Facebook is doing the Skype dance

March 28th, 2006 at 2:24 pm

It’ll be interesting to see if the niche social networking sites that continue to emerge will end up taking any of the wind out of the sales of these larger, more general interest ones. Maybe that’s a long shot, but it seems it could impact the value of said sites down the road.

March 28th, 2006 at 2:50 pm

Michael, I think you’ve hit the nail right on the head, this is nothing more than a PR move to test the waters and see what the market can take.

I’ve got a question though…what’s the Facebook strategy to keep all its current users after they graduate from college and move into the workforce? At least MySpace isn’t restricted and gives twenty/thirtysomethings a place to come back to…

March 28th, 2006 at 3:14 pm

Can they monetize the traffic? Have they done it in practice, or is it just theory?

The fact that they have 85% of the college market means there’s not a lot of upside in users (college populations are not growing particularly rapidly) so they need to figure out how much revenue they can generate per user and how much they can grow that number.

What they really need to do is merge with LinkedIn (already profitable) and transition the Facebook users to LinkedIn upon graduation.

March 28th, 2006 at 3:16 pm

It is a fair compairson: They made some design choices (keep it closed) that will have a big impact on pageviews, etc. Overall, not being an open part of the web makes it far less valuable than MySpace…

March 28th, 2006 at 3:27 pm

I question whether the college student market actually has value. Very few college students are frequent buyers, as most are broke. They don’t go see movies often, don’t eat out, don’t buy goods, etc. The only ads I ever see on Facebook are for T-shirts.

Sean, MySpace did well precisely because of it’s flexibility. Facebook is rather boring once you graduate (I was one of the first alum users, graduating in 2002). There is really nothing to do on the site, and I check it perhaps once a month.

March 28th, 2006 at 3:45 pm

can you define “moving aggresively into the high school market”?

March 28th, 2006 at 4:02 pm

It’s only a college market for now…

Facebook has 85% of current college students today, but they also retain a majority of the students in Alumni status. Even if the number of active college students doesn’t grow radiply, the number of facebook users will.

Facebook has only recently captured the entire college scene, and I’d imagine the plan is that the number of alumni users will eventually far exceed current college students.

The obvious negative of facebook is a limit of the number of potential users, but at the same time it empowers a level of trust in users that isn’t there on myspace. And trust of course can lead to P2P payments, file sharing, etc…

March 28th, 2006 at 4:27 pm

Facebook is suddenly for sale b/c universities start disliking them.
No university is really happy if a third party knows all their students or uses the university emailsystem as a business channel.

March 28th, 2006 at 6:27 pm

There’s a huge difference with Skype: Skype had already proven that it can monetize its traffic, and had in the works many more sources of revenues. I don’t see $2Bn for Facebook, and franly they should be in the Idiotbook if they turned down $750M. But did they really?

March 28th, 2006 at 6:38 pm

I am college student. I use facebook all the time. My friends use it 50 times more than I do. It is the cleanest, most efficient, and most socially “networked” site I have ever seen.

I hate MySpace. Someone here said they modify their pages and make them look ugly. I agree a 150%. I have seen many social networks and none seem to be as mature as facebook is.

Here is the downside. Now that facebook will be bought, the new owners might change it around. In that case, I will cancel my account.

The best thing about facebook is that you need to be qualified to join. This does not let everyone come in the game, but those who do are serious about networking. Some idiot is not allowed to create an account and portray himself as someone else.

March 28th, 2006 at 6:49 pm

Sean said: “This is made worse by the fact that their users “mod” the hell out of it with no taste. Facebook, on the other hand, had limited their users’ ability to customize with the positive side effect that they layout and features can be more consistent and clearly organized.”

That is *exactly* why MySpace is flourishing right now - they let users do the stupidest, ugliest, nastiest html hacks right now, and all the kids who could care less about web standards or ajax love it. You can embed video anywhere, put pictures in stupid places, use horrible color schemes, whatever. Thats one reason the 13 year olds love it. It literally is _their_ space.

So please, don’t try use that as a negative against myspace, since its actually one of its greatest strengths. It bothers you and me crazy, as programmers or designers, but its perfect for the target audience.

see: http://www.danah.org/papers/Fr.....Essay.html

March 28th, 2006 at 6:59 pm

100% agree with Rob above. Myspace is incredible popular b/c of it’s cheap design and “Customizeability”. It is 2006 and people saw the same corporate design over and over.

March 28th, 2006 at 7:09 pm

Facebook does have ads (in response to Anas’s comment). If I had the time, I would try to calculate how much they make from these ads.

March 28th, 2006 at 7:13 pm

So far facebook has avoided the negative media attention surrounding myspace. But what if there are some unfortunate incidents and college’s start to block incoming email from the facebook mail server? It seems to me that facebook’s added value to the market is how they authenticate users via their .edu address.

March 28th, 2006 at 9:02 pm

Myyearbook is capturing a lot of collegestudents (35,000 signups/day) chances are these people will not migrate to facebook once they enter college. Myspace has huge marketshare as well.

Everyone should keep in mind that monitization of the web is still in its early stages, once google or yahoo start showing ads based on previous search history sites like myspace/facebook could suddenly be worth 4 to 5 times the current value.

I have no doubt the value of facebooks traffic could be on the order of 2 billion in 5 or 6 years, the real question is will facebook still have much of its current marketshare?

Oh and facebook could make a killing upselling student loans.

March 29th, 2006 at 9:04 am

1. I do not believe that facebook has 85% of the college market. Where’s the proof of that?

2. The statement that facebook retains a large number of alumni is just more BS. Alumni? How long has facebook been out there? Four years? It takes four years to become an alumni.

The whole thing reeks of hype and the usual Web 2 Internet Bubble 2 greed.

March 29th, 2006 at 12:20 pm

>>>

Mike Drips,

I agree with the bubble sentiment to a certain degree. However, on your point about alumni: If you sign up as a senior, you will be an alumni user in less than a year. Remember that

March 29th, 2006 at 4:33 pm

Facebook is a very tough in terms of its value. First, it is clearly the gorilla in its space and still has a great deal of potential for growth, even within the college sphere. Facebook began as a very exclusive social networking site. In the early days participation was limited to exclusive schools, namely Ivy’s. Its growth outside of these elite institutions really didnt begin all that long ago. The real value of facebook is if they can figure out way to retain their alumni population. Looking at the frequency in which my friends (class of 2004) still use facebook, it has declined, but only slightly. It is still the place to go to ping your friends, check out the hot ‘friend of a friend’ and more. College students today use facebook everyday. All I know is that that is an awful lot of very very valuable pageviews.

April 2nd, 2006 at 10:11 am

Even if MySpace is a fad, with ads on the home page running $500k per day, NewsCorp should be able to easily recoup the $650m it spent.

April 4th, 2006 at 2:13 pm

any educated guesses on who facebook’s potential suitors may be, or when the company might sell?

April 26th, 2006 at 7:45 pm

Facebook is monetizing traffic very well and has since the early days of the business, that is a key part of what Matt and Sean were able to make happen.

Check out the flyers you can post on it and the cost per flyer and then quickly look at how many new ones are being posted per day. A quick estimate from that suggests they are generating some real money every day.