Saturday, December 16, 2006

Face Value

In early 2004 Mark Zuckerberg launched Facebook at Harvard University. The objective was to replace those traditional printed face books, which have photos and short bios of incoming students. The site was an instant hit, and within a few months it expands to other schools in the area and by the end of the year Zuckerberg had dropped out of Harvard and opened an office in Palo Alto, California. With a staff of eight and they already had over 1 million users. Within another year, most US universities had a Facebook network, the service had expanded to include high school students and it had mushroomed to over 11million users, and included with universities in Britain, Canada, and Australia. Today it has opened up its registration to all Internet users and now has over 12million users. It's not growing at the same pace it did - but only because almost every student in the US is on it.

We have seen the emergence and sale of Friends Reunited, My Space and You Tube and now Facebook’s major challenge will be its sale. Many expect to happen in the next six to 12 months with an envisaged price of $1 billion. The questions are, who will buy it and why? And how will they make money from it?

These community sites all offer data-mining and marketing opportunities with information on demographics, interests, and the social networks of millions - a dream for data lovers from advertisers to government agencies. Interesting, they often lack traditional content and provide a platform for the promotion of new alternative content.

There are several interesting messages to be learned from these innovations. People want to communicate with others and share experiences with what many would regard, complete strangers. This is not new; it was the basis of pen pals, ham radio and chat rooms. However, these services went further and tapped into a common need or interest that worked better over the Internet.

When will there be an older generation community site that promotes their needs? The like of Friends Reuntied has had an older profile, but its focus is very narrow and its new ownership appears to have recently lost its way. We already see that the age profile of My Space has risen and the youth moved on. The success of reading groups begs to move to a wider audience, but perhaps we older generation are more reserved and only wish to share our thoughts to a limited and known audience.

I believe that it will happen but while publishers and bookstores continue to focus on selling and not fully engaging with consumers, it will come from somewhere left field. Meanwhile Facebook will follow in the footsteps of those other successful community sites.

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