 Facebook Goes Back to the Future
There has been a ton of digital ink spent on the whole Facebook/Beacon fiasco. Last week, the conversation got serious when that digital ink spilled over to the oh so important Wall Street Journal. I mention this because I was having this discussion with two of my colleagues, @jstorerj and @dwilkinsnh on our weekly Three New Media Wonks weekly podcast and it brought me back memories of ad serving giant, DoubleClick and their botched attempt to buy offline data aggregator, Abacus.
The premise of the discussion was the fact that the whole outrage over Facebook sharing offsite purchases on sites like Overstock.com, Amazon and eBay isn't really new. It happened back in 2000 to ad-serving pioneer DoubleClick when they purchased an offline data aggregator called Abacus. If you didn't live through that outrage, it was pretty amazing. To the point that it ultimately turned DoubleClick into an uber-privacy advocate. Sadly, it also did some major damage to DoubleClick's reputation -- and stockprice -- an event from which they never truly recovered.
Facebook is this millennium's version of DoubleClick (with a lot more upside.) And the fact that people are outraged over what Facebook did and the fact that it took their child CEO, Mark Zuckerberg, several weeks to issue and apology was unacceptable. Uber-blogger, Robert Scoble of PodTech called Zuckerberg out on the carpet just days before Facebook issued their tepid blog apology. I would encourage you to read Scoble's post but to paraphrase his message, he essentially was saying "dude, what are doing?"
To that point, estimates value Facebook somewhere between $15-100 billion. Given the fact that their revenues are in the $150-200 million range (I think these numbers are ridiculously overblown but Microsoft's recent investment in today's latest social network darling is only fueling the valuation debate) these guys are gambling with some big bucks. The reason I mention this is that like Doubleclick in the late 90's, Facebook is loaded with potential and the timing of their recent misstep couldn't have come at a worse time. Exacerbating Facebook's Beacon misstep is the ever-increasing competition from other social networking sites that are working hard to attract a business audience. There was not only the recent announcement of Google's Open Social initiative (teaming up with Facebook) but today LinkedIn announced that they are making some major upgrades that will make them much more like Facebook.
Is Facebook going to go away anytime soon? Of course not. But they've taken out their pistols and blown big holes in both of their feet. I think there is still time to recover -- just like DoubleClick eventually did (they were sold to Google earlier this year -- not the worst fate in the world.) I'm just surprised that a social networking site with a constant flow of feedback from numerous influential members could make such a big mistake. Let's see what happens next...
Cross-posted on Wearesmarter.org
Mon, Dec 10 2007 |
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