David Kirkpatrick

February 18, 2009

Facebook on the brink?

Filed under: Business, Media, Technology — Tags: , , , , , — David Kirkpatrick @ 11:59 am

The flap over user content may be the tipping point for Facebook. MySpace had a similar problem, but no one really cared because it mostly hit gloomy kid’s bad poetry and indie band MP3s. Facebook is a player in the adult world — I get hit up once or twice a week to start a Facebook page — so these allegations carry a little more weight.

From the link:

Have Social Media/Web 2.0 Companies Gone Too Far To Obtain & Own Data?

Absolutely.  Here’s why – The data they collect is what is fueling and stabilizing their ridiculous valuations and the funding coming in which they rely on to survive due to their minimal revenue streams.  It’s this data “gold” that companies and VC’s DEPEND on and are in fact inesting in.  It’s not the UI, or the ability to poke a friend.  The maximum protection or “assurance” the Investment bankers, VC’s and Angels are investing in is the data & who owns it.

It’s that simple – Nothing else to it.


Joining the groups emerging on Facebook isn’t going to change a thing, just as it didn’t when they changed the UI and everyone was in an uproar.  Zuck and the legal team are making moves to protect valuation.  In the grand scheme of the things 50 thousand or 1M peope joining a group won’t make a difference.  This I believe, will be the tipping point to create attrition to the already hairline cracks emerging in the Facebook empire.  They simply refuse to listen to their customers. We saw this with Beacon, their development requirements, the new UI and now the new TOS.  The valuation has dropped from a reported $15B to $4B in less than a year and this recent stunt may see more defection in their user base.  Although they own the content after a user leaves, if 20 or 30 Million strong decide the terms aren’t for them the cards will collapse on the empire and quickly.

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