Can Facebook sustain it?

2010 belonged to Facebook. Period.

Facebook is currently valued at $50 billion, almost twice the value from the previous year. Facebook’s current user count stand somewhere over 600 million and the count is multiplying like virus, which is an apt analogy given the way how users are brought on board – one gets infected and he infects the other.It is beyond doubt that Mark Zuckerberg has produced a disruptive product in the social media which has made millions of users sign up for it. Facebook has made people spend more time on the internet and on that count alone one can agree that Facebook has caused a paradigm shift in the internet space. But, what will be the state of Facebook (or the social media space) in 10 years? Will Facebook still dominate? Or will it go extinct?

Is Facebook is a fad, fashion, phenomenon or an earthquake?

It is hard to categorize Facebook into any particular domain. It could be a communication tool, a networking tool, an entertainment box (games, videos, and photos), an information source, a sharing platform and so many other things. I guess it should be safe to say that Facebook is more of an entertainment provider?

The demographics of Facebook users would be interesting to analyze. I’m quite sure that majority of the users should be within the age group from 15 to 30. I’m blindly guessing that people, as they grow older, would tend to cut down significantly on their Facebook time, just as with most other sources of entertainment. I agree that it would be foolish to predict this behavior given that it has only been a few years since social media came into existence and we don’t have enough data on our hands to predict the demographic behavior. However, it is hard to see someone use Facebook for a lifetime.

However, the biggest question still remains as “how long people will find it entertaining to ‘like’ or share something?”. While the fundamental human psychology behind sharing is attention grabbing, will a person try to behave that way for his entire lifetime? Will people continue to enjoy Facebook for a longer period of time?

Most of my friends who have been active a couple of years ago, have gone into a state of hibernation and visit Facebook very infrequently. And personally, I’ve started growing weary of the updates that almost always try to be smart, funny or opinionated and I'm pretty sure that others feel the same about my updates. May be, these are signs of things to come. People may eventually find their Facebook experience to be mundane and try to find something exciting. What can Facebook offer in that case?

I’m pretty sure Zuckerberg already knows this. That’s why all the hype behind the launch of Facebook messages (a.k.a gmail-killer). Zuckerberg want users to use Facebook as a utility rather than just a time pass to ensure sustained usage of the system and thereby ensuring continued revenue. It remains to be seen if Facebook can continue to innovate and offer disruptive user experiences on the social media. And that might eventually decide the fate of Facebook.

One thing that I’m extremely glad about is that Facebook has not gone public (i.e. no IPO) in spite of a $50b valuation. At this stage, it is prudent to control the company from inside and make daring decisions which the firm sees as fit. If it goes public, then its every move would be under the scrutiny of the shareholders and internally the firm would suffer from the fear of market-reaction to every major decision it makes. Being controversial during its initial years doesn’t help its cause as well. Facebook shouldn't go public until it is absolutely sure of a sustained revenue model which eventually comes from its offerings.

Google Vs Facebook

One a side note, it is said that Facebook poses a serious competition to Google. Let’s get one thing straight - Google’s primary source of revenue comes from its AdSense program and more specifically from search results. Note that search-engine is a utility product. People are going to search for information regardless of what else is out there in the internet. Search-engine’s importance can only grow in the future and I can’t see any other search engine in the horizon capable enough to unsettle Google from the top.

Learning from its mistakes in social media space through its experiments with Orkut and Buzz, Google has rightly ventured into their next social-media project based on their area of strength – search. Fiddling around with a whole new product in the social media isn't the right strategic decision for Google, particularly after a series of failures in the social media space.

Remember, Google is full of smart people, the one thing that we are not sure about Facebook yet. And this will eventually make the difference.