Musings on Facebook, Google, Microsoft, and Monetization
Brian Littleton’s blog on FaceBook got me thinking a little. Brian wrote:
I get a lot of wide eyes when I say this usually…but I think that it is entirely feasible that a whole new generation of online users will not even use the WWW at all, but will perform all tasks online specifically on Facebook. To them, being “online” will mean being on Facebook…not being on what we consider to be the web. This new generation will grow up online not knowing who the powerhouses on the web are… they will recognize only the powerhouses on Facebook specifically. What does this mean for you? as an affiliate or developer? That means that you have an opportunity to build up a powerhouse brand if you develop a quality application on Facebook. Take this one example… when the “Facebook generation” gets to the point where they want to buy/sell some stocks… They aren’t going to know that E*Trade is the spot to go (using E*Trade as an example) … they are going to search specifically on Facebook and find whoever it is that has the best system.
Facebook is clearly a new marketing channel for us all. In fact, while San Francisco has been celebrating the 40th anniversary of the Summer of Love, down the road in Silicon Valley, this summer will be remembered as the Summer of the Facebook App Wars.
Facebook has without a doubt a force to be reckoned with in the online space. And while MySpace seemed posed to win the social networking game a 18 months ago, today, it’s up for debate. My money personally is on Facebook.
But here is the issue for Facebook (and in fact most of the Web 2.0 traffic for that matter). It’s really hard to monetize the traffic. Wallets are closed, no one is looking for goods or services because everyone is having too much fun socializing.
Facebook is getting a dollar or two CPM I would guess, though I have not priced it. They also have their deal with MSN, though I suspect, they are not making that much from it. And yes, sooner or later they will squeeze the app makers. But will it be enough? There is never enough when running a high growth, high profile business.
Brian’s theory is that transactions will occur on Facebook. And that makes sense, a Facebook walled garden where merchants and advertisers selling goods and services can connect with customers works as a monetization model. And in fact, this will let Facebook own the customer too – did I just hear a yelp of jealously coming out of Googleplex? But do merchants and advertisers really want this? Do you think Amazon, eBay and others will share their customer data? Isn’t Google Points failure an example if how hard this is to get advertisers to sign up for this type of program en masse?
So perhaps Facebook might take a different route toward monetization.
Lets assume that Facebook becomes the home page for most of us – and isn’t the pull of our checking in with our friends and family so strong that Facebook could easily become our entry point on the WWW? That will surely keep people loyal.
But users still need to shop, buy insurance, and search for a ton of other information on the Web?
So what happens if Facebook becomes everyone’s home page and then that page has a search box onto the WWW?
If this is the case, Facebook will cut a deal with a search engine and push for a sweet rev share deal. The obvious play is Google. If Facebook really does get scale and people begin their searches from Facebook, this might impact Google’s bottom line sooner or later.
However the news yesterday was that the guys up in Redmond WA are supposedly after a piece of Facebook. So, if that is the case, maybe MSN will end up as the search box on people’s Facebook homepage.
I always thought it would be the FTC that stopped the Google juggernaut, but it would be much more interesting if it was Microsoft via Facebook.
I know this is a lot of what if’s , but a you Facebook is going to control a lot of traffic no matter how you look at it and they need to figure out how to monetize it. Nothing monetizes better than search on the Web, and if your chasing the big money, it’s the obvious place to go.
