Sunday, November 11, 2012

Facebook’s Closed Strategy

Facebook brings together over a billion users from around the world. Founder Mark Zuckerberg was named Time magazines ‘Person of the Year’ because his website changed the world for all times to come. After the IPO in May 2012, the company has come under a lot of pressure with shares falling below half the original price. However, none see the website as becoming weak any time soon.

Facebook is different from Google. It has a closed environment. The strategy is to keep Facebook users within the Facebook borders. Every new product Facebook offers is integrated within the platform and can only be access from within the Facebook website.

If you compare this to Google, they have a line of products available that use a Google account, but are not bundled together. You have the ability to use Google search while using Yahoo! Mail and Windows Live as your instant messenger. However, once you log into Facebook, your messages, instant messenger, photos and calendar is integrated within your Facebook homepage. When Facebook rolled out email addresses, many claimed that this could be a Gmail killer. While that did not happen, it might have been a first step.

Having said all this, some analysts believe that Facebook’s dominance will end within a decade. Eric Jackson, founder of Ironfire Capital, believes that just like Google has problems entering the social networking domain, Facebook will have problems moving to the mobile. If that is true, the users would be hard to monetize, which could lead to a thinning of the Facebook model.

Do you think that Facebook will continue to evolve to maintain its dominance? Do you think social networking websites are here to stay or will they phase out within the next decade? Do you feel that the closed strategy that Facebook has adopted will be helpful in the future? Do you think that Facebook’s move to the mobile will be smooth, based on their mobile strategy today?


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