Facebook after a long period of being out in the cold, recently opened up its platform. Since then, it seems to have caught fire and today appears to threaten to Google’s (and all other social networks) bread and butter (Adwords) from a new unexpected direction. Google has had Orkut for years but has done little with it. It is slow and clunky and used mostly in Brazil and India.
On the other hand, over 5000 developers made their applications available through Facebook (don’t miss the hot “Techniq eLearning” application) and this list of applications continues to grow. Unlike Google’s conventional search play, Facebook has oodles of information about people, their social networks, like and dislikes etc. Having suddenly attracted a host of developers and end users, Facebook was now uniquely positioned to take on Adwords by selling adveristising. Thus, in a fairly short span of time Facebook stole a march over the one-dimensional social networking LinkedIns, Plaxos and the Nings of the world. However, things really got heated up after big brother Microsoft stepped in and bought a stake and did an advertising deal with Facebook.
Facebook started its advertising foray with simple “flyers”. Its kind of like a black hole. You create your an ad and pay for it, and Facebook displays the ad a pre-determined number of times. If someone clicks on your ad, consider yourself lucky. That was the start. Now Facebook has Flyer pro which follows a pay per click model. Clearly the sophistication (reporting and other bells and whistles are lacking) in Facebook’s ad platform. In fact even simple features like the ability to edit an ad once its created are lacking in Facebook. But its improving by the day. The best part about the newly introduced Flyer pro is that you can target ads based on a host of parameters like city, age group etc. Everytime you select one of these parameters the target number of users updates on the fly! This is very powerful when compared to what you can do with Google’s Adwords of today. Further, by partnering with Microsoft, Facebook has threatened Google where it could really start to hurt.
Enter Open Social. Its now all about democracy, a level playing field, mother of all APIs and what not as far as Google and other social network sites are concerned. As the NY times rightly put it Google and Friends are ganging up against Facebook before it becomes too powerful. For now, Facebook has a clear headstart. The Open Social idea does make sense in theory, however. As a developer I don’t need to port my application to each social network that comes along. But as an end user do I want every single social network out there to have access to all my private data?
Finally, there is a tiny window of opportunity to challenge Google’s virtual internet advertising monopoly (and GOOG topped $700+). The bad news is that a the monopoly from Redmond is the force behind this new challenge!
Pakora Korner 