You can’t talk technology at the moment without bloody Facebook popping into conversation. To say it’s driving technology is an absolute understatement, and it’s not so hard to understand why two of the largest companies in the world (Microsoft and News International) want to buy into it.
That’s all well and good, and it’s how business has worked for decades. Small start up bust their nuts to make innovative product- huge multinational buys them out for a few hundred million, every one gets rich and celebrates with a few glasses of expensive Courvoisier, some thigh slapping and possibly some high class hookers. And that’s wonderful.
The difference now is that sensations such as MySpace and Facebook are unbelievably functional, but have the profitability of a giant pool of cess, and the strangest part is that the world’s richest tycoons are climbing in there, exclaiming: “The money’s there somewhere, just let me take another look.”
It is in there Rupert, just keep searching.
Advertising revenue is all well and good, but it’s really scraping the barrel, especially when you just paid $240 for a 1.6% share (the sum Microsoft paid for Facebook), but Microsoft is only expected to make $30m dollars a year back through ads.
The problem at the moment is the higher powers are struggling to comprehend what social networking is and where it fits in.
MySpace was a huge sensation, Murdoch bought it, then Facebook came along and trounced it. Poor old Rupert really has a bad record with the internet, and things weren’t looking up for him when, in a press conference this month, he likened Facebook to “a phone book.” One senses that the road of possibility is limited while that kind of mentality is in place.
I wish I knew where the money in social networking was. Perhaps it relies on the delivery of content to those mass networks of people, but then, who pays for stuff on Facebook?
