Could Facebook Ever Turn Into A Myspace Or A Bebo?
As Facebook gets ready to file it’s IPO papers (tomorrow) ahead of their $100 billion public offering in a couple of months time just how safe is the money that investors like JP Morgan and Microsoft have tied up in the company.
Will the meteoric rise continue once Facebook becomes a public company, or is there a chance that the social network will end up in a similar position to its predecessors like Myspace and Bebo? Both those social networks were lauded at the time and seemingly could do no wrong, but Bebo was rumored to be closing yesterday while Justin Timberlake is trying to do something new to turn Myspace around and failing miserably. But surely Facebook is on another level and is simply too big to fail?
An Advertisers Dream
If you want to be a successful business, it’s not ultimately the amount of users or how much media coverage you get, but the amount of money you make that determines your success. The older social networks relied on banner ads and more traditional revenue streams which could only take them so far, but Facebook have invented possibly the most targeted advertising platform the world has ever seen. With this advertising platform Facebook has the ability to have revenues more like Google and less like Myspace. If you are a public company revenue is pretty much the most important factor and that is a good sign for the future of Facebook.
A Social Platform
Myspace and Bebo were websites whereas Facebook is a platform. There is a huge difference and it is the fact that Facebook is wrapping itself in to the very fabric of the web that gives it such a huge advantage. You don’t really have to be on Facebook.com itself to be using the service. You could be using a social plugin, leaving comments via their commenting system on a 3rd party website or one of the 400 million mobile users. There are plenty of huge companies that rely on Facebook as a platform (Zynga, Netflix, Spotify etc) for acquiring users and that will continue to grow. As Mark Zuckerberg says himself Facebook is becoming the “social plumbing” of the web and that is not about to change any time soon.
$10 Billion War Chest
Facebook has been extremely well funded for the last few years as investors piled into the company, but despite that they have always been a start up burning through cash. The money that they did have was used for scaling, hiring and a series of acquisitions. As soon as the company goes public though they are going to have a massive war chest of over $10 billion in cash that they can use to prop up the company and hopefully grow it as well. That money will be used for everything from acquiring smaller companies to offering increased packages to the most talented engineers in the world. Facebook have come a long way without having piles of cash, and now we are about to see what they can do with tons of money in their pockets.
Facebook are brilliant at re-inventing themselves. Look at the site now and you will see that it looks nothing like it did when it started. It doesn’t even look like it did this time last year. Facebook often upsets its users by making sweeping changes but by constantly tweaking the look and feel of the site and trying lots of new features they have been able to keep the site incredibly sticky with users spending hours at a time there. Their new features don’t always work but Facebook are certainly not scared to try new things.
The Zuckerberg Effect
It’s pretty widely accepted that the young Zuckerberg fellow is a bit of a genius and totally obsessed with improving the product. Alongside his genius is the fact that he is far less obsessed with making a quick buck or becoming famous than other founders of social networks seem to have been. Despite movies being made about him and constant media coverage, it is clear that he is obsessed with turning Facebook into a platform that rules the world rather than worrying about the $25 billion that he will be worth shortly.
All in all, I think it’s safe to say Facebook won’t turn in to another Myspace or Bebo anytime soon.