Monday, July 23, 2007

Face value | Book value |

Interesting Facebook snapshot from The Economist 

Metaphorically, Mr Zuckerberg views himself as similar to the pioneering Renaissance mapmakers who amassed and combined snippets of information and then charted new lands and seas so that other people could use their maps to find, say, new trade routes. In Mr Zuckerberg's case, the map charts human relationships. Whereas many of the other social networks on the web primarily help people to make new contacts online—whether for hanky panky, marriage or business—Mr Zuckerberg is exclusively interested in “mapping out” the “real and pre-existing connections” among people, he says.


Mr Zuckerberg is about to be tested in two ways. A three-year-old lawsuit is coming to court in which he is accused, in effect, of stealing the idea for Facebook from three other Harvard students. And if Facebook really is going to do a Google and go public, he will have to convince investors that mapmaking can be a business. One of its investors recently said revenues might come to $100m this year. But it is not clear how much of this comes from one big deal with Microsoft, which needs Facebook as a partner and might even like it as a division. Advertising, the obvious business model, does not seem to work well on Facebook, perhaps because people go there to socialise, not to shop. Trying to make money in other ways could be risky, since it might alienate users and damage the social graph. And it is, remember, awfully easy for one “next big thing” to be overtaken by the next.

Face value | Book value |

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