Facebook looks bulletproof. It crushed its early competition, shrugged off privacy missteps and created a billion dollar platform within just a few years.
Built not on the backs of techie early adopters but of college kids, Facebook was quick to demonstrate its global, mass appeal.
And its appeal has held steady. While young techies sneer at AOL and Yahoo!, they’re still on Facebook.
Sure, you see the errant “as soon as my Mum friended me it was over” comment but those users are outliers. While it remains an industry maxim that the mighty will fall, there has been no viable challenger and no real test of Facebook’s dominance.
Until now Facebook’s launch of Places is without question its riskiest move to date. Why?
For starters, by challenging Foursquare, Facebook has chosen to take on a focused, scrappy underdog. A different fight than their battle with Google where even being a challenger could be counted as a win, this fight will say a lot about how nimble an organization Facebook – just a couple years out of start-up mode itself – remains. Facebook has already gone from pulling in Google talent to shedding key engineers on a regular basis. A loss to Foursquare will speed the trend, lessening their ability to attract top engineering talent.
Another important consideration: over the last 16 months Foursquare has found two million users willing to replicate (some would say refine) their social graphs. While they did this with the help of Facebook’s API they didn’t rely on Facebook as a distribution channel (unlike Zynga). It’s widely perceived that Facebook users can’t be bothered to recreate their social graphs and that these “switching costs” make user-acquisition too difficult for competing services. A win by Foursquare – heck, even survival – while in direct competition with Facebook will call that assumption into question.
The “if Foursquare could do it” bullet point will factor into countless strategic decisions.
Finally, a loss will show that Facebook does, in fact, have limitations. It took a number of years and countless failed products before the community realised that Google was not unstoppable on all fronts.
Right now Facebook is seen to have the potential to win at everything – display, search, even video – that it has taken “the internet from Google”. It’s worth noting that a Location Based Service like Places isn’t the same as, say, Google dabbling in Wave. It’s a pretty organic extension of Facebook’s social networking foundation. A Places loss, particularly in tandem with a Foursquare win in LBS, won’t be the end of Facebook but it will show it to be far more vulnerable than is presently assumed.
To be sure, Mark Zuckerberg is betting on none of the above. Last night’s high-profile announcement showed supreme confidence as did his decision not to acquire Foursquare. Facebook has gone “all-in” with Places – it’s a big bet and their success or failure with it will dramatically impact the industry.
Paul Marcum, a former Yahoo! and one-time Shake Shack Mayor, is working on a new startup and just launched the NY Data Visualization and Infographics Meetup. He can be found on Twitter at @jpmarcum and blogs at http://marcum.com, where this post was originally published.
Reprinted with permission from The Business Insider
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