Facebook Platform: Is There a Local Angle?

Facebook logoIn case you’re not aware of it, Facebook made a significant announcement yesterday that it would open up its “platform” to third parties. I’ve done a fairly straightforward write-up of the news at SEL. Facebook claims to have 24 million users.

For purposes of this post the question is, is there a local angle to the Facebook Platform announcement? Indeed, there is.

In filling out your profile you’re asked to identify a “regional network” or location. Facebook already has a classifieds marketplace and a deal with Oodle tied to location. So there’s geographic awareness of where users are. Also, Facebook’s legacy is firmly local because it started as a closed social network for college students at specific universities.

On to the platform . . .

As mentioned, Oodle is one of Facebook’s partners, but is also part of the platform initiative. I ran into Oodle’s Craig Donato and Faith Sedlin, among others, at the event. Dogster/Catster was also there. Travel search engine SideStep is also a partner. As far as I could tell those were the only “local” partners, but there will be more. (SimplyHired and Platial were there in the crowd.)

Let’s say I was Citysearch or Yelp (I know that sounds redundant) or Outside.in or HotPads (real estate) or even SuperPages or YellowPages.com, I would build a Facebook application for potential exposure to its community. But it has to be done thoughtfully. This is very much a case of if you build it they won’t necessarily come.

The prize for doing it well is potentially rapid dissemination through the “social graph” (the Facebook community) via the viral features on the site.

There’s basically no reason for local sites not to try and build on top of Facebook, even though in many cases locally targeted applications cannot spread as rapidly as others through the network because they appeal to selected groups of users by definition.

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Now a few words about Facebook more generally and its potential “end game.”

Facebook reportedly turned down nearly a $1 billion offer from Yahoo!. Facebook says it wants to remain independent and many people believe it’s angling for an IPO. I don’t believe that the company will generate sufficient revenues in the near term to make it an attractive public offering. But I could be very wrong about that.

More likely in my mind is a bidding war in which Facebook is acquired by Google or Microsoft or potentially TimeWarner, though that’s much less likely. (IAC is also a potential bidder.) Presumably Yahoo! has bid as much as it’s going to bid for the site I imagine. However, among the big three search engines Yahoo! is probably the best fit.

Neither Google nor Microsoft really have social networks, despite claims to the contrary. Google was somewhat blindsided by the rise of MySpace, Orkut doesn’t count (unless something changes) and Microsoft’s Spaces isn’t convincing to me.

Microsoft’s VP for emerging business got on stage yesterday during the partner portion of the program. The minute that happened, I thought: “Here’s Microsoft’s next big acquisition.” I could be wrong of course but that was what came immediately into my brain.

From what might be described as a “meta” perspective, Facebook has made a brilliant strategic move in its new platform. Whether any individual third party benefits is another question, but Facebook will reap the benefits of related PR/buzz and increased valuation. There was the question of how Facebook would grow and it opened up the site to everyone. Then there was the question of how it would get larger and compete with MySpace. This is the answer.

I had never heard Facebook CEO Mark Zuckerberg speak before yesterday. The whole “F8″ event was intended to emulate Apple or Microsoft and was designed for maximum PR value. It achieved its desired effect in that regard.

Zuckerberg struck me as very heavily identified with Facebook. And he clearly has an ego at this point. But he’s not the only one running the company. The board and investors would certainly take an offer if it were the right price: $2 billion is the number that has been floated.

Let’s check in again six months from now.

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10 Responses to “Facebook Platform: Is There a Local Angle?”

  1. AhmedF Says:

    We’ve been thinking about this since we heard the rumblings about it a few weeks ago – but the challenge is to build something really interesting and powerful (incidentally Facebook is one of our top 10 referrers to iBegin Toronto – with the note that Toronto is supposedly the most popular city in Facebook).

    I also have to say – while I find MySpace etc sort of disgusting, I have tremendous respect for Facebook and what they have accomplished. Their backend engine works flawlessly, and with stuff like FQL and this, from a tech point, they have my utmost respect. Technologically way way ahead of the competitors.

  2. Mike Says:

    They have leased the LookSmart AdCenter platform and LookSmart is soon to release geotargeting ability to AdCenter.
    Will FB deploy geotargeted PPC, giving local advertisers the ability to zero in on distinct networks or profiles?
    I have small bus. clients who would love to get into their local demo’s.
    One thing I feel confident they will not do is place an IYP or local directory search on the site.
    The CEO was clear he wants to keep people on the site, not send them away.

  3. ColinPape.com Says:

    Great post Greg! There is definitely a local angle, and I’m surprised it hasn’t been covered more frequently…

    Facebook is the most local site I’ve ever used – here in Ontario, where it’s taken off like crazy, it’s being used to organize local events, businesses (mostly small & home-based right now) are setting up groups and groups are being organized around common offline interests (ie. camping & boating in certain locations, pub nights, etc.).

    It’s very impressive, and definitely a threat to many different geocentric offerings.

    The marketplace has proved to be a huge hit as well – to the tune of 550+ ads placed since the 14th of May in my regional network (45,000 members). Additionally, the ads are way more relevant than those placed in other locations.

    We definitely plan to leverage the Facebook platform to increase our brand visibility and to provide a layer of local shopping content to Facebook’s vast and growing community.

  4. BetterLabs Says:

    I am really really surprised why everyone thinks this is new. Salesforce.com did the exact same thing several years back, and it should not have taken any large social network to have epiphany to think of this. The on-demand platform model worked very well for Salesforce.com, but I am not sure the same applies to consumer social networks. Its tough to think that we will do “all” our social interactions in one network. If this is just a way for them to boost their traffic… sure, it definitely will do that I am sure. Essentially, the app developers who build for facebook will market facebook further as well.

    I am not sure this is SO market changing and SO big. And Salesforce.com did the same long back. Ofcourse, I am also not sure if I am right :-)

  5. Greg Sterling Says:

    There’s a difference between salesforce.com and facebook. There are lots of traffic-hungry internet businesses out there that will build on this. And facebook has lots more usage than salesforce. It’s really apples and oranges. Microsoft preceded salesforce. The general concept isn’t new but a social network doing something like this is a new twist.

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