The Ascendancy of Facebook

Facebook gets crowned this week.

This week the six year old-Facebook will assert itself as a web powerhouse, alongside only Google with so central a place in the web ecosystem. They're announcing a slew of new features to the site and to the developer platform that assert their ambition. Don't misunderstand their ambition, says Om Malick,

To those who view it as the 21st century version of the online ghetto called AOL, you’re underestimating this gang. If Mark Zuckerberg and his troops execute on their plan, the web is going to be a lot different. I believe that Facebook will rival Google’s current domination of the search and online advertising business. These guys are ruthless, unrelenting and singleminded in their quest for success.

And it's true. Facebook has amassed a massive worldwide audience-- 400+ million-- who check in daily on their laptops and mobile phones to update a status, send a message, play a game, connect with a long-lost love or any of the other things that you see fleeting across your screen whenever you check in. And that's just the beginning.



So how is this possible? Isn't Facebook just an online photo album, a gathering place of teens? Well, no.

It's possible for three reasons...

It's got you. It has your time and attention, it's picking up on your habits and it wants to get more. It knows, for instance, who your friends are, where you went to school, what zip code you live in. And it also knows the type of movies and TV shows you like, and maybe even how you spend your money. At their developer conference this week Facebook will announce that they want to collect more data about where you are right now (think foursquare), and what you like on the web.

It's got any and all people who went your attention on the web. Ask any media website where traffic comes from, and they'll tell you that an increasing amount of it comes from Facebook (and twitter to a lesser extent). Five years ago the answer would have been Google search, by a longshot. The rise of "social media" lead by Facebook is changing the way people choose where to jump around the internet. More and more people are taking cues from their friends on Facebook. At their conference this week the company will announce new tools to integrate more of Facebook into sites all over the web-- through a new version of Facebook connect, a chat feature and an elegantly simple "like" button.

It's able to execute. Facebook has the best chance of anyone to pull these things together to dominate the next few years of the Internet, making lots of money through transactions, hyper-targeted advertising and who know what other means. Not only does Facebook have more of this incredibly valuable data than anyone else, they are set up to execute on this opportunity.

Is this good or bad? Probably a little of both.

Here's my scorecard, let me know if I'm missing anything:

• The rise of a true competitor to Google on the web? Good.
• The rise of an open platform that makes it easy to share what you want with people? Good.
• The rise of a company that may stifle innovation, in it's desire to control more(most) of the social pipes connecting the web. Not so good.

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Update: by posting this, I'm admitting that my boredom with Facebook from a few months ago, while honest, didn't represent a good read of the company's prospects. I was wrong.