We all have bad days. Facebook, meanwhile, had a bad month. So, while it may be the first time in Facebook’s history that their traffic plateaued and declined, it’s not a sign that the company’s headed for bankruptcy. The company has managed, in a few short years, to become one of the most popular sites on the internet. To bearish commentators, the visitor drop is a harbinger of the company’s fall. Yet Facebook, Silicon Valley’s darling, has nothing to fear.
The Shine’s Worn Off
Facebook grew in a field that was crowded predominantly by established players, including Friendster and News Corporation’s MySpace. With its clean user interface and Harvard dropout founder Mark Zuckerberg, the company posted astounding growth numbers and quickly became one of the big players in the social networking industry. Facebook became the “it” company, and they began competing with industry powerhouses like Google for engineers and executives, fueling a rise in the average engineering salary. Executives flocked from Google and Yahoo to Facebook, leaving cushy jobs at the internet giants for a stake in a company that should be, by all indications, IPO-bound in 2009. Now, Facebook’s established and, following a $15 billion valuation from Microsoft, doesn’t really qualify as a startup any longer. Google and Yahoo both went through the same thing as they lost the shine of “newness.” Both have suffered ups and downs in their histories as well.
Facebook’s greatest success, the launch of the Facebook platform, set off a field of commentators who believed that Facebook would become an operating system of sorts for the future. While those predictions were perhaps a little optimistic, the application market on Facebook has rapidly become one of the most lucrative internet businesses. Startups like RockYou and Slide that once relied on embeds on MySpace and blogs now see Facebook as one of their central traffic sources. In mere months, an economy has grown around the Facebook platform, and dozens of new applications are created and added each day. The platform has served as a model for a bunch of other social networking companies, and even has been the underlying platform for similar systems on networks like Bebo. Google OpenSocial, launched shortly afterwards, is an attempt to bring the social network application market pioneered by Facebook to a wider range of sites.
The Weakest Link
While increasing openness in some areas, the company has kept an increasingly tight grip on the information of their users. Mark Zuckerberg attempted to incorporate information fro mother websites into Facebook with the Beacon advertising program. The initiative, originally opt-out instead of opt-in, culled actions from a wide variety of websites like Yelp and Amazon. User reaction was stiffly against the program, as many users quickly found information they’d like to to keep private snet throughout Facebook to all of their friends. Initial advertising partners like Coca-Cola pulled out of the program and left Facebook to completely revamp the program. Articles in the New York Times highlighted privacy concerns as well with the program, and Zuckerberg quickly jumped to defend his pet advertising initiative.
The uproar over Beacon was somewhat similar to the users’ revolt when Facebook initially launched the News Feed and Mini Feed, both of which are now central to the Facebook experience. Originally launched with little privacy controls, the Feeds report users’ activities to their friends. After an apology to the Facebook community, Zuckerberg added fixes to the new features and they are now crucial parts of the social network. Recently, Facebook has taken flak from the web from various media outlets for the difficulty of account deletion. The controversy, which started after a New York Times piece, revolved around the difficulty of account deletion. Originally, users could only deactivate accounts, with their information stored in case they would like to reactivate them. After the outcry, the company has added new tools to faciliate easier and more complete deletion.
It’s a Utility
What the majority of Facebook users don’t realize is that the network isn’t a toy; it’s a utility. Zuckerberg has managed to harness something real, our interpersonal connections, and give us a forum to digitally display and enhance them. He’s using technology to seize our real life social network and put it on the internet, forming a “social graph” of sorts. Facebook can be immensely uesful to those who use it productively. While the “Hug Me” application may not do much for your business, the ability to collaborate on documents with applications like Zoho inside of Facebook with friends make it an indispensable tool.
For young people, it’s another extension to their digital lives. While instant messaging and text messaging remain the centerpieces of teen communication, Facebook has rapidly replaced e-mail and other forms of contact. Every year, with a new crop of high school and college students, Facebook will see lots of new users. After they discover the benefits of using Facebook, they will most likely stick around. As the BBC suggests, while adults may quickly tire of the site, teens are picking it up at a quick clip.
The Future is Mobile
The youth of today are more attached to their cell phones than Crackberry addicts. The continual stream of texting and communication is beneficial to Facebook’s growth, and the company’s mobile strategy seems to recognize this. Their iPhone site, for exampole, provides users with a clean interface (what Facebook is known for) and can also serve as an on-the-go phonebook. Need a number, or need to remember what one of your friends looks like? The place to go is Facebook Mobile. As this generation grows up, it’s hard to imagine they will lose touch with Facebook until the “next big thing” comes along.
It’s Here to Stay
Facebook became famous as the anti-MySpace, with most people using their real name, clean backgrounds, and more. Years later, those features remain and serve to make Facebook one of the internet’s most popular destinations. Facebook isn’t going to stop innovating. TechCrunch revealed yesterday thta the site planned to incorporate external information in the News Feed, making it a direct competitor to sites like FriendFeed and Plaxo’s Pulse. Features like these could make Facebook the homepage and aggregator for the next generation. Web 2.0 icons like Robert Scoble, always eager to make a mountain out of a molehill, make the situation sound dire with headlines like “Is Facebook doomed?”
The answer is simple. While pundits continue to analyze the latest traffic numbers, Facebook is focused on the future, where it should be. Years down the line, traffic numbers from January 2008 won’t matter much to the company. Its features, and its ability to respond to customer concerns, will. The company’s failure to react to the buzz surrounding the release of the new metrics should symbolize their internal outlook. Sure, Facebook’s traffic may have momentarily dropped. Just wait, however, for the rise you’ll see in the coming years.