Facebook: Fad or the future?

Andy Headington - 19th October 2007

In this article we look at one of 2007’s biggest online success stories: Facebook. In less than three years, Facebook has become the number one social networking website in the UK, overtaking the likes of MySpace and Bebo. We take a look at the social networking phenomenon and ask is it a fad or the future?

A quick history lesson…

Social networking first started in earnest back in 2005 when MySpace came to prominence by overtaking Google in terms of page views. Aimed primarily at college students, it rapidly started to gain users by offering a place for individuals to create their own online web pages, simply by filling in a few forms. Within minutes, users could have their own online space and share things of interest such as photos and music with friends and others around the globe. To create a social aspect to the site, these users could also swap messages with each other thus creating a viral element to the website which meant that within a few months, hundreds of thousands of people were talking to each other.

MySpace became a massive success in the US and gradually spread around the world to create a user base of millions. This huge user base attracted attention from several global media companies, seeing the chance to advertise to a specific demographic as a massive opportunity to increase revenue and market reach. Eventually the founders of MySpace sold to Rupert Murdochs News Corp for $580 million in 2005, which, by today’s valuations, seems like a very shrewd piece of business. (One year after News Corp bought MySpace, they did a deal with Google for $900m, which meant they made nearly 100% on their original investment within a year!).

Social networking is part of the ‘web 2.0’ revolution on the Internet. Web 2.0 websites are those in which the users typically control the website content, rather than the website owners. The website is a platform, rather than the content, and it is this control element which users across the world love. Having the chance to create, edit and comment on their own, or other peoples content, gives them all the power and appeals to multiple facets of the human psychology. Websites such as YouTube, MySpace, Wikipedia and many others have been the leaders in the Web 2.0 world, but Facebook now looks set to eclipse their monumental achievements. But will it?

In this article we will look at whether Facebook really is the next big thing, or is it something we all look back on and wonder why we spent so many hours of our life browsing.

Facebook: Fad?

Will Facebook be popular in five years time? We will be fed up of talking to people on ‘walls’? Will the thought of a website knowing all about me, my good times, my bad times, my friends and family become too scary? We look at some of the reasons why Facebook could just be a flash in the pan…

Facebook is boring.

I was first introduced to Facebook by my girlfriend at the beginning of 2007. ‘Andy, you’ve got to get on Facebook!’ she told me many, many times. I couldn’t quite see the appeal at the time. What was the point of a website where all my friends were? What would I get from it apart from more hours spent online? Call me old fashioned but I would rather meet my friends for a beer, than write on their ‘wall’. Eventually, I succumbed, and after a few forms were filled in, I was off.

In case you didn’t know, Facebook works by connecting you with ‘friends’ from around the world. You can only be friends with someone, if they are friends with you, unlike other websites, where you can be ‘friends’ with anyone, like MySpace.

I’d read about ‘tipping points’ before (where messages and behaviours gradually build up until they eventually spread like a virus into the public domain) but I’d never experienced one until Facebook. Facebook definitely ‘tipped’. Within a few months of joining, nearly everyone I knew was on Facebook. My friends count went from a handful to dozens overnight. (Facebook claims to have 100,000 new users sign up a day) I spent hour after hour, looking at peoples accounts, looking at their pictures, reading about what they were up to and becoming ‘closer’ to them.

However, as the months progressed, less and less people who I wanted to become ‘friends’ with started to use the site. I got requests from Iran (?), people who I hadn’t seen or spoken to in years and multiple requests to use the latest zombie add on. I found I spent less and less time on the site, as there wasn’t a lot to keep me coming back to and actually, yes, that beer did taste good, so the real world was in fact a lot better place. Ultimately I got bored with Facebook and couldn’t see the point in going back everyday just in case someone had added a new picture of themselves or me.

I’m sure that this experience isn’t unique to me, and will be one of the biggest challenges to the Facebook growth plans. Currently the ‘active return rate’, or how many people log into Facebook everyday, is 50%. 50%!!! Even Mark Zuckerberg himself admits this is a very high figure and much, much higher than its competitors. He also goes on to say that the cost of communication between people is lower than it’s ever been before and if talk really is cheap, then where is the value in it?

So how will it keep its almost unprecedented interest going? How do you keep people really interested? I’m not sure you can.

Facebook is big brother?

When I first started to speak to people about Facebook, one person told me they wouldn’t use it as they didn’t feel like they needed to use it and also they were worried about a website knowing everything about them; from their home address to who their friends were and what they’d been up to at the weekend.

In the ‘information is power’ age that we currently live in, giving this information to a website which explains very little about itself on its homepage is potentially very dangerous. I’m sure very few people actually know what Facebooks privacy policies are. After all, if my friends use it, it must be safe, right?

As Facebook gets bigger and bigger, more and more people are going to be making connections with each other, to the point that if you could get into my profile, you could easily find out everything about me. This is a massive threat on our own personal liberty and should a security breach ever happen, (like the one at AOL back in 2006) Facebook could find itself with no business overnight.

Additionally, as the rumours increase day by day, that it will eventually get bought (by Yahoo?, Google?, Microsoft? or anyone else), users may start to get concerned about who exactly knows there information. If a massive multinational company (say for example Tesco or Unilever) bought Facebook, they would have access to information beyond their wildest dreams. It would be a marketing executives fantasy. Knowing what turns people on or off and being able to put your finger on the pulse of almost any demographic you can think of, is something which is currently unthinkable. If this information goes to a company which isn’t trusted by its users, or Facebook goes evil, Facebook could see a mass exodus of its users, no matter how many friends they have.

Facebook is old news.

In September 2007, Facebook became the fastest growing social networking site in the UK. How did it manage to do this? One of the main reasons is that Facebook is a lot easier to use than MySpace or Bebo. Additionally, in early 2007 it opened its platform up to third party developers to build their own widgets for the website (a very good strategic move).

However, as Internet connections get faster, and users spend more and more hours online (Internet users currently spend 14 hours a week online), they will come to expect more from their websites. Simply adding pictures and short movie clips may not be enough. If a new website comes along with a killer idea or way of doing things, the droves of users who left MySpace for Facebook, could again up sticks and move on.

Of course, if Facebook does sell part of or all of its business to another company or even go public, it could generate billions of dollars, to copy or buy its competitors. But sometimes money can’t buy you everything, and if people buy into a new way of doing things, which all their friends buy into, we could see the walls of Facebook with very little to say.

Facebook: The future?

We’ve looked at some of the reasons why Facebook might not be all it’s cracked up to be in the long term. However, with a current estimated worth of $10 billion up wards (up 100% from a year ago), they must be doing something right and have something to build on for such a staggering valuation to be placed on them. Here we look at some reasons why Facebook could be here to stay…

Facebook is your online home.

Increasingly for many Facebook users, their first activity when they go online is to logon to their Facebook profile. Checking their inbox, what their friends have been up to and seeing new pictures of themselves, are just some of the reasons people go online in the first place. Facebook is now the first point of call for a lot of users, rather than something that people do when they have time. Facebook has such a pull that it can be the only place that people go when they go online.

The messaging service which is built into it is also a killer feature of the site. Why go to your Hotmail, Yahoo or any other email account, when you can message your friends by clicking on their face and sending them in a message instantly. No more spam, no more incorrect email addresses and no more passwords. Your email account is now almost redundant.

Add to this, the increasing number of applications which are being built by third party developers for Facebook (anything from online poker to zombie biting!), and the possibilities are almost endless. By opening up the Facebook platform and giving third party developers the ability to tap into their audience, Facebook have managed to create much more than a social networking site. More and more companies are developing Facebook add-ons to try and take just a small slice of the Facebook pie. As the breadth of facilities available to Facebook users grows, more and more people will find that their online experience ends up being in one place.

Facebook to beat Google? (and the rest)

If (and it’s a big IF) Facebook becomes the first or only place users go to online, it is quite feasible that they can start to exploit their user base to beat the competition. At the moment, a large majority of Internet users have Google or another search engine, as their home page. What if people were to start to set Facebook as their home page? Would Facebook beat Google?

What if Facebook offered a great search service which their friends had an input in? Search results could be generated by the whole Facebook community which would have the credibility of user review and approval, rather than clever algorithms. The mixture of search and community could possibly be a Google killer.

If Facebook could build on their community of users to copy or better the services of their rivals, we could start to see the beginning of the end for many current house hold names on the Internet (remember, search engines like Excite, AltaVista and Yahoo once dominated the search market back in 2000 and in 2007 Google has 77% market share!).

Facebook is addictive.

Friends Reunited logo

Remember back at the beginning of the decade when a small website set up by a husband and wife ended up becoming headline news? Friends Reunited was one of the first success stories of the Internet to hit the mainstream. For a small fee (around five pounds per year) people could go online and connect with people who they hadn’t seen since school. Back in the days of dial up, this was something that people would use for amusement rather than anything serious, mainly because it was a pain doing anything online in those days due to slow connections.

Unlike Friends Reunited, Facebook is aimed at keeping people in touch rather than putting people in contact with long lost friends (although it is increasingly being used in this way. I receive at least one request a week from people who I haven’t seen for at least ten years, and indeed I was invited to a school reunion recently which I was unable to attend…). The multitude of tools available from writing on walls, sending messages and sharing photos, mean that when events take place, everyone in your world will eventually know about it. Your online place is now an extension of your personality. Ok, there are other services available which offer this same method of online communication (part of the success of MySpace was built on the ability to customise the look of pages) but with a strong and seemingly loyal user base (50% of Facebook users login everyday), people are happy to regularly use Facebook to share their experiences online.

The whole Facebook experience is aimed at increasing relationships, shown by the amount of screen space taken by ‘friend’ features; random friends, photos you’ve uploaded, top friends list, the options are endless. But a large part of the Facebook experience appeals to the narcissistic side of our personalities. Seeing who knows who, how many friends I have compared to someone else, checking up on people who you haven’t spoken to in years, all from the comfort of your PC, is a strangely powerful experience. Subconsciously, we love the power this gives us and it is this power to keep tabs on other people at a distance which keeps people hooked. There are even people who claim to be addicted to Facebook, so even casual users have a reason to keep using the service, even on an ad-hoc basis. It is this appeal, and the subtle which Facebook presents itself, which could see Facebook keep and increase its user base.

Conclusion

Facebook is undeniably one of the biggest websites in the world in terms of users and valuation. Everyday, 100,000 new users create a Facebook account and Facebook now has one of the biggest libraries of photos on the Internet and gets TWICE as much traffic as all of the other photo websites in the world combined! More and more people spend hours on the website and as more and more applications are added, the possibilities become greater and greater.

Where does Facebook go next? Does it go for the big shot and try and take on Google? Does it consolidate on its user base? Does it try and go for the business market by taking out LinkedIn? Does it sell for billions and make Mark Zuckerberg (the founder) one of the richest men in the world? What happens when the social graph spirals out of control? The future remains bright and the online news websites will continue to write about its current favourite to second guess what will be next.

I believe that we will see Facebook try and explore more and more avenues and align itself with several key players in the future to ensure it continues its growth. Security and privacy will become increasing issues as more and more services become available and care must be taken to ensure their isn’t a lapse. Get it wrong and it could be game over.

However, I believe that despite the potential problems it faces, such as those highlighted here, we will see Facebook grow and stick around for years to come.

Facebook: Fad or the future?

Facebook: Fad?

Facebook: The future?

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