The Future of Facebook

Facebook continues to make a series of evolutionary moves in recent months, rather than react to the news, let’s take a holistic look at where the company is headed.   I’ve given my perspective to SFGate, now but want to dive into details here.  I’ll give my perspective, but as we’ve seen time and time before, the real value is the collective contributions in the comments.  

Evolving to a platform –not just a social network
Facebook isn’t a social network, it’s really a communications platform –in fact, when you look closely, it’s not unlike an operating system on the web.  Early innovations such as the instant messaging tool,then the applications platform that allowed 3rd party developers (called F8, correction: Just Facebook Platform) aren’t unlike what Microsoft offers to consumers.  What separates them from others is the social news feed which aggregates what others in your network are doing.  

Unique culture fosters innovation
It’s important to examine the culture and leadership of a company as it’s a strong indicator of how they’ll behave.  Young, innovative, yet somewhat reserved leader Mark Zuckerberg continues to make choices that don’t always include what the community expects –or wants.  In my visits to their previous HQ, it was much like a dorm room: spray painted walls, fancy cafeteria.  However recently, they moved out of downtown Palo Alto (to the determent of local businesses) to a centralized location on California avenue in biotech row off Page Mill.  The employee base, and culture reflect all of this: the age of the untainted product teams indicate this –In my ripe old age of mid 30s, I’m clearly one of the oldest during my visits.

Recent moves indicate move towards real time.
Fast forward to summer 2009, and we’re starting to see some radical developments.  First with the acquisition of Friendfeed which is mainly a talent acquisition and early snatching of potentially the next Twitter competitor, who they were unable to acquire.  Now we’re seeing indicators that they’re gearing up for mobile, and other devices like gaming consoles with a Facebook lite version that is quickly delivers the basic for those that need to quickly find out what their community is doing and communicate back.   Lately, we’ve seen indicators they want to find ways to improve real-time search, which means they can help consumers make real time decisions. 

Awkward adolescence has its challenges
The continued innovation is spurred by the elusive business model —this awkwardness is a natural outcome of a company in growth.  I’ve heard a couple of times from various employees that they’re generating revenue (but there’s no official information available) yet I hear from brands that traditional advertising is ineffective.  Secondly, this constant innovation becomes a real burden on brands who have a difficult time understanding which tools to use and why, as well as 3rd party developers who are constantly rejiggering the changing API and Terms of Service. 

What to Expect in Facebook’s Future: A Web Based Operating System
So what’s in store for Facebook in the future?  Here’s what we should expect:

  • Aggregator of all.  To win, Facebook wants it’s network to spread to other locations, then aggregate back to it’s website.  This centralizes Facebook (which can be accessed anywhere from any digital medium) as the hub of communications.   As a result, consumers will make decisions based on information from peers in this hubs, and brands will pay money to be part of it.
  • A new class of competitors –beyond social networks.  In the end, Facebook is an aggregator of all information that’s important to an individual and their friends. Who currently does this?  Media darling Twitter does this, Friendfeed (hence the acquisition) and existing web email systems like Hotmail, Gmail, AOL, and Yahoo have shown indicators they’re thinking about heading this way.  
  • Content to be more public –yet members may resist.  The option to allow profiles to be public and the vanity URL landgrab are indicators that they want to make information more public –yet the challenge will be convincing members to opt-in.
  • as a destination isn’t as important.  To be successful, Facebook will need to spread to many websites (like corporate ones) and experiences, this is why Facebook Connect (authentication for 3rd parties) matters.  This Era of Social Colonization empowers the FB experience to spread to other websites.
  • Monetization engines to turn on.  The constant innovation of dozens of products are akin to ‘throwing pasta at the wall’ to see what sticks.  Facebook’s 250mm user base is nearing mainstream web portal (see traffic compared to Google and Yahoo) they’re quickly closing the gap.
  • No kingdom lasts forever.  We see this time and time again, technology companies supernova, grow then fail to innovate from political tape and sheer size.  

This is my take, yet it doesn’t necessarily mean it’s the only opinion.  I hope to hear what you think holds in store for Facebook in the coming years, love to hear your comments.

72 Replies to “The Future of Facebook”

  1. Seeing what sticks requires paying attention to the details – problem is that they are serving to many generations and groups without understand the needs of each. If everybody is in their 20’s at Facebook what are they doing to get input?

  2. Perhaps the reason for Friendfeed acquisitions is that Facebook is having a hard time finding ROI or results they expect from social advertising. With this huge user base, they have an opportunity to become a first search engine in web 2.0 world that combines both social and real time results. And it will pump more cash for their business.

  3. Courtney, yup, FB’s had to go broad now, no longer just focused on youth.

    Nallai, bingo. If you look closely, Google is an aggregator. Facebook and Friendfeed do the same thing. What’s the difference? Rather than aggregate on topic as the primary, they aggregate on your friends.

  4. Facebook is pretty much a walled-garden with millions of further walled-gardens inside (the user accounts). So I fail to see how by its very nature Facebook will compete with open services like the popular search engines and Twitter when it comes to de-emphasizing “destination”.

  5. It is clear that FB is not just a social network. It is part of our social life more than any other SM tool=website. It is a community builder, a communication tool, a sharing tool,an internal search engine with more than 250mm people plus companies, it is pushing us to learn that public is better…., somehow it fosters content generation, it is an aggregator and it can soon become a full web based operating systems. I can say that it does all of above exceptionally well.

  6. Facebook should concentrate on its core use – social networking. Many in the tech world would like to see new features, better search etc. In the ‘real world’ I believe these additional functions add only slight marginal value. People use Facebook because it facilitates communication with existing friends/associates. If it ever stops having this at it’s core its demise won;t be far behind.

    so the future of Facebook? Keep doing what it’s doing and only change to make itself better and not to try and keep up with other services like Twitter. Twitter has a different core offering to Facebook.

  7. Jeremiah, interesting perspective. You mentioned Google and its current functions but I couldn’t help thinking about Google Wave. From what I’ve heard about it (which is very limited), it seems like that might be the next stage in the communication evolution and, if so, that that, via GMail and its growing user base, might pose the most serious threat to Facebook. What’s your take on how Google Wave will play into all of this?

  8. Hey, the only disappointing part of this great post, is the use of the term “Web Based Operating System”. I know it’s a hip term atm, but to every genuine technologist, it’s a total and utter #fail 🙂

  9. I think at some point the folks that want to be a small fish in a big pond will stay with FB while those that prefer to be a big fish in a small pond will look elsewhere.

  10. As a business user of social media, using FaceBook as a communications platform has too many risks, the challenge with FaceBook is that it owns your list and can delete your account or change the TOS on a whim.

    I’m personally sticking with our corporate blogs, sites, and portals as core communications platforms. We use FaceBook (and Twitter, Youtube etc.) as a lead generation, community building and list development tool. I guess for me the term “communications platform” resonates with something that is a stable home base, a permanent place where my community and stakeholders can feel comfortable.

  11. I think Facebook’s biggest challenge is to get members on board about making information public.

    I believe that one of Facebook’s rise to fame was due to its closed walls (as opposed to MySpace for instance). Facebook members really liked have privacy and being in control of who can see what information about them.

    If Facebook can “make” their users comply with making their information public, the revenues will flow in very easily.

    Perhaps the first step is to show users how letting others access their information can be beneficial for them.

  12. Interesting post as usual. I’ve been eying the interesting shifts in demographics on Facebook this year and there is definitely a move to a wider, and older, user group which will definitely affect where FB moves in the future. The fastest growing demo is, after all, 35 – 54 year olds who also make up the bulk of Twitter users – so the move to real-time as well as making status updates public is pretty unsurprising.

  13. My bet is the future of Facebook is no greater than any other walled-garden approach and that open-social is the ultimate endpoint once people get past the training wheels that Facebook provides. AOL, still a successful portal, could not successfully get past tearing down the walls and MySpace is currently wandering in the desert. Can Facebook avoid what seems to be a natural progression of decay as a walled-garden?

    Another problem is the big money is still in the Boomer generation, they hold the cash as they transition out of raising families into their retirement and grandparenthood. Although 35-54 is the growing end of Facebook’s members, the tail of the Boomers, this group is still working through the temporary poverty of raising kids. Can Facebook successfully embrace, and ring money from, an even older demo?

  14. I believe Facebook will address the concerns of Shane Gibson above and become the MotherShip of social networks. Not needing to specifically be “the” destination, but rather a central location for personal info and business information with the ability to control it.

    In that, Facebook will add newer enterprise (fee based) solutions such as:
    – Google Apps (Facebook/Microsoft version)
    – Targeted Ads via Facebook Connect with social features

    Thanks for inciting this conversation (and outstanding podcast with Joe Jaffe )

  15. First off great article. I 100% agree that in order for Facebook to be successful, the company will need to spread to many websites. But the spread needs to go beyond websites. They need to be on every device that is connected to a wireless network of some sort.

    The way I see it, Facebook is quickly becoming a dynamic address book. RIM did a great job with their Facebook App. It is so cool when someone calls me and their new profile pic shows up, or when my friend from high school Birthday is today and my calendar reminds me.

    The interesting thing to see is if Facebook makes the word “Reunion” obsolete. In my opinion it already has.

  16. great article, jeremiah, thanks. i’d just add one more competitor to your list, which is the wireless carriers. if they figure out a way to socialize your phone and its contacts, numbers and content, they have an insta-network that is incredibly personal and vibrant. what do you think?

  17. Great post as usual, Jeremiah. Here’s my take: Facebook has immense potential as THE vehicle for what branding expert Dan Schwabel is calling “Me 2.0.” We are entering the era of the personal brand, which breaks down the false barrier between personal and business life. To me, this is the right direction–putting us on road towards infusing our work lives with meaning and connection with others. Facebook is one way of making this happen for ourselves. I doubt very much that it will be able to dislodge Google (or search in general) as the platform from which we conduct our online business, but I’m not sure that matters very much. What does matter is how social networking is evolving based on how we’re starting to use it. Facebook is wisely choosing to snap up a company that has had some great ideas about how to best serve users’ needs. More of my thoughts on this:

  18. Hi Jeremiah.
    I really enjoy reading your postings. I’m not so convinced that the labels / brand names – Facebook / Twitter or the like will be all that important in the future you are scetching out. Nevertheless I believe you are making an important point. The future will integrate the functionalities of e.g. facebook / Twitter into other areas. “White labeled” into organizations and fullfilling their internal/ cooperative needs – and toward mobile platforms, like the cell phone. Another aspect is outside the “actual” internet environment, and that is the influence social media have had and will rapidly evolve for the large area of media industry. I’ve a blogpost on that subject here if you’re interessted

  19. I’m comfortable with the way Facebook is right now. My friend-based social network appears to like it too! Personally, I would like for Twitter and Facebook to merge and for me to say which posts belong to which network – as well as blog content.

    The antithesis: Super-aggregation with one stop shopping. Then, we can quit worrying about how interfaces look, how to develop content, and how to quit repeating ourselves!

  20. Facebook will continue needing to reinvent itself until it figures out how to make money. That’s the inevitable obective of any enterprise.

    And it may not come from just advertisers. I agree with one of the posts above that there may be a moment where they change the terms and conditions on users who have grown to depend on this medium greatly for their social or other contact… and then decide to charge monthly or other fees for continued usage.

  21. Early indications for qualified lead generation: they are outperforming Google Adwords for several clients. More leads – higher conversions. It’s more than just a chatty social scene. Communications platform? that may well be a better description.

    Thoughtful perspective Jeremiah. We will enjoy watching it unfold.

  22. Thanks for the heads up.

    Facebook is something really big, way more then a social network. You’re totally right and I believe that we are going to see some major changes around Facebook in the near future.


  23. You may well be right in your predictions about where Facebook is heading. However, I have an uncomfortable feeling that this is a direction that may seem logical from an advertising perspective, but chasing the ad dollar is ultimately what will destroy most of the services that are out there.

    For example: Google thinks the future lies in expanding across more devices in order to collect ever more data on individuals. This is technically feasible but socially unacceptable. YouTube’s new initiatives are focused on making it a better viewier / advertiser experience (like a conventional media platfrom) rather than a better total user experience – forgetting that it is ease of upload and distribution that is why YouTube became succesful. Thus as soon as a more user-friendly distribution platfrom emerges (as it surely will) YouTube will be finished.

    The winner, for me, is going to be The Thing that understands the total requirements of a “Social Media Citizen” not biased via the view of the citizen as consumer of traditional one-to-many mass messages. The fabric of social media is not made up this type of communication – no-one yet really seems to have developed an understanding of how to work with the fabric of social media, rather than print an old business model upon it.

    Further thoughts along these lines here

  24. I have to agree with Richard. As a marketer you can really see the potential of facebook and the potential of aggregation. Especially if used very wisely and not in the old fashion way of throwing advertisements in your face.

    However, as a personal user, who really enjoys the core essence of facebook, staying in touch with your friends in a lighthearted and visual way, you wonder how much commercialization you can take before it becomes too annoying. Having the option to invite friends when you take a silly test is fine, but when this becomes a prerequisite, you no longer take them as you don™t want to spam your friends. Targeted advertisements on the side are fine if based on your interests, the groups you belong to. But if based on your sex, age or location, they become unwanted.

    Facebook has great potential. And of course, they need to make a living as well. But as user of Facebook you realize there is only so much unwanted commercial ˜trash™ you want to have thrown at you.

  25. The future of Facebook is pending on getting the right balance of extremely talented, game changing personnel that continues to shape and lead social network evolution and a team that produces a profitable business. I think it was summed up well in “Awkward adolescence has its challenges.” In fact the creative excellence at Facebook has negative ramifications to build a profitable business model. The existing advertising model and other attempts along the way have not yielded revenue potential. Facebook has shown that they have the talent to define the future of social platforms, but not shown the ability to move to a sustainable profitable business. Time (or organizational changes) will tell if they get the balance right.

  26. I really only see Facebook as another communication tool in the long line of offerings. I am not sure if its unique to me but I have seen the same trends of initial hype and a lot of people signing up and then more or less leaving again and only a small group staying. Same with Messenger and ICQ.

    Why they are not profitable I don’t understand. I my previous job I used them to advertise to specific groups and it worked really well even with the crappy display options. I think their ability to become profitable is key.

    No kingdom do last forever but they could still make it last for a very long time if they get it right.

  27. “Content to be more public “yet members may resist”

    Facebook for me is for family and very close frieds only.
    I can’t imagine to be public communication platform like Twitter.

    @fcseh on twitter

  28. Ditto on Lisa’s comment – the piece made me think of Google Wave and potential competition between the two.

    Lots of interesting info in this piece Jeremiah, thanks. Can’t help but wonder if Facebook feel they revealed too much!

  29. Like Lisa, the first thing I thought about when you mentioned aggregation was Google Wave. I’m sure Google’s going to give FB a run for its money, based on what I’ve seen in the previews and what I’ve observed people doing using the tools, etc. But Google Wave isn’t here yet.

    The next really big feature I see for Facebook, now that users are discovering how helpful lists can be, is list-driven privacy levels. This is very, very popular on Livejournal and similarly needed on FB, since FB is the first social media site for most people where their personal and professional spheres can collide.

    The advertising on FB is fairly powerful and potentially very profitable. They still have a long way to go with matching audiences to advertisements, but if you want to target (for example) all the women within 50 miles of San Francisco who have a college degree and date women, you can do that pretty easily. Another thing about the advertising on FB is that I don’t think many people realize its an option yet, especially the micro-businesses who I see using Adwords.

  30. As always an interesting and thought provoking post. The issue with Facebook to me is how it will monetize. Right now it™s becoming a social media utility that doesn™t make any money yet has very real hard costs.
    Few things to ask your point of view on for a monetizing model/s or opportunities:
    ¢Social CRM: Could Facebook not extend its platform, as you put it, to become more of a social crm and then plug into other core CRM providers
    ¢Internal Intranets: Most companies whether they like it or not are using Facebook as their corporate intranet. Seems Facebook could develop a secure intranet utility that could bridge personal and business lifestreams
    ¢Some type of app store/mobile device: Seems if Facebook buys/develops a mobile platform than it could not only extend its community experience but look to monetize an app business as well.
    At what point will Facebook have to put up or shut up in order to drive real revenue at a level higher than its costs? Most advertising is just the same banner bullshit that really doesn™t work. The advertising that could work relies on using personal data collected from Facebook users. Perhaps that is the tax we will have to pay to the utility.


  31. With regards to your final prophetic comment on the future of Facebook, I wholeheartedly agree with you. If you look at the lifecycle of social sites in South Korea and Japan, whose popularity and sheer influence climaxed prior to the launch of Facebook and through the first iterations of the social media channel, you see that once membership, services and innovation become saturated the site eventually dies. Mixi is still going strong, but in my opinion has reached its hey day. Cyworld is a good example of this, in that its member registration rate has slowed, while user inactivity has grown. Of course being in South Korea and targeted towards a single demographic, the site’s shelf-life was limited from the beginning and their foray into the U.S. was unsuccessful. I think if you look at it granularly, it’s like any trend. When the axoim points of the where the trend began begin to diminish, then people become disinterested and move on to the next thing.

    I don’t see why analysts wouldn’t compare such entities as Facebook and Twitter to their counterparts in the Asian markets. Primarily because both Japan and South Korea have much more advanced telecommunications infrastructure and with reagrds to the concept of engagement and relationship building over the internet these two countries are in the future.

  32. Your last point “No Kingdom Lasts Forever” is the one that I think will prevail much sooner than many expect.

    As Facebook becomes more complicated — a paypal competitor, a social aggregator, an application platform, etc — it leaves the door wide open for something more simple to take its place. Twitter is just the first example of this. Soon the core user base will get fed up and look for solutions to fill the void that the “old facebook” left us with.

    Disruptive innovation always prevails.

  33. Facebook really has become much more than just a social networking website. It is a place for people to communicate with people they might not have normally met in person. It has become quite easy to to communicate with individuals using this platform.

  34. Yes I agree with you.
    First of all, FB is on the inflection point of its age hence the growth is magnificent but is “normal” in the industry where new thing i.e. fad is always booming and fading out as fast when other similar services enter the market.

    One thing to be noted that main lever of FB is its ability to touch human basic needs i.e. to be connected, always in contact and can be contacted. I live in Indonesia- where the culture is based very much on the “social” interconnection and FB does just that.

    Everybody knows- especially in this IT age- FB has to keep its edge by keep inventing new human needs. Sounds simple not really, I suppose.
    The key is simple though, looking at the culture- each nation, each tradition, each communities- where they all have specific needs & interests. This is what FB does with its applications and services. Make people interest, get addiction, becoming habits, & capitalize the business.

    Good luck to FB- the market is wide open & the challenges are great as well.
    I think they know the recipes already!

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