For now, Facebook continues to take over the world. Its global traffic is about to blow past MySpace's, its image (and Mark Zuckerberg's) has recovered from the Beacon fiasco, and it has raised a big enough cash pile that it should be able to power through any downturn.There are some flies in the ointment, however:
- For some early users, the thrill is gone. Our campus correspondent described how Facebook lost its appeal as soon as it tried to become everything to everyone, and we've seen evidence of declining usage in Comscore stats. The result has been less usage from the once-core user base.
- For some geriatric users (a.k.a., us), the thrill has never really been there. Having been raised on email and IM, it's had to get in the habit of visiting a specific site to figure out what everyone's up to, especially when email accompanies us wherever we go.
- The company has yet to figure out the right business model. Despite often being referred to as the "next Google," Facebook's financial performance actually doesn't look that much like the early Google's. Its growth is still very impressive, of course, but it has yet to develop its own version of AdWords
Most importantly, the "walled garden" social networking model--a single site that retains all your information and relationships and forces you to do most of your business inside it--could be analogous to the 1990s AOL: Amazing industry leader for the first few years, ossified, flawed model for the rest of time.