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Is this the End of

By on October 13, 2011

Is the writing on the wall for Even as Facebook powers through 800 million users to become one of the largest networks of humans on the planet, is the role of the place that started it all – – coming to an end.

I think it might.

Blame Steve

Facebook homepage

The writing on the wall for is not ennui, or the end of the fad of social networking. Far from it. Registrations are continuing and new countries such as Turkey are rapidly adopting Facebook to the same level as the US and the UK.

The problem is smartphones, tablets and new ways of consuming content.

When Facebook was first created, mobile computing sucked. It was slow, on poor screens, that had no touch sensitivity and web pages were a nightmare to navigate. Apple changed all that and, despite being an initial iPad sceptic, I am now convinced that tablets will be the dominant form of web consumption (and possibly entertainment consumption) within ten years.

Today, nearly half of Facebook users access Facebook through their mobiles (350 million). That number is only going to go up, especially when you add tablets to the mix.

Blame Mark

Another key indication of’s decline is Zynga’s announcement of Zynga Direct, another step in the direction of taking Zynga’s games away from Facebook and onto their own websites that was started with in late 2009. Over 250 million people are gamers on Facebook and 2/3 of them log on to play every day, so Zynga moving away from Facebook is big news.

Or is it?

Zynga will still be using the social graph that Facebook has built up in the form of Facebook Connect. It’s not yet clear whether they will still be using Facebook Credits.

In other words, Zynga is not abandoning Facebook. It is just moving away from

What is the future for Facebook?

In October, 2005, I wrote Two reasons why Facebook is about to become bigger than Google. I said:

“Facebook is just about to crack two elements that will give it unrivalled power across the Internet … Websites will soon start falling over themselves to implement Facebook Connect. It reduces the friction that stops visitors from registering. It makes a user’s interaction with that website appear in the user’s Facebook stream, which is both a vote of approval and a viral marketing tool. And, pretty soon, users will just expect it.


I can’t overstate how important I think payments will be… Let me walk you through a scenario:

You buy me a beer. I don’t buy you one back so I want to give you a fiver (I live in London. Beer’s expensive). Under your profile picture will be an option: “Send money”. I can transfer £5 to you in seconds, with no need for sort codes and account numbers, and I’m know it’s you, because we’re friends on Facebook.

Now let’s imagine that you’ve never used this modern “Facebook payments” system. You don’t really like it. But now, you’ve got £5 in it. You could spend that money on virtual goods. Before long, I’ll bet you could spend it at Amazon or any number of other online retailers.*

Or you could give Facebook your bank account details and ask them to deposit the £5. And at the same time, they’ll ask if it would be OK to take money out of your account in the future if you want to buy something using your Facebook credentials.

And Facebook becomes a payment system more global than Western Union, more ubiquitous than PayPal and as trusted as Mastercard and Visa.

* This was before Facebook had announced its 30% revenue share, when I thought it was going to go up against the major payment providers like Visa and Mastercard. I still think that is realistic scenario, although they’ll have to reduce their revenue share by a factor of 10 for that to work.

So it doesn’t matter

The death (or, more likely, slow decline) of doesn’t matter. Facebook is a web of connections tied to a payment system (albeit a payment system that has not fully taken off yet). There will be skirmishes, such as the current one with Zynga, over how the revenue should be split between platform provider and application provider.

In the end, though, Facebook is moving away from a website and weaving its tendrils through everything that we do on the web.

Facebook is dead. Long live Facebook.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: