Mark Up Pricing?

It’s been just over a month since Facebook wrested the #1 position from MySpace in terms of unique visitors to the site. That’s in spite of being only about half of MySpace in terms of traffic and having to deal with Orkut in India, Brazil etc. This, plus the fact that Facebook’s international strategy of providing the same networking tool in other countries (the only occassional concession being language) is working better than MySpace’s game of ‘communities based on local culture’ in each country – check this out in  (in India’s case), made me do a double take when I read an article recently on how Facebook should seriously consider selling out now.

While there have been debates about MS valuing it at $15 billion, and I’d side with those who say that its a tag on the higher side, I really couldn’t agree on the selling off idea. The basic premise of the argument is that once the high school and college kids (the audience driving Facebook’s exponential growth) grow up, they’ll find better toys and shiny objects to play with, and will forget Facebook.

I’d have agreed with that, but or a few factors. For starters, the way Facebook is adapting. I’d written about the new design earlier, and how Facebook had kind of ditched the old social networking premise, and quickly changed to a Friendfeed/Twitter premise of conversations. That kind of flexibility, combined with the kind of apps that keep me engaged, should help Facebook remain relevant. What, for example, prevents them from doing a ‘Second Life’ twist if virtual worlds suddenly became an even bigger rage? The traffic and the apps, I’d think have a strong correlation which benefits Facebook. The more people use the site, the more developers would want to build apps there…

Another factor is that it still has miles to grow. It’s only #2 in the US, and in markets like India, where the internet itself hasn’t reached its potential, the kind of activity we’re seeing now is not even the tip of the the berg. And what’s the investment? Unlike MySpace, which has an office for India ops, Facebook just invests in Mark Zuckerberg’s flight tickets for his rare visits. (Its an interesting read..lol)

The third factor is Facebook Connect, which will allow the portability of our social identity on it. A ‘crude’ indicator of its impact would be how you can comment on this post and it would link to your Facebook profile. It means that Facebook knows and can keep track of the real you even outside the walled garden it used to be. And that, IMHO, combined with the MS association which keeps getting deeper, will really enable it to challenge Google and its plans for world domination.

And though I was mildly irritated by their inclination towards the BOSS (Build Operate Sell Stake) way, I remain a huge Facebook fan, as the tags on your right would prove, and still believe that Facebook’s biggest success is that, at a basic level, it allows me to connect with people, on the multiple interest points that i share with them, from Bollywood to F1 and quite a few others, and after they’re done with sending me virtual beers and throwing sheep at me, we can really sit down and have some great interactions on things we are interested in.

until next time, break the walls down

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