Overnight Facebook’s only exit strategy for its current investors has become IPO. Why? They have ultimately created their site as the secure business platform for hundreds if not thousands of businesses that currently exist in an unstable environment as Josh Kopelman highlights. In the next week there will be hundreds of new applications built on the Facebook platform. For Myspace it took months if not years to get to the point they are at now where entire businesses risk their existence on Myspace granting them permission to operate. Now comes along a big thorn in their side. Their potentially biggest competitor has decided to go open source and take their site head on. Why on earth would Facebook want to grant all of the developers in the world 100% access to the ad revenue gained from their products? They have bigger plans and I don’t think Myspace is exactly who they have in sight.
I am willing to bet that within the next month Facebook will easily become the social network of choice to all Myspace users unless Myspace can immediately go open source. Do you think old-timer Rupert Murdoch is going to be up for it? I doubt it, but there is always that chance. Under the assumption that Myspace will fail to immediately adapt, what does the future hold? One route would be Facebook becomes the largest acquisition ever in the internet industry, and as of now Microsoft is the only company that can afford it. If that happens it will happen in the next couple weeks, not months. Alternatively, Facebook is gearing up to become the next dominant player in the search industry. The latter case is what I’m betting on.
Facebook is going to rapidly manifest itself into Google’s biggest competitor. The majority of searches on the web are people related and currently Facebook is handling a large percentage of people related searches. As developers contribute to making Facebook a better site through building applications (similar to the way Google currently builds applications, but through free R&D), Facebook can focus its effort on improving their search features. Look out Google, Yahoo, Microsoft, and AOL, Facebook has come to take the web industry head on. When you go to search for people, Facebook will soon be the place you go.