We, human beings, are social in our very nature, but never before this social. With the help of internet and its social networking services, we are easily connected to each others daily lives.
The leader of the so called social media is Facebook, Palo Alto (CA) with its 200 million active users. According to comScore Inc. News Corporation’s MySpace is in the second place with about 130 million active members.
But the success has not come easily to Facebook. The company, founded 2004, has experienced many setbacks during its way. Several times the users have rebelled against Facebook’s redesigns, copyright demands, and the use of private information. But the young guru of the company, Mark Zuckerberg, 24, has been able to sustain the most valuable asset of the social media, the trust. By hearing the complains, admitting the mistakes, and reversing its harmful decisions, Facebook still exists. Moreover, this humble, quick to learn behaviour indicates a great future for the company.
However, there is still one big open question to be solved: How to find sustainable business models for social media? The latest news/rumours about Google’s video sharing service (claimed to be the second biggest search engine in the world), YouTube’s, financial problems are alarming. According the Guardian (9.4.2009) an analyst with Credit Suisse, Spencer Wang estimates that the video site is due to lose $470m this year – Google bought the video sharing site for $1.65bn in 2006.
Facebook’s greatest “inventions” so far has been its news feed and the storage of open source applications. According to Venture Beat (8.4.2009) in December, Facebook said that more than 660,000 developers from more than 180 countries have built apps for the platform, with some 52,000 apps currently available.
It is likely that Facebook needs still more funding, and time to find its best revenue models. Many experts have predicted that the next step for Facebook will be - a listed company. In other words, following the steps of the Big Brother, Google.
CNN.com: Facebook nearly as large as U.S. population (16.9.2009)
"The news that Facebook has tripled in size in the past year has grabbed headlines, but the real news was that the social network is now - in Mark Zuckerberg's words - "free cash flow positive". That piece of accounting jargon indicates that, after more than five years, the site has taken the first major step towards becoming an honest-to-god profit-making company and (perhaps) indicates that a stock market launch could finally become a possibility."
The Guardian: How exactly is Facebook making money? (16.9.2009)
MediaPost: Facebook could face Friedster's fate (3.6.2009)
BusinessJournal: Reports: Facebook rejects funding at $4B, $2B valuations (16.4.2009)
TechCrunch: Decision Time For Facebook: Term Sheet Received At $2 Billion Valuation (15.4.2009)
The Guardian: Facebook now accounts for one third of all online social networking time (15.4.2009)
"By allowing a torrent of status updates into our Facebook pages, the company has destroyed what made it special: its ability to construct a constantly updated newspaper about us. With Twitter-like updates, the site has lost its intimacy, flooding us with a lot of white noise."
OmMalik/GigaOm: Facebook: Population 200M, Faces an Identity Crisis (8.4.2009)
"On the questions about Facebook's business strategy: "It's a really simple answer, which is that our business is advertising. We're not waiting to find our business. We found it, and it's actually working very well."
Business Week: COO Sheryl Sandberg on Facebook's Future (8.4.2009)
Mercury News: Facebook reaches 200 million user mark (8.4.2009)
Venture Beat: A look at Facebook's latest statistics: More status updates? More content sharing? (8.4.2009)
Facebook/Mark Zuckerberg: 200 Million Strong (8.4.2009)