The Irish
Times - Monday, January 30, 2012
UNA MULLALLY
THE SPOTLIGHT is rarely off Facebook, but reports that the
social-networking company is planning an initial public
offering (IPO) in May have started a serious conversation about
how much Facebook is worth and how much it can raise with its
stock market flotation.
But there’s a bigger story happening in social-network land.
Facebook’s IPO comes quite late in the day. With unprecedented
growth to 800 million users in eight years, Facebook has tough
questions to answer about where it goes from here. The site has
become so embedded in so many people’s lives that the
excitement surrounding it is ebbing.
Social networks, once the web upstarts, are now the norm. The
buzz previously reserved for social networking has moved to
mobile, tablet devices, trying to make geo-location networks
take off and trend-watching the game layer. So how do you push
an industry forward when everyone is so used to it? Last
Wednesday Facebook announced changes that would bring new apps
to a user’s timeline, including Ticketmaster, film website
Rotten Tomatoes and TripAdvisor. It’s changes like this that
Facebook hopes will keep a grip on its users. Why leave your
page when you can access even more information on it?
Damien Mulley of Mulley Communications says Facebook is “at 80
to 85 per cent saturation of internet users in most countries
they’re in, so that last 15 per cent is going to be very hard
and very expensive to reach”.
Facebook has become the norm, making more dramatic expansion
hard, says Mulley. “If I go into a business now and say ‘you
should be on Facebook’ they turn around to me and say ‘duh’.
It’s standard now. That said, less hype could be good for
stability. Their issue now, with the users that they have, is
how to squeeze more value out of those users. Right now, it’s
just advertising. They’ve played around with check-ins and
location-based stuff. They tried their own version of Groupon
last year, Facebook Deals, and they’ve kind of cancelled that
now. The big worry is that they’ve grown so quickly.”
Programmer and internet activist Aaron Swartz, who founded
online lobbying group Demand Progress and was an early employee
and co-owner of social news website Reddit, says conversations
about the downside of Facebook are on the up. “Most people lead
busy lives and don’t have time to be affected by most things in
their lives or think about them, but there’s an increasing
amount of attention to issues surrounding Facebook.”
Swartz talks about “nymwars”, the debate stemming from policies
of social networks that instruct those signing up to services
to use their real names, raising issues of privacy and
identity. “Suddenly most people who didn’t get involved in
these discussions did, and it was a big deal,” Swartz says.
“Right now on the internet, you have an independent
relationship with these sites, and on the Facebook model,
they’ve become the platform that underlines all of this
[information], so you can only have one Facebook account to use
all these applications, so it kind of becomes like the Apple
store, and if any application is inappropriate it gets shut
down. There’s a huge amount of money to be made, but there are
dangers as well in terms of how free that information is.”
The fragmentation of social networking has begun. Mulley
mentions Path, a photo-sharing network not dissimilar to
Instagram, as a growing area. “The other crowds [social
networks], described themselves as a ‘Facebook for this, a
Facebook for that’ offering the same suite of services,” Mulley
says, “whereas Path, Instagram and so on are about taking
photos and sharing with a small amount of people. It will just
fragment like that. Facebook is an entire industry and when
people come in they can disrupt the industry. The ‘we’re not
Facebook’ is probably going to be the big thing, and Facebook
will probably just buy them . . . I think the cool kids are
going on to other places. That ‘first mover’ kind of stuff was
Facebook for a while, but now it’s just like everything else.”
While Facebook’s IPO is a big deal, lessons have been learned
from the less than epic IPOs of firms such as Zynga and
Groupon. As Swartz puts it: “There will be this crazy
excitement about Facebook finally IPOing, then the reality will
finally set in and people will start looking at the numbers.”
More:
Facebook floats, but has social networking passed its peak?
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