As seen in the image, Facebook is growing like mad in the display advertising space with a trajectory that is vastly different than any of the other major players in the space. That growth is borderline shocking, but shouldn’t be that surprising for anyone who’s been following their user growth as well.
What’s scary about this is that Facebook still hasn’t REALLY turned on the revenue spigot, and they still might not for some time as they continue to focus on user growth and improving their core products.
It still feels like much of their revenue potential is untapped, and as long as they stay private they will really be able to focus on core product offerings for quite some time.
I know some people still wonder if Facebook will fade out like Myspace did and no longer be the flavor of the day. They point to the fact that they don’t use it anymore, or they know a 23 year old who doesn’t use it after they graduated from school. I don’t think this matters. I don’t think comparing Facebook to Myspace makes much sense anymore, if it ever did.
There are major differences between the two companies. Mark Zuckerberg is an entirely different type of founder. The company has built a very different experience even though they both are “social networks”. Their company location, their executive team, their culture, and the fact that they have remained in control of their own destiny by never selling makes them very different. Add the major fact that Facebook is now pervasive through every demographic globally is something that Myspace never accomplished. It will be much harder for Facebook to fade out as a fad. I think it’s hear for the duration as a major player.
Where can Facebook go from here? I wouldn’t be surprised see more innovation out of Facebook, perhaps some that is fairly unpredictable at this point in time. They are still releasing new product functionality rapidly which is a positive sign.
One thing I’m curious to see if Facebook becomes a bigger threat to publishers by starting to use their social network to create their own socially-built or heavily socially-enabled properties. What would a Facebook News site be like? Or Facebook Sports? Facebook Entertainment?
I’m very curious to see if a Facebook Sports could be a credible threat to sites like ESPN, Yahoo! Sports, and others. I’m sure the Facebook team would not build it in the same traditional publisher model, so I’m curious to see what that could look like. They obviously could drive huge amounts of traffic to these types of properties very quickly. They’d also allow Facebook to sell more premium display advertising which would help their revenues tremendously and make them even more of a direct threat to Yahoo!/AOL/MSN and the rest of the companies who sell a lot of premium advertising today.
I think Facebook feels today like they have bigger problems to solve than the next generation of sports site though like launching a new type of inbox. At some point though, when they are public and revenue becomes very important, I think we may see them disrupt many publishing verticals as well. It’ll be interesting to watch.