small social network filled with only people you want to keep in touch with.
Privacy complaints, not trusting Zuckerberg, objecting to valuation...those are Facebook complaints I can comprehend.
But disliking the network of friends you created? That seems like your problem, not Facebook's.
Oh, I've done that, but there isn't much draw to the site anyway, and the fact that i finally joined when I was convinced that Facebook respected privacy, only to find out that they are constantly making things public by default.
To be honest, the only reason I still have a FB account is a feeling that ill need to integrate our products with the site in the future.
The engineering potential of Google is second to none. Founders of Google are brilliant and morally impeccable persons who have been making a lot of good choices for the company.
Facebook on the other hand, has a CEO who is a autistic semi-retard with a tendencies to screw people over and his luck is about to run out...
It all starts at the people at the top...
Brin and Page >>>>>>>>>>>>>>>>>>>>>>>> Zuck
I think it's fairly silly. Google is profitable because people searching for things on the web are trying to find stuff. They have intent to buy/visit/signup etc.
What intent do people have on facebook? Wasting time? Playing games? Chatting to friends?
It's in a different league.