MappingTheWeb //

Once again, rumours are swirling about a potential Facebook acquisition. This time, Google is the culprit. Sergey Brin, co-founder of Google, has expressed interest in the exploding social network. This isn’t the first Facebook takeover rumour we’ve heard so far this week. Already, reports surfaced that Microsoft has been in talks with Facebook. In addition, acquisition talks between Yahoo and Facebook have been going on for what seems like forever. The future of Facebook is uncertain to say the least.

What would a Google takeover mean for the search giant? Access to a large, highly sought-after market and ownership of a respectable social network (finally). Orkut just didn’t cut it. What would a deal mean for Facebook? Lots of money for Zuckerberg and more targeted advertising.

Let’s be honest though. This is an information deal - it’s all about the data. Facebook is a marketer’s dream. The amount of information available is ridiculous. Regional, demographic, social - Facebook has it all. Google would simply be adding another database of information to their arsenal. It’s all part of their master plan to take over the world. Muhuhaha…

Other rumours are circulating that indicate Google is laying back and waiting for Facebook to come to them. Still, others are saying that Zuckerberg and co. are sticking with their initial plan of staying indepedent, shunning all takeover offers, and planning to go public later this year.

Perhaps this is simply another Google PR stunt to raise awareness about the company. We haven’t heard much from the company in the last week or so. Ha. Having said that, they fooled me when they bought YouTube. It seems that the search giant is always looking to buy the cream of the crop in any given space, not only to acquire a large user base, but also to generate excessive amounts of PR and buzz.

Money always seems to be the big issue when it comes to Facebook acquisition talks. Because the social network is growing at such a phenomenal rate, it always seems to have the upper hand in takeover talks. What this means is that it can call the shots - i.e. the only way Facebook will sell out is if they are offered a huge sum of money. As mentioned, Zuckerberg has indicated an unwillingness to sell. But we live in a capitalist society. If the price is right, it is pretty hard to say no. Don’t forget that Google has deep pockets and a track record of getting what they want. Will Google be the one to finally pull the trigger? Can we say hello to GooBook?

Over the years, major players have emerged from specific spaces: Google in search; YouTube in video; Amazon in books/e-commerce; eBay in auctions; Facebook in social networks, etc… These giants are very hard to compete against for all kinds of reasons. Firstly, they benefit from economies of scale. Secondly, their resources are vast - not only in terms of financial, but also human. For these reasons, start-ups are refusing to compete head on, but rather choose a smaller vertical or niche to compete for.

We’ve already seen this trend occur in at least two of the biggest spaces: search and social networking. There are now search engines and social networks tailored for nearly every group. These narrow, highly-specific offerings provide huge value to the target audience, as well as lucrative revenue opportunities for the company due to the targeted nature of the group.

My guess is that we will continue to see this process occur over and over again. Once a given niche begins to fill out, we will started to see micro-niches - and the cycle continues… In other words, there will always be opportunities to compete against the big guys. Extracting a small subset of their user base and providing a more tailored offering is the key. If a new company is able to do this, expect satisfied users and financial success for the founders.

So what is next for verticals? Which industries will they invade? What trends and strategies will emerge?

This is a question I seem to keep asking myself. Nearly every video site or portal has copied the YouTube interface in some way, shape, or form. The other day, Mashable compared MySpace TV’s new interface to that of YouTube. The verdict: nearly identical. Add to that the fact that foreign YouTube clones are popping up on a daily basis. Again I ask myself, “Does YouTube have the perfect interface?”…

My answer is no. I don’t believe there is such thing as a ‘perfect interface’. There is always room for improvement. Having said that, interfaces should be judged relative or in reference to other players in the space.

I think there are two main reasons why many are copying the YouTube interface:

1. Familiarity - Users are familiar with the YouTube interface. I would wager that 99%+ of regular Internet users have visited YouTube at some point. In other words, people are familiar with the navigation, layout, player, etc… By re-inventing the wheel and designing a completely new experience, users are subject to a learning curve. For this very reason, it can be a huge advantage to copy an interface that is already well-known and mainstream.

2. Budget - Most small start-ups do not possess a huge R&D budget, nor do they have an entire team of interface designers at their disposal. The cost is unjustifiable so early in the process. YouTube, on the other hand, is a large player and has the backing of Google. Simply put, YouTube now has deep pockets and a large talent pool. This allows the company the opportunity to churn out a high quality interface with much testing and tweaking happening behind the scenes.

I guess the conclusion we can pull from all of this is as follows: though it may seem like a questionable, unethical form of business practice to copy such an interface, the subsequent benefits may be appealing to any site looking to enter a given space. I am not vouching for or against this strategy, but rather outlining the perspective from both sides. There is always an opportunity cost to every decision made. By copying a well-known, understood process or system, you are essentially decreasing the learning curve, facilitating the adoption process, and creating a shorter path to critical mass.

I’m not getting an iPhone and probably never will. Having said that, it looks cool and I can understand the hype and buzz surrounding the launch. But the hysteria and sheer madness have reached levels beyond my wildest imagination. Everyone is talking about the iPhone regardless of whether it’s on topic or not. Case in point: this blog. Even TechCrunch has been swept up in the iPhone fever. I counted 5 stories in a row dedicated to the iPhone. Remember, TechCrunch is a blog that supposedly discusses start-ups. They should leave these stories up to CrunchGear.

It seems that almost every blog, news site, and discussion group is buzzing about the iPhone. I feel like my head is going to explode. iPhone stories have run amok at Digg and Techmeme. Traffic at tech gadget blogs, such as Engadget, Gizmodo, and CrunchGear has spiked in the past few days. Almost every single blog on my feed reader has an iPhone story - some even have multiple.

When is the madness going to end? I hope it’s soon…

With all due respect, I give credit where credit is due. This has obviously been a phenomenal launch for Apple. I can’t think of an event that has garnered such PR attention and exposure in recent memory. But it makes you wonder whether a backlash or recoil is imminent. Sometimes the most successful campaigns spur counteraction and negative sentiment. Only time will tell.

… and I thought Dairy Queen had an incredible launch with their waffle sundae campaign. What do I know?

PS. Is everyone else embracing this iPhone frenzy? Am I the only one who is sick of hearing about this gadget?

Facebook continues to grow at a staggering rate. Though it can already be considered a mammoth, it still has much upside left. The recent introduction of the Facebook Platform will simply promote further growth. The value proposition for any company looking to integrate is quite obvious - a massive, loyal user base. Just ask iLike. The ability to piggy-back off such a large network is a huge advantage for any early-stage companies.

With all this growth, positive outlook, and momentum, one must ask, “What is going to stop this Facebook train?”

An IPO: Going public isn’t as glorified as it’s hyped up to be. Priority quickly shifts from satisfying users (or consumers) to satisfying shareholders. In other words, less attention is focused on the user. Innovation and feature sets are set aside so that business development and revenue generation can manifest.

Going public isn’t a dream. It’s more of a nightmare - especially for a user-centric, consumer-based web company. This is the scenario faced by Facebook. Rumours and gossip continue to circulate about a pending IPO in late summer or fall. Simply put, the possibility is quite real. Though raising capital does provide the ability to bring on added resources, the dilution of equity and ownership is a strong argument against such a proposition. Anyone whose ever had to deal with numerous stakeholders knows that ensuring the happiness and satisfaction of everyone is near impossible. Financial obligations move to the forefront. This usually means that the user is left to the demise of a fiscally-conscious executive posse and a board of directors, rather than a team focused on the user experience.

Another extremely plausible case is…

Social media collapse: Think back to what happened to Digg. Should Facebook choose to betray users, hide or lie about an issue, or provide non-disclosure around a given policy, and users find out about the blunder, watch out. The very mechanism that spurred viral growth and adoption may work in a counter-productive fashion.

Here are a few other, less likely cases…

A sale: As is the case with many takeovers and acquisitions, the user base of the little guy gets disgruntled. All of a sudden, the policies and corporate culture of the start-up are subject to the red tape and bureaucracy of the over-arching big guy. Many users feel uncomfortable and betrayed in a situation such as this, and defect to a similar product/service where they feel more at ease.

Complacency: Though we have not witnessed this as of yet, a failure to innovate may signal troubles for the company. Having said that, this is probably the least plausible and least likely threat to the company. Time and time again, Facebook has displayed a strong willingness to provide innovative features . For this reason, I have my doubts about the complacency of the company - unless of course, Mark Zuckerberg finds more value in yachting and spending time in the Bahamas rather than company strategy.

What do you think will slow down Facebook’s exceptional growth?