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James Hong

Saturday, April 14, 2007

Enough with the Facebook/Friendster analogies...

I get annoyed when i read articles these days that try to compare the facebook to friendster.. Here's one for instance.

Anyone who has used facebook knows that it's no friendster. As jonathan abrams has alluded to, friendster's hugest problem was scaling the site properly. the facebook has done it extremely well, and on top of that, they have made their site a utility rather than a flashy new media site..

In 5 years, i predict that the facebook will be a public entity, and easily a multi-billion dollar company... and that valuation will be justifiable based on actual business fundamentals, not on hype.

and by the way, if jonathan had sold his company for $30 million in stock, it would NOT be worth a billion dollars as that fast company article mentioned. Someone correct me if I'm wrong, but the valuation google was putting on itself back then was around 10 billion. Ignoring any dilution from their public offerings, that would place the value of that stock at around 400 million. Not chump change by any measure, but can we please stop throwing the billion number around just to make some sort of sensationalistic effect?

3 Comments:

Blogger Basta303 said...

I'd agree with it being an idiot analogy. The NY Times article some months back said it best--friendster failed because they were too intent on control (engineering) of the site, whereas myspace et al. allowed the users the chance to define the site. Any entrepreneur should realize that "customization" is a valuable tool and that the web is one of the fields most amenable to it. They read the tea leaves, but didn't drink the tea.

As for the future prospects/value of facebook; I'd take a split bet on that one. Even though they are dominant in a specific social space, they would need to ensure that their business plan provides proper support for solidfying that position. I'm not sure I've seen that; and I'll not state publicly what I think they should do. After all, YMMV...

3:08 PM  
Anonymous Wash Me Please said...

Why exactly is friendster considered a failure? Isn't the site still up an running? One would assume that if a business is making enough money to turn a profit, then it's not really a failure, right?

Is it because they didn't make googol dollars? Get it, googol dollars? Yeah, it's not that funny, but whatever.

8:44 AM  
Blogger Jen said...

I recently learned that Facebook runs on a LAMP installation. The fact that the site is able to scale with MySQL is surprising given how many users they have. I'm also impressed with how serious they feel about spam and their complex karma point system.

I completely agree that Facebook is not like Friendster. It seems like one of the few social networking sites that listens to their users and reacts accordingly, and isn't afraid to publicly admit to screwing up. Also, it's such a relief to see a site that doesn't encourage their users to create crappy pages with glaring bright colors and busy backgrounds, something from the 90s.

6:14 PM  

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