What could bring Facebook down?
Could Facebook rapidly and completely disappear from our lifes, very much like the search giant Altavista did in the late 90s?
Can Facebook monetise its gigantic social data set? There seems to be plenty of options for Zuck to make a buck, here are a few:
– The Graph Search could make most dating sites obsolete. No need to (embarrassingly) sign up on a dating site, all you need is already available on your Facebook account. Be prepared to pay a small fee in order to message some of the “Single women who live nearby and who are friends of my friends and like Baseball” (copy and paste this into your Facebook search to see what I mean).
– The Facebook App Centre is the perfect marketplace to find and sell games and apps, great potential for further monetisation. A similar marketplace could be built for services a la Airtasker, and the oodle integration could certainly be improved. Plenty of money to be made there.
– Advertising within the Facebook News Feed has only just started and as Facebook gets better with the format and social weight of these ads they will become more and more core to brands’ marketing strategies. This is relevant to both web and mobile Facebook apps, as highlighted in Facebook’s 2013 financial report.
So we can reasonably assume that monetisation is unlikely to be the problem here. Of course for money to come-in Facebook has to keep its user engagement high. So far they are doing great. There are now over 830 million people who interact on Facebook DAILY.
Could another site or app emerge as a Facebook killer? I don’t think people would start to surrender their privacy and personal data YET AGAIN to another brand. In a way, Facebook’s weakness (privacy related trust issue) is also its strength. It has taught users to be careful with what and who they share information with.
I also don’t think people would actually leave the platform like a loud minority threatens to do every time there is a new design rolled out. There is simply too much stickiness to the hundreds of friends, thousands of photos and tags and numerous 3rd part websites and applications that require users to login with their Facebook account.
I’m not ruling out the possibility of a decreasing level of engagement but I’m assuming that it would take considerably longer (years) for users to move away from Facebook onto something else. Certainly longer than it took users to move from Altavista to Google. And with time Facebook will have the opportunity to fix its platform and bring users back in.
So what else could replace Facebook in the years to come?
Thomas, Tom and I came to the conclusion that it would be unlikely for people to start typing a different URL in their browser or tap a different app on their phone to access their journal of social activity.
But what if there was a new way to interact with the social data? A way that doesn’t require you to browse Facebook.com or check your smart phone? What if it’s not the platform that is in risk of disruption but instead it’s the way we access our social data?
The Google Glasses are the most striking example of a possible massive Facebook disruption.
Who needs Facebook when similar data can be pushed to you in an even more meaningful way through natural interaction?
The obvious challenge here is in the technology (ie. the hardware, not the software). Facebook is notably absent from technology design and innovation, having even insisted that there will be no Facebook phone.
Traditional technology companies such as Google and Apple seem naturally to be in a better position to innovate and conquer market shares with their hardware expertise.
The financial markets seem to agree. Google has outperformed both Apple and Facebook over the past 12 month.
It will be interesting to watch Facebook’s future moves (in terms of acquisition and talent hire for example) to see if anything changes.