Facebook will Rule the World

by Braden Kelley

I was looking at blog publishing alternatives yesterday to see what new developments are available, and after a stop at Twitter that led me to Facebook, I had an epiphany. Facebook is going to rule the online world, and here is why:

Before the invention of the automobile, towns were built around town squares or high streets. Town squares were gathering places, often populated by churches. Italy has the piazza, Germany the platz. Clusters of stores and restaurants often were nearby. In the UK, these clusters of retail businesses are called a high street, in the United States they became known as main street. In the United States, main street is dead or dying, replaced by shopping malls, strip malls, and big box stores. The negative consequence of this is the loss of community as these stores have larger catchment areas and lack that neighborhood feel, resulting in further isolation of individuals from each other.

Building upon the increasing isolation of individuals from each other, people are at the same time becoming more mobile meaning that people are more and more likely to have friend networks that span hundreds or thousands of miles. More and more people are ‘hanging out with their friends’ online and Facebook is one of the places that this happens in spades. ‘Online Community Sites’, as they are now referred to, like Friendster, Bebo, MySpace have exploded.

The reason I say that Facebook is going to rule the world, is that relationships are more important to us as humans than anything else other than food, shelter, and clothing. In the early days of the Internet, there was very little community and it was characterized as a patchwork of “properties” spread around the globe, and the result was that the “portal” became very popular and people flocked to sites like Yahoo! and MSN, and search engines like Live.com and Google. In fact four of the top five Alexa-ranked sites are the four I just named. But things are about to change. Spots six through ten in the Alexa rankings are currently all occupied by community sites (MySpace, Facebook, Wikipedia, Hi5, and Orkut).

The Internet is becoming a lot more relationship-focused and Facebook is leading this enablement by treating their site more as a platform. It won’t be long before people expect to be able to go to Facebook or their favorite community site and check their e-mail, browse their favorite news items and send text messages while still keeping track of what their friends are up to. These type of integrations will represent the next wave of innovations online. Instead of portals adding community as a feature, the innovation will come from a company like Facebook leading with relationships and then seamlessly integrating tasks and information into the community site in a way that allows people to customize these features to their needs.

My interaction with e-mail is already changing thanks to Facebook. I go onto Facebook to see what people are up to and a news item from one of my friends will trigger a contact, not through my Yahoo! account, but through Facebook. Yahoo! Mail can’t provide this kind of contextual prompt. Google tries to achieve some level of this in GMail by showing you who is online for chatting integrated together in the mail window, but I don’t know what people are up to. Nothing really sparks my curiosity or my likelihood to contact someone. Why is this important?

Money is allocated in the Internet economy based on the number of page views and the level of engagement. If people suddenly start initiating e-mails on Facebook or browsing classifieds or jobs on Facebook or who knows, maybe even news content, then the money moves with them. What happens if people suddenly stop typing in google.com or live.com directly into their browser and instead search off a widget in Facebook instead that drives revenue Facebook’s way?

Facebook not only has the potential to move up the rankings tables, but the revenue tables as well. When you look at this way, Facebook was smart to turn down Yahoo!’s $1 Billion.

So what are the portal players and search engines up to?

Microsoft has Spaces on live.com and is invested in Facebook, Google has Orkut, and Yahoo!, well Yahoo! wanted Facebook but didn’t get it and 360 is pretty lame. Now I’m no betting man or industry analyst but I would look for Yahoo! to do a deal in the next six months for a community site at an overinflated price. Facebook is about to overtake Yahoo! in the same way that Yahoo! overtook AltaVista. Now you see why I believe Facebook is going to rule the online world.

What do you think?

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