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Sunday, April 11, 2010

Facebook: Google Redux?

It amuses me that what people say about Facebook today sound substantially the same as what people said about Google six and a half years ago. What were they saying to me back then?

It must be too late to join Google now. There's no way you'd become a millionaire by joining them at such a late stage.

How could they possibly make money? Those little ads? Nobody clicks on those! I don't know any one who clicks on those things, and I myself never click on those!

The former statement obviously might or might not be true, depending on how generous the stock compensation package handed out to employees today are. The latter statement, however, is easily verified: try placing an ad on Facebook. The last time I tried, it was a minimum of $0.60 per click, and they wouldn't take my $1/day budget. For reference: Google will happily take a $1/day ad campaign, and will take bids as low as $0.01.

When I visited Facebook campus a few weeks ago, it reminded me of Google campus 6 years ago. The parking lots were overflowing, and people were clearly working at high intensity. Even the cafeteria looked familiar (well, it should, since it was for all intents and purposes Google's old Cafe-14, complete with the same staff).

Ultimately, two things convinced me of Facebook's value. The first was when the Caja team needed a contact with Facebook 2 years ago. I dug through my Facebook contacts and came up with Jeff Rothschild, who's the VP of Technology at Facebook. I made the connection and they had their meeting. (Jeff by the way is featured in my book) Now, there might not be an easy way to monetize this (though see above about the price per click on Facebook today), but I was convinced of the value of Facebook after that.

The second thing that convinced me of Facebook's value happened when I was in Europe, and again when I was in Australia. Over and over again, whenever I met someone, instead of giving me their e-mail address, they'd tell me to friend them on Facebook. This by the way, is a very bad idea for most Europeans: there are so many name duplicates on Facebook that it's impossible to disambiguate the two hundred "Ben Smiths" for instance. I tell people to friend me instead since my name is much more unique than a typical European/Australian/American.

Thirdly, people I talked to who weren't in Silicon Valley all thought that Facebook must have been a giant corporation with more than 10,000 employees. More than anything else, having small companies have such a huge impact on the rest of the world is the major reason why Silicon Valley is still the place to be, if you're a computer scientist.

Finally, if it is true that Facebook has found a way to monetize social networks, this is huge news. The Google-MySpace deal famously fell short of expectations, so if Facebook really has trounced Google at the social-network monetization game, that would be huge.

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