Facebook Can Be Anything It Wants to Be

Facebook is a shape shifting Internet monster. With more than 500 million users, it really can be anything it wants to be. Whenever a new startup pitches an idea, one of the questions an investor might ask is if Facebook could do the same thing.

That is definitely a valid question that every start-up should consider even before working on the idea. You wouldn’t want to spend years on an idea but see Facebook dominate your space in months. .

When I was watching AppBistro’s pitch, one of the investors raised this concern. AppBistro is an online marketplace to shop for Facebook applications and it’s only logical to question if Facebook could one day do the same thing

Chris Fralic: “What if Facebook starts its own marketplace?”

Response: “They’re concentrating on the social graph, not what we’re trying to do.”

I agree with the team’s view on Facebook’s current focus. But I wonder if it could change. Facebook would incorporate anything that makes its platform more social and its network more connected. The idea of having a Facebook marketplace isn’t too far-fetched. After all, Facebook is like any other business. It needs revenue to sustain itself. An application marketplace seems to be a good idea to integrate revenue making and social as one with Facebook credits as the currency. In case you are mistaken, I’m not down playing AppBistro. It owns a beautiful business concept and will probably be successful before Facebook decides to have a marketplace.

Foursquare and Gowalla aren’t that lucky. The check-in model has great social value but both companies haven’t really been able to achieve widespread adoption. Facebook noticed the potential and introduced Places (its version of check-in) followed by Deals. What would you do if you were Foursquare? With over 200 million mobile users, it’s really hard to fight against Facebook. Even a low 10 percent adoption rate would mean 20 million users.

I find myself checking-in more often on Facebook than on Foursquare, simply because my network is on the former and not the latter. It just makes more sense. Facebook’s social features such as comments and “likes” are also strong competitive advantages. I’m sure many of you feel the same. On hindsight, maybe Foursquare should really have taken the exit when Yahoo wanted to acquire it. In short, Facebook is killing off businesses that never considered it as a competitor.

Could photo site Flickr suffer from the same demise? Facebook Photos is increasingly popular and was recently upgraded to compete better in this domain. The upgrade includes hi-res photos, photo-download links and a lighbox interface. It has stepped onto Flickr’s tail. Even though Facebook Photos may not be as good as Flickr, the Flickr team should be feeling the pressure.

What else could Facebook be? Anything that is social. Perhaps Facebook Videos could one-day challenge YouTube. With a huge user base, Facebook can really be anything it wants to be.