I have been following debates on Facebook and about their failures their inability to be profitable and all that while some people have their suggestion on how Facebook can make money. I have always thought that Facebook knew what it was doing and was only bidding their time. Events changed that thought
- The redesign of Facebook: Facebook’s redesign to have the ‘real-time’ nature of twitter gave credence to Facebook’s insecurity about the popularity of Twitter and also their attempt to buy twitter
- The report that Facebook wants to make money selling Vanity urls. e.g http://facebook.com/Oo
- TechCrunch story about Facebook new business model being to sell virtual gifts! That actually was the last straw. Since Arrington rarely get his stories wrong (ass kissing here), I took the tale with a hefty spoon of salt.
Consequently, because I love Facebook, I have decided to write publicly my own ideas of how Facebook can redeem itself and become profitable company to be taken seriously.
My understanding of Facebook:
The present basic offerings of Facebook, gives it the potential to be a leader in over half a dozen somewhat profitable industries. Facebook has basic framework on which several applications (Facebook’s Apps) have been built upon. These applications have proven to be profitable independently as businesses. I’ll describe what I mean below.
The basic constituents of Facebook includes but is not restricted to the following.
The Framework, AKA Social Graph: The FB Framework/Social Graph is its most important asset. It consists of user’s profiles (Name, sex, email address, Education history e.t.c) and most importantly, creating a link with other users (friends). It is upon this framework that everything else is built. It has 200 million available users to give anyone of them
The Apps:
I’ll just show the similarities between them and existing services that are business.
1. Notes: This is fundamentally a blogging software/tool. There is little difference between what Notes can give you and other Blogging apps like Typepad, WordPress and Blogger can give
2. Photos: This is a picture hosting and sharing utility that is no different from what can be obtained from Flickr and Picasa
3. Videos: Like above, Facebook video has fundamentally the same service as YouTube.
4. Marketplace: Classifieds just the same as Craigslist
5. FB mail: This is Yahoo! MSN, Gmail without attachments and Forwarding. (Two lines of code can take care of this)
6. Chat: Facebook Chat serves the same quick exchange of messages just like any of the Messengers (Yahoo, GTalk, MSN)
7. Forum: this is a disorganized and incomplete attempt at having an online Forum similar to what is provided by PhpBB et al.
8. Events: This is an event management application just like eventbrite
9. Link Sharing: This is similar to what Digg does.
10 Facebook Status : = Twitter
I am sure that I must have missed out some applications that are similar to fully fledged businesses online. From the above you will see that Facebook is a jack of all trade and master of none, right? WRONG! They have the most important thing, the Framework/Social Graph of over 200million users to make any application available to. With the exception of the Email service (Yahoo!) I Dare say that no one has nearly has much people to plug these services to.
THE WAY FORWARD:
1. STOP FOLLOWING TWITTER: it is so easy to get carried away with the recent hype all around Twitter but it will be shameful for Facebook to change the whole way of doing things for a company that provides 1/10th (based on my list above) of the services provided by Facebook, and has about the same fraction of users . The whole ‘real time’ obsession takes away the personal interaction that Facebook is supposed to give.
2. SEARCH! SEARCH! SEARCH!: Without the ability to filter through content, it is useless, Pictures, Videos and notes should be tagable (not names only) and searchable. There is no reason I cannot see my status updates from last week or search through my friend’s contents, wall, updates and otherwise. If you interchange first name and surname you do not see who you are looking for. I guess the difficulty stems from the alliance with Microsoft (who are poor at search) instead of Google. But Twitter did not need Google to get search right, they simply bought Summize
3. CREATE PREMIUM ACCOUNTS: Facebook should start focusing on ‘serious’ users by stepping up the services they provide for a little fee. People will pay. People can subscribe for these services individually and as an added bonus, it could have “premium Facebooker”. For example:
- Facebook Photos: People will keep going to Flickr or Picasa (like me) when they want to store serious pictures. I can hardly see the value of providing people with the ability to create unlimited albums when they fill it with 300 pictures of themselves making funny faces, different poses of their cat. Let people have the ability to host 1GB free (any quality of their choice) and pay for upgrades!
- Blogs/Notes: You can permit premium account holders to tag unlimited people to their notes and people could subscribe to their notes.
- Videos: It would be difficult to compete headlong with YouTube but for heaven’s sake facebook could serve ads in the videos uploaded! This boils down to the search issue and proper organization of videos.
- Events: Since this is my interest, I would hate for Facebook to be successful in this, so I’ll let it pass .
providing these services for free will put no pennies in your pocket, therefore do not upgrade when it will not even be appreciated.
2. ENCOURAGE PERSONAL FILTERING: I have about 1400 friends (A lot of people have over 500) on Facebook and unlike what Facebook would like to believe, I personally know over a thousand of them. To simplify my interaction with them I categorized them in groups (ManU fans, Sec Sch Friends, Family, neighborhood friends, My Different Univ, Friends, politically Oriented e.t.c) unfortunately, these grouops become useless once they reach 100. I cannot invite them all to an event even if the event is targeted at a group only. When I put up a political/soccer note or picture, I should be able to tag evrery one of them with a single click. It is left for them not Facebook to determine if it is a disturbance or not.
3. DEVELOP NETWORKS: This is the most brilliant thing that Facebook had and has unfortunately started turning away from developing it. The potential for creating Facebook networks is unlimited. People keep saying that Facebook is unprofitable outside the US. Why would it not be if countries outside the US are not as structured as that of the U.S. Severally, I and so many others have tried to target advertisements to people in certain places in Nigeria but a country of 36 states has only two Networks, Lagos and Abuja. Consequently, the difficulty of targeting has made it of no use trying to use the ads service. The next point explains this further.
4.COUNTRY OF ORIGIN NETWORK: I wrote a mail (link) to Zucky through Facebook about this (of course he did not reply). I come from a top emigration nation. What this means is that a HUGE majority of the Nigerian internet population (likewise other emigration nations) do not live in Nigeria. And because Facebook lets you join one ‘location network’, most of my Nigerian friends on Facebook are either under London, New York or some other country. Can you imagine if Facebook could target all the Chinese, Nigerian, Mexican, Indian and Phillipino’s living outside their countries? Imagine what you could do to target the billions in remittance. Yes, I am saying you guys could create your own PayPal!
5.LISTEN TO YOUR USERS: Mike and Scoble are quick to point out that revolutionaries do not listen to their users. Some say if the Henry Ford asked users what they wanted, they would have said a faster horse or Steve Jobs would never had made the iPhone if he listened to users. THIS IS TERRIBLE TERRIBLE ADVICE. One thing to be noted is that in introducing these products there weren’t users to offend so they could do what ever they wanted. What people fail to say was what happened when the users wanted other colors of the Model T and Henry ford refused. If Steve Jobs was truly headstrong and immune his users complaints, he should have left out ‘cut and paste’ in this the latest upgrade. You can do what you like before people start using your product, once they start using your stuff, they hold the key. Go and ask my Uncle Gates what happened when he tried shoving Vista down our throats.
For this to work, Facebook should focus on developing the framework and then having each of the apps I have listed above to try and function as independent companies or get the experts (PayPal, e.t.c) to develop the Apps with partnerships just like Meebo and MyYearBook and probably get some sort of commissions.
To Zucky: CEO’s work is distracting and Facebook has reached (and passed) the stage where an experience executive should come in to handle time consuming issues that running a business as big as Facebook entails. We agree you are ‘The Face’ of Facebook but it is now time to focus completely on product development and keeping the Facebook vision on track. You can but have the voting power to be in charge.Even though Larry and Sergey were two when they were serious about taking Google to the next level, they brought in Eric Schmidt. I wonder where Google will be today in they did not make this intelligent decision.
All the best Facebook!
Oo Nwoye, KCOB. (@OoTheNigerian)
*If Facebook can crowdsource for translation why cant they crowdsource ideas? It seems they have taken this route with this