There’s lots of talk these days about Facebook being the next Microsoft. Is it?
The main question for Facebook, as it is with nearly every interesting web idea, is how they will make money. CNN Money pointed out today that Facebook has taken an interesting route to profitability: by opening up the doors and letting developers make applications that users want. In some ways, Facebook is akin to a real-estate developer. They own the property and are fostering other people to create the businesses on it. The internal competition is clearly good for Facebook–when applications die because of errors or lameness, Facebook isn’t as fault. Their brand is protected, while developers take all the risk and engage in the competition.
But that doesn’t mean that Facebook’s future is secure. For one, there is a larger adult market that hasn’t quite jumped on board the Facebook bus. As Arnold Kling points out, until the platform allows for a greater degree of control over what information is seen and shared, adult users aren’t likely to. In addition, they still have not perfected their source of revenue (right now, it’s mostly ads).