2007 was a watershed year for Facebook. It wrestled the title of top social network away from MySpace and advertisers swarmed to it, all trying to reach its highly desirable 20 something, educated user base.
So how did Facebook do it? Well one reason for Facebook’s success was its decision in September 2006 to let anyone join. Previously Facebook had been open only to college and high school students. This decision was not universally met with enthusiasm when it was announced. But 12 months later Facebook had grown from 12 million active users to 50 million, proving that Mark Zuckerberg knew what he was doing.
But it is more than adding active users that has transformed Facebook. Jeremiah Owyang, a Forrester Research analyst, said Facebook simply allows people to create networks that encompass any part of their life, rather than just a narrow part like their work or friends.
“Facebook is a platform that allows a lot of facets of your life to come together for the first time,” Owyang said.
This platform has been great for brining people into Facebook. The problem I am hearing from Facebook users is that when they are on Facebook that they have no commercial intent. They are their to socialize and network. This is a potential long-term problem for Facebook in that advertisers need to see some sort of ROI or they will look to spend their money elsewhere.
One way that Facebook has encouraged its users to interact with advertisers is through its Facebook platform. The Facebook platform allows third-party developers to write applications so that users on Facebook could do everything from play games with each other to exchange virtual drinks. That move spawned a whole new industry of Facebook applications, with thousands having been created already.
Speaking about Facebook applications, Zuckerberg recently said, “We’re going to work on this for years,” he said. “It might take 10 years before this is a mature platform.”
That’s in part why the far wider embrace of social networking by business and culture will likely affect the way Silicon Valley operates for years to come.
“Most marketers are now looking to incorporate social media in their markets,” Owyang said. “So this is just getting started.”
Facebook will be under pressure from MySpace and LinkedIn to 2008 to maintain its status as the top social network. If it is to continue its reign, Mark Zuckerberg needs to figure out how advertisers can create a positive ROI in his network. If he cannot, we will be writing next year about the fall of Facebook.
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