It will take years for the DOJ to be done with Google. Give Facebook some time!
I agree with Facebook board member Marc Andreesen's assessment: Facebook could be profitable and make over a billion in annual revenue whenever they choose. Instead, they're forgoing that for bigger riches -- and even more entrenched market power -- down the road. Facebook understands the game they're playing.
Facebook users face higher switching costs than Google search users. And individual features in Facebook -- photo sharing, status streams, comment threads, group utilities, invitations/RSVPs, instant-messaging, etc. -- already compete against multiple other companies.
When Facebook turns on their revenue spigot -- whatever it turns out to be -- they will look a lot like Google, in the same ways the article highlights. They will be subsidizing a bunch of free services, to the detriment of potential competitors, to defend their master proprietary asset -- the social graph plus a critical mass of users -- and the massive revenue that flows from it.
I'm curious, do you know when Andreessen said that? Because two years ago I would've believed it, but now I just don't buy it.
Beacon was supposed to be their adsense and look how that turned out. I don't doubt facebook's potential, but I do doubt that there's a switch that they're just waiting for some magic user count to flip.
According to Alexa, Yahoo gets a little less than twice Facebook's traffic. Yahoo's revenue for 2008 was $7.22B. So yeah, $1B+ for Facebook from conventional ads is probably reasonable.
I agree with Facebook board member Marc Andreesen's assessment: Facebook could be profitable and make over a billion in annual revenue whenever they choose. Instead, they're forgoing that for bigger riches -- and even more entrenched market power -- down the road. Facebook understands the game they're playing.
Facebook users face higher switching costs than Google search users. And individual features in Facebook -- photo sharing, status streams, comment threads, group utilities, invitations/RSVPs, instant-messaging, etc. -- already compete against multiple other companies.
When Facebook turns on their revenue spigot -- whatever it turns out to be -- they will look a lot like Google, in the same ways the article highlights. They will be subsidizing a bunch of free services, to the detriment of potential competitors, to defend their master proprietary asset -- the social graph plus a critical mass of users -- and the massive revenue that flows from it.