Facebook for $6 Billion? Wrong Question
Posted by: Rob Hof on July 12, 2007
Amid a rumor that Facebook is now worth $6 billion to somebody like Microsoft, I think John Battelle gets it right: Mark Zuckerberg doesn’t need anybody now. Through savvy moves like the recent opening up of its service to outside Web developers, it’s seeing a surge of interest from users. Of course, Battelle raises the right question, which is what will Facebook’s business model be? Apparently not traditional online ads, if this report is indicative (and it’s probably not, so early in the game). Dave McClure has some interesting insights, basically that once you divine people’s intent through their Facebook applications, you can provide them… well, he calls it content, but the more cynical among us still call it advertising. But advertising you might actually be interested in. I also like Scott Karp’s idea:
What if there were a way for companies to identify which Facebook users were actually using their products, and then create a mechanism for the users to highlight their use of the product to their friends — and then put those users into the economic value chain.
I’m just making this up — but it’s clear that Facebook and other social networks are in need of the aha moment that happened at Google when someone realized — hey, if we rank the ads based on RELEVANCE as well as price bid, then people would be more likely to actually CLICK on the ad, and we’d make more money.