The New Facebook Economy

by Admin on October 4, 2007

If you don't know much about Facebook, here's the Wikipedia lowdown:

Facebook is a social networking website which was launched on February 4, 2004.

Facebook was founded by Mark Zuckerberg, Harvard graduate and former Ardsley High School student, in 2004. Initially the membership was restricted to students of Harvard College. It was subsequently expanded to other Boston area schools (Boston College, Boston University, MIT, Tufts), Rochester, Stanford, NYU, Northwestern, and all Ivy League schools within two months. Many individual universities were added in rapid succession over the next year. Eventually, people with a university (e.g .edu, .ac.uk, etc.) email address from institutions across the globe were eligible to join. Networks were then initiated for high schools and some large companies. Since September 11, 2006, it has been made available to any email address user who inputs a certain age range.

Wow! Where would we be without Wikipedia?

Exploring some Del.icio.us tags just now I came across a couple of articles about Facebook on Charlene Li's excellent blog. The first talks about the value ($10 billion) that the company would be worth if Microsoft goes ahead and invests $500 million for a 5% stake in the company. Yes, you did read that right - a 5% stake! As she notes the business was "only" valued at $1billion  a year ago when Yahoo! was interested in buying it. Through some basic computations (hell, I could even follow it), she shows how it is feasible for that figure to be arrived at.

Facebook is the hottest Internet property at the moment and the world's biggest corporation wants even a small part of the action.

The second article - Faceforce kickstarts the social business app movement - discusses an element of Facebook which has ensured that a lot of developers (read: Web 2.0 developers) have migrated over to the Facebook platform. Facebook, unlike MySpace, has opened its doors to developers and made it easy for them to not only add their applications to Facebook but also to monetise them. FaceForce, is very interesting in that it allows Facebook profiles to be integrated into Salesforce, a leading online CRM solution. Like Facebook, SaleForce lets external developers create applications which makes SalesForce a more robust, and tailored solution, than its competitors.

It's fascinating to see how many of the 'new' technologies, like Blogging, Video Sharing and Social Networks have graduated to the business world. And probably the businesses that partner with, or use, these new technologies, will be the long-term winners.

Related
The Kid Who Turned Down $1 billion (Fast Company)
The Facebook Economy (Business 2.0)
Inside the Facebook Economy (Fast Forward Blog)

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