Could Facebook eat Yahoo’s lunch?

by Mathew on May 24, 2007 · 3 comments

As promised, Facebook has launched an ambitious effort to transform itself from being just a social network into a platform with all kinds of services from other companies running inside its network. In a sense, Facebook will be the frame of the car and the engine, and other companies will provide the radio and even the seats. This is more ambitious than I was expecting, although PaidContent tries to play down the hype.

snipshot_e4ia5vhurcg.jpgFacebook has announced partnerships with more than 65 companies to build features and widgets based on the Facebook API, and those companies — as detailed by Allen Stern at Centernetworks — include everyone from Microsoft, Amazon and Warner Brothers to Photobucket, Slide and Twitter. Interestingly enough, those last three partners are all competitors to some extent, since Facebook’s photo app competes with Photobucket and Slide, and its status updates are very Twitter-like. Reaching out to those companies and giving them access to Facebook’s user base is an interesting move for the company to make. Investor and PayPal co-founder Peter Thiel says it is the most important development since Facebook was created.

Mark Zuckerberg, the 23-year-old Harvard dropout who started the company with a few of his friends — and has been criticized by some for not selling to Yahoo for a rumoured $1.6-billion last fall — told Fortune magazine that he sees the social network becoming something like “an operating system” for the Web, and made an analogy to Windows. At least you can’t accuse the flip-flop-wearing Zuckerberg of thinking small :-)

Whatever Facebook’s chances of success might be — and that is still a very big question mark — this move does one thing for sure: it reduces the odds that the social network will take after Friendster and suddenly flame out. And as Alex Iskold pointed out in an analysis at Read/Write Web, if it can successfully leverage the social ties within its network, it could turn out to have the magic ingredient that Yahoo has been missing.

  • http://www.onlinemediacultist.com Eric Berlin

    I’m very curious to see how companies who utilize The Platform will leverage their access to Facebook to actually get in the face of Facebook users to get them using their services.

    In other words, just because you’re on MySpace, it doesn’t mean that you’re checking out featured comedians on the MySpace Comedy page. The social networking experience tends to run through the profile (you login to your profile, and then click on your friends’ profiles, cute guys/girls that you want to check out, etc.).

    So I’m wondering if access to The Platform means that you get in-house advertising on Facebook? In other words — how will these companies make the leap into Facebook profiles?

  • Mathew

    Good question, Eric. That will be interesting to watch. And I also wonder what effect it will have on companies that essentially tie all (or most) of their growth and revenue to being a widget inside Facebook. Will they regret it?

  • http://carsafetyseats.info Safest Car Seat

    Good post. Have bookmarked your blog and will surely come back.

Older post:

Newer post: