Wake Up Facebook!

So my topic for the day was going to be commoditization. There are so many things that are increasingly moving to lowest cost genericized offerings. Just saw this news article about advertising revenue:

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090602/FREE/906029995/1078/newsletter011

No surprise really considering how many options are now available for advertisers. I was going to focus today’s blog on how advertising-based business models are bound to fail and how new sources of revenue based on value add is critical. I’ll save that for another day and focus on something related but I feel particularly emotional about today:

WAKE UP FACEBOOK!!!

I can’t say that loudly enough! They have become so blinded by an investor valuation that they’re missing the real opportunity for revenue and sustainability and ultimately long term relevance. Facebook will go the way of, dare I say, MySpace -- I don’t know anyone on MySpace anymore -- or Orkut (remember them?) unless they focus on their value add and build a business model that creates value from their service.

I know, I know that many will scoff at this opinion but regardless of the success they’re having today at building an infrastructure for communities some completely unknown service or technology will come around tomorrow, next month or next year that will be cooler, hotter or just easier and will totally subvert their success eliminating any perceived market valuation.

So what is the answer?! The funniest and most aggravating thing about the Facebook service is that there is a straight forward and powerful value that has distinct revenue generating potential that has not been leveraged. The largest and wealthiest market in dire need of Facebook’s easy-to-use, collaboration and knowledge management solution is business -- the Fortune 1000. The problem with Facebook is that they’re caught in a “cool” consumer cycle that they miss the business opportunity right in front of them.

Facebook should be able to relatively easily use their existing service as the basis for a corporate SaaS collaboration, knowledge management, auditing service. I can’t speak for every corporate intranet but certainly the ones I’ve used have been a nightmare aggregation of mixed systems providing limited functionality along with horrible search, auditing and collaboration tools that never quite get optimized. Worse yet, as we’ve all likely experienced, as soon as we get comfortable with one tool a new one is introduced with an entirely different interface and capability. Facebook is terrific for creating user controlled groups and integrating IM, email, web services and digital media for sharing, controlling and collaborating. The technical challenges would be minimal (at least initially as a SaaS offering only) with a mid-market sized business customer seeing immediate and significant value from an enterprise type offering.

More importantly, for Facebook, they could charge a reoccurring subscription fee to business customers that is predictable and not insignificant. It’s not advertising-based. With their advance feature set and brand recognition Facebook could quickly gain marketshare and significant customer success.

The fact of the matter is that without Facebook in this space there has been a number of Facebook type services popping up to service this B2B need. These services include: Grou.ps, TamTamy, Jive, and Igloo. Facebook has competitive advantage today but it must move quickly to address this need before the market opportunity passes them by...