It's fascinating to me that nobody has commented on the last few sentences of the article. To me this is where the real juice lies:
> A more likely outcome is that Facebook uses their assets – a vast number of extremely engaged users, it’s social graph, Facebook Connect –to monetize through another business model. If they do that, the company is probably worth a lot more than the expected $100B IPO valuation. If they don’t, it’s probably worth a lot less.
So long Facebook is a "nice-to-have" business models around paying for access or privacy are dead on arrival, users will just leave or go elsewhere. However if Facebook becomes a "must-have" in order to participate in society, then people will do whatever it takes. If Facebook is becoming an infrastructure provider then they have every incentive to encourage a rich ecosystem and businesses will pay for access, even consumers perhaps might. The comparison that comes back to me is the early phone system from 100 years ago. It was a "nice-to-have" to have a phone number. But phone companies invested in infrastructure and interoperability and lots of third party applications emerged that got deeply embedded into societal life. Thereby the telephone became a "must-have". Facebook today seems to have a similar opportunity in front of it. If they realize and leverage it, it could be huge.
Absolutely agree. Their social graph is their most important asset. It's a goldmine for any service. For the most part, it is the best indication out there of who you are connected to. So many sites and services are using this 'trust' network to provide services that weren't capable before. An example is a travel site (forgot the name now) that allows you to see if friends of friends are staying over at a hostel on a certain date.
> A more likely outcome is that Facebook uses their assets – a vast number of extremely engaged users, it’s social graph, Facebook Connect –to monetize through another business model. If they do that, the company is probably worth a lot more than the expected $100B IPO valuation. If they don’t, it’s probably worth a lot less.
So long Facebook is a "nice-to-have" business models around paying for access or privacy are dead on arrival, users will just leave or go elsewhere. However if Facebook becomes a "must-have" in order to participate in society, then people will do whatever it takes. If Facebook is becoming an infrastructure provider then they have every incentive to encourage a rich ecosystem and businesses will pay for access, even consumers perhaps might. The comparison that comes back to me is the early phone system from 100 years ago. It was a "nice-to-have" to have a phone number. But phone companies invested in infrastructure and interoperability and lots of third party applications emerged that got deeply embedded into societal life. Thereby the telephone became a "must-have". Facebook today seems to have a similar opportunity in front of it. If they realize and leverage it, it could be huge.