Facebook is the Microsoft of Web 2.0
August 10, 2009
With the acquisition of Friendfeed, it’s clearly obvious (if it hasn’t been for awhile) that Facebook is the Microsoft of Web 2.0.
From patterns like buying innovation (Friendfeed, Parakey) to adopting the features of it’s perceived competitors (recent change of status updates to being more of a “feed” like Twitter), Facebook is acting a lot more like Microsoft – or any large corporation. At the end of the day, the rules of business still apply whether you’re wearing Brooks Brothers or Birkenstocks. Let’s talk about that.
You think there wouldn’t be such focus over a company that only had $150 million in revenue last year (notwithstanding that the whole vociferous internet community uses them). To give you an idea, local (to us) computer services company Compuware has 1.2 Billion in annual revenue as of 2007 and cleared what Facebook makes all year… in profit. Salesforce.com did one billion in revenue in 2009.
In short, Facebook isn’t a true financial success… yet. But that’s like Microsoft, too.
Facebook hasn’t found their “key” product yet – but there’s a lot of venture capital money saying it will. Microsoft didn’t make their first operating system – and it wasn’t their hit product – until five years after the creation of the company. Their success in operating systems came a year later – from a product they bought from someone else and renamed (again, not in-house innovation). Facebook is at about that stage in it’s lifecycle.
Lessons To Takeaway – And More Reasons Mark is Like Bill
There’s some lessons we as business owners or watchers of business should takeaway.
1) Overnight Success is almost never overnight.
It’s amazing how many people think companies like Facebook or Microsoft or any other of the “hits” look like they came from nowhere. But the reality is, it’s years of work to find the right mix. Very rarely does a company “hit it big” off the bat. Friendfeed is almost two years old already, after all.
2) “Innovate and get arrows.” It’s a waste of money to be the developer of what someone else is going to do for you. Move into spaces where there’s already been innovation and capitalize on it.
Rarely, also, does the first with an idea or the first to popularize an idea succeed. The ones who usually succeed from a business/revenue perspective are the ones that see an emerging market and invest/move in at the right time. Too early, and no one gets it. Too late, and you’ve missed your shot. Facebook is like Microsoft here, too. Friendster and Myspace were both ahead of Facebook (as well as others) – but Facebook found the right mix and had the right timing to dominate and built off of their innovative success, leaving them behind holding the bag.
Is The War Over?
I personally believe there will NOT be another Facebook, and the space is now closed for new entrance success. The last thing I would invest in is another social network that aims for supremacy – the market is going to stabilize, and there will always be niche plays to jump in on, but Facebook is here to stay as top dog.
What do you think? Am I wrong? Am I right? Where do sites like Twitter (big on buzz, but comparably small on users) fit in?
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