Why Microsoft really wants to buy Facebook

If you’ve been following Web 2 you can’t help but notice, plastered on the front cover of the FT this morning, the $15bn valuation Bill Gates just handed to fresh faced Mark Zuckerberg (pictured) and his Facebook.

This doesn’t make sense if you think of Facebook as just another social network. The potential earning from display advertising alone doesn’t really stack up to $15bn does it?

However, since June, Facebook is now two things – first it’s a social network that lets you find old friends and share photos but second, and much much more interestingly, it’s an application platform.

You know the applications, those added extras you can play with friends like SuperPoke, My Aquarium, and Scrabulous. For now they are just for fun but the more serious apps are coming.

Why the Platform

The platform cuts “adoption friction” for new software because users start with having a password and being logged in, familiarity with how the user interface works and they’ve got their friends around them. With traditional web apps it could take 6 months for an ordinary non-technical user to get to this stage – with Facebook it’s 6 seconds.

The other serious application platform is Microsoft Windows. Mac and Linux/Unix are its only competitors left. There was a time when there were many, I had a summer job working for IBM selling OS/2 Warp (a Windows competitor at the time) and I can remember enviously watching the swarm around the Windows presentation stand in Gleneagles back in 1994…

The only swarm now is around Facebook and Microsoft knows it. The new platform war is for the social web platform. The competitors are Google (Orkut), MySpace, Yahoo, Facebook, MSN, and Linked In.

This $240m investment is a bit about advertising but I think it’s more about platform. The race to be the number one web application platform has begun and Facebook has a very big head start.

Tagged: , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: