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Future of Facebook

Updated on February 22, 2014
jonathanago profile image

Author, Entrepreneur, & Hacker. I've spent the last 35 years living life and analyzing the things that are around me. Founder of Abacab Ltt

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Facebook's Future

To truly understand facebook and its downfall, you must understand the social networking industry. Many would believe, it began with Myspace, but it started long before Myspace, Friendster. It all began with AOL aka America OnLine.

When the Internet was transforming into a place of commerce, the average internet user were mostly college students who used it to share information regarding educational topics. There weren't many websites as they are today and many of the sites were mostly educational. AOL created the true first social platform, where you can go online, read your mail, check the news, surf the web, chat with friends and make new friends. AOL was the Internet long before the Internet became the Internet as we know it today. AOL paved the way for many of the sites that we take for granted today. At present, AOL is just a shell of its former self seeking to transform into an online media company.

AOL uniformed the Internet to make it user friendly, as many computer users of the 90s weren't computer savvy as they are today. The social platform was the key to their success and they are credited with Introducing the United States and some parts of the world to the Internet. But their dominance faded as broadband took place and now they are considered a joke to many outsiders.

AOL wasn't a social networking site, it was a social networking platform. You had to install their CD from the thousands they would send yearly to each household. I know I am exaggerating on the numbers, but they sure did send alot of CDs. It was their platform that made the Internet easy and the Internet without AOL was alien to most people.

The first true social networking site was theglobe.com. It allowed users to communicate with friends, make new friends, and provide updates. It was the Atari of the Social Networking Industry. But like Atari, it faded fast and it is now just a name owned by some surviving investors who took control. Consider theglobe.com, social networking beta. A noble experiment that was too early for Internet technology of that era.

The first website to gain traction for the social networking industry is friendster.com. They were the first social networking site to gain 1 million users and they showed Myspace and even Facebook how to become a social networking site. Unfortunately, their popularity didn't peak beyond 5 million users and are now owned by some asian company as a social gaming website.

Myspace popularized social networking. They created the true social networking platform that facebook enjoys today. Hands down, youtube owes its early success to myspace. Myspace made social networking cool and everyone and their mother began making their sites or starting up social networking sites so they can rake in on the venture capital money that was being thrown into social networking sites.

Myspace had the app plugins for Zynga to popularize their games and other app developers to profit from Myspace's popularity. It can be said, Facebook is just emulating Myspace's tactics. Myspace's downfall is News Corp. They were purchased by a media company, nonetheless an old world media company who had no real idea on how to manage a digital media company. They commercialized Myspace and hardcore social network users had only one other option, go to Facebook. As they aren't commercial, yet.

Mark Zuckerburg must have known that myspace's downfall is commercialization. It explains why he has been hesistant to make Facebook too commercial. This belief allowed facebook to grow into the giant. He also emphasized into turning Facebook is a social catalyst where other websites can benefit and profit from. This social catalyst differentiated Facebook from Myspace. Other than that, Facebook is emulating myspace, even down to the commercialization.

Last year, Facebook was worth $100 billion dollars, it went IPO, the IPO failed and dropped 60% of its IPO value price. Investors were fleeing and everyone were talking about the social networking apocalypse. Companies like Zynga, and Groupon were feeling the harsh effects of Facebook's downfall.

What changed before 2012 for Facebook is that Facebook is a public company. The senior managers have a fudiciary to make the shareholders money by making the company profitable and to increase revenues at all cost. Investors are in the money business, if Cocaine was a legal drug, Pablo Escobar would have been the CEO of the largest publicly traded Cocaine distributor of the world with shareholders pressuring him to find ways to get new cocaine addicts to increase revenues and profits. If Pablo failed to deliver, I can guarantee you the major shareholders would have expelled him faster than a cocaine addict experiencing a withdrawal.

Shareholders don't really care about product and your vision. All they care about, is it going to make me a profit and if so, how soon. Shareholders invest into your company for that reason, to make money. They don't want to hear excuses. Even though, Zuckerburg has control of the board and majority of the voting shares, he still needs to produce for the shareholders. Meaning, reluctantly turning facebook into a commercial platform. If shareholders flee Facebook, its stock price will plummet resulting to an activist shareholder such as Daniel Loeb or Carl Icahn to rally up angry shareholders, take Zuckerburg and the board to court and just simply state, "Zuckerburg and the board are not acting in the best interest of the shareholders" and voila, Zuckerburg is booted off the company the founded. Many think is bulletproof, but he's just bullet resisted from his shareholders. There are ways around to circumvent his power.

Now, the commercialization of facebook also means, its death. Facebook are now showing banner ads, something that is new and contradicts Zuckerburg's non-commercialization of facebook, but he needs to produce to shareholders and raise revenue as best as he can. Unfortunately, he couldn't do something as subtle as google with their ads.

Even before, these new banner ads, facebook's users are not spending as much time on the site as they use to. They inability to convert facebook users into mobile users have failed. Facebook's new mobile app is considered a failure by most critics, and facebook's future begs to question.

Social Networking isn't dying, as long as there's a civilization there will be a need to communicate with each other. Facebook will be around just like Yahoo and AOL, Facebook will act as the social catalyst for other social networking platforms. After all, a billion users don't just drop overnight.

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