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Is Facebook at its peak?
Is Facebook having an AOL moment? While traditional businesses are beginning to think that Facebook is a real company that is here to stay, has it passed its moment of maximum importance in the world?
Is Facebook the next AOL?
I think there is a chance that it is.
Facebook’s Achilles heel
Facebook has emerged as that Holy Grail for venture capitalists and institutional investors: a platform. Layered on top of the open web, Facebook owns a proprietary (relatively open, but proprietary nonetheless) platform that connects 800 million people across the world, and where independent companies such as Zynga can build multi-billion dollar businesses.
It is leveraging its social graph to attract $3.7 billion in advertising and is a dominant force for the consumption of content and for the marketing for brands on the desktop browser.
The problem is that the desktop browser is not the future. The future is mobile.
Mobile is a threat. A very big threat.
Now think of your experience using Facebook on your smartphone or tablet. Do you use it to find games (assuming that you play social games at all)? Do you remember seeing any ads in it? Have you used Facebook Connect in any of your iOS or Android games, or have you been too confused by the options (Gamecenter, Open Feint, Plus+, Twitter, etc) that you just haven’t been bothered.
Facebook dominates one market: the market for desktop social networking. It has become a platform on which others (like Zynga and the other social games companies) can build. It has become a channel that marketers can’t ignore.
But on mobile, its dominance is not clear. Is Facebook going to be the preferred social layer? What is that value of the Facebook “platform” when the dominant paradigm is apps, not homepages? How does Facebook regain its position as the starting point for many user’s Internet experience when it doesn’t control the eyeballs in the way it does on the desktop?
Is this an AOL moment?
AOL sold to Time Warner at the peak of its success, just as its walled garden, dial-up, business came under sustained attack from the open web and broadband ISPs. Facebook’s equivalent threat is the battle to become the “platform” for the mobile social web.
Facebook starts with a massive advantage. Few of its 800 million customers want to rebuild yet another social graph. Certainly I don’t. But Facebook’s commercial power comes from its ability to drive traffic to the places where its developers and advertising partners need it.
In the mobile web, Facebook still has a lot to prove.