Future of Facebook
As we spent our first year at college, all of my classmates became Facebook guinea pigs; we were the first generation that would go through college (and the rest of our lives) with the site in our bookmarks. Social networking was as new to us as a frat party, a discussion section or a telephone call home. But we learned quickly. By the end of freshman year, I had stopped visiting each of the networks I had signed up for the year before because they were courting a demographic different than my own: Friendster was for old people (which, at the time, meant thirtysomethings); hi5 was for people in Europe, or Canada, or somewhere foreign; MySpace was for… well, we all know where Tila Tequila comes from.
It took just five years for the social network to reach this point, moving its way quickly from a college dorm site, to incorporating in Delaware as a company (five years ago this month), then moving to California and securing venture capital funding, adding access to every college in America, then every high school, then every person who wanted to join. Now, as the site is going international, 70 percent of current users are coming from abroad—many who first downloaded Facebook’s translation application, which users have used to morph the English site into 50 languages, all so that their friends who don’t speak English can join. “Our favorite story to tell is that 4,000 users translated the site into French in less than 24 hours,” says Naomi Gleit, Facebook’s project manager for growth. “It’s pretty insane, right?”
As a private company, Facebook does not release earnings, but a recent stock buy-out option valued the site around $6.5 billion. That said, many attempts for the company to make money (mostly through user-targeted advertising) have been rebuked by the users themselves. “If you try to count the products Facebook is testing, it’s almost mind-boggling,” says Jeremiah Owyang, a senior analyst in Forrester Research’s social media department. “Facebook hasn’t yet figured out the formula that’s going to work for the needs of the users or the brands.” Even so, Marc Andreessen, who sits on the board of Facebook (along with Don Graham, the CEO of the Washington Post Company, NEWSWEEK’s parent) told Reuters that Facebook would do over $500 million this calendar year, with billions in revenue by 2012.
But revenue projections are, well, just projections. Here is the current reality: Even as Facebook marks the anniversary of its incorporation this month, nearly every other social network has shrunk. MySpace recently cut almost 500 employees, close to 30 percent of its work force, after the site’s visits dropped by five percent in May from the year before. Friendster has all but disappeared. And while it’s clear that Facebook isn’t going anywhere for some time, the company certainly can’t rely on hundreds of millions of people contentedly poking and gifting each other into perpetuity.
