My friend John Nemo had an interesting post about why he thought “Facebook is Screwed.”
He points to a weak mobile application and lack of a good ad platform on said app.
With all of the hullabaloo around their IPO, it seems like everyone is piling on Facebook when they are “down.” Although I don’t know if raising billions of dollars is really being “down.” Anyway, I do agree with John to an extent but I think really where Facebook could be in trouble is they are starting to create “walls.” What I mean by that is to even click on an article that someone else has read or shared, you have to agree to give a reader application access to all of your information. No thank you, Facebook. Privacy issues are already a huge obstacle for social media giant and people are going to be less likely to share their information with dozens of applications just to read articles they can find on their own elsewhere.
I’ve also seen rumblings about the company selling a Facebook phone and perhaps developing their own web browser or buying Opera. Right now they have few costs for operations, but if they start making a phone, that could cut into their slim margins and if it fails, it could be a crippling blow to the company’s future. A web browser makes sense if they continue to go down the path of “building a wall” around the website. Want to share a link on Facebook? Maybe it would only open in Facebook’s browser once you share it. The more walls we see go up, the more plausible it seems people will look elsewhere for spending their time on the web.
Anyway, I think there are a lot of risk factors that could impede Facebook’s future success. However Facebook does have extremely high usage rate as well as a high barrier for exit. People have shared a lot of information and have developed networks of friends on the website and would need to have motivation to leave besides walled content. It is still a very powerful tool for sharing information with people and maintaining relationships, so users’ friends would have to be somewhere on the web that is going to give them a similar feel to Facebook and that place doesn’t exist yet. Or does it?