September 27, 2006
@ 08:00 PM

Kevin Briody has an excellent analysis of the recent move by Facebook to branch out beyond the college crowd in his post entitled where he writes

I actually started writing this a few weeks back, when news first broke of Facebook branching out from an exclusive membership model, presumably to take on that Wild West of social networks, MySpace. But given the news that this move is a reality, today, thought I would throw my commentary into the mass that is no doubt being written.

This is a Bad Idea. A classic example of inappropriately twisting a business model to justify investor demands and market expectations.

As I have said before, I love the original Facebook business model. It takes a reasonably cool set of social networking features and a clean UI, and marries it with a hyper-social, hyper-active, local, offline set of communities, i.e. college students clustered on their real-world campuses.
For that community, Facebook didn’t force them to separate their social interaction between online and offline - it married the two in a nearly seamless manner.

The site became a way of life for US college students, and even faculty, with use and stickiness numbers that would make most Web-based businesses drool. Facebook nailed the campus social networking experience and achieved fantastic audience penetration, and needed to take the next step.

That next step should have been development of their monetization strategy (deeply targeted advertising for US college students). Focusing on revenue and profit, while continuing to enhance the user experience of their core market.

I agree 100% with what Kevin has written. The Facebook folks have a lock on a very lucrative audience and should be spending cycles figuring out how to (i) keep this audience happy and (ii) monetize such a juicy demographic instead of trying to justify their billion dollar valuation by going up against the MySpaces and Friendsters of the world. Now they have to deal with the potential backlash from their core customer basse as well as the fragmentation of their user base. These are both tough problems to deal with if they crop up.

I suspect the best thing that could happen is for this to fizzle like the move to open up the site to corporations. Otherwise, things could get ugly. I wish them luck, especially now that I know at least one person who works there.