Isn't this a known trajectory for all such [solutions]: ease of use, multi-platform, originally advertised privacy and security concern, critical mass gain ==> sell / be acquired (latter requiring a little extra $$$ effort from the acquirer part) to FB/Google/Amazon/etc.?
I think FB caught onto this a long, long time ago. Back when they saw the adoption & activity rates of the then competing WA & Instagram. The only difference being at the time of this analysis FB owns most of the apps people are migrating to.
Its not that threatening - as they already proved they know how to counter through acquisition or competition and have a good track record of being able to monetise new properties.
Critical mass is just one of those things that will be a flaw until it isn't.
Facebook has this "decisive competitive edge" in that the fact that it is seen as the only alternative is what reinforces it being the only alternative. It's good that these other solutions are free and open source because most commercial competition would dry up and fail.
But for these things that bump along and grow slowly in a sustainable way, they might actually approach an inflection point where things will snowball. At least I hope so!
Greplin et al always have the exit scenario where their product is so much better than whatever (say) Facebook has in-house that Facebook buys them as a social-search talent-acquisition play.
This sort of scenario might be easier to identify and invest in than "the next Facebook".
This new offering feels a natural outcome now that the core product (fb.com, Messenger) user base starts to saturate. Previously they could just focus on international expansion on existing product, now the approach needs to shift. And that might be the reason why FB has so little in house built products v.s. products via acquisition, compared to Google.
So there's a growth pressure across the company's structure chain. From this point on, it would be interesting to see what other products FB would launch to leverage their huge social network. My 5 dollar bet would be cloud infra that compete with AWS and Azure - the selling point would be, hey join FB Cloud Infra and we'll help you reach 2 billion FB users!
You're absolutely right that this is a similar dynamic. At this point this is FB's MO and you have to be a fool not to anticipate it as inevitable in each ecosystem/market they develop.
Which is pretty plausible, right? (Becoming co-dominant with google).
The other thing to consider is the competitive/strategic landscape. It's not so much that the market 'assumes' that Facebook will invent new ways of making money, but rather that regardless of who figures it out, facebook is so incredibly well positioned at the moment (ubiquitous social network) as to give it a large competitive advantage, and let it eat other companies' lunch.
The market has examples of other similarly well-positioned companies, like Microsoft in the early 90s, to draw on.
Yes this is PR speak. These companies have 2 possible exits:
1. Get big enough to build and scale an ad network and other services
2. Get bought by an existing scaled network
Option 2 is far easier which is why startups/VCs optimize for it. FB benefits by letting them do all the experimentation and then acquiring when they have proven traction, effectively gaining control of the new users for less money than competing outright, while the founders get a nice payday and move on.
What gets really interesting is when the same VCs behind FB are the ones kicking off these new experiments, a nice little money machine once you're in the loop.
Facebook "could" go the way of Myspace, but I'm guessing that their talent is significantly better than what Myspace had. By all accounts their engineering talent is on a similar level to Google. They're almost certainly not as good a buy as the Google IPO in 2004, where the search advertising market was still in its infancy, but look at Apple. All it takes is one amazing product that helps to spawn a brand new market and they can double their market cap. I'd guess that Facebook has as good a chance at doing that as Apple, Google, or anyone else. That said, I agree that until they actually are able to pull that off their stock is overpriced. It will probably also stay overpriced for a few years no matter what happens.
Is an interesting one, assuming they struggle to get new users on the main platform.
FB have a lot of hope riding on Marketplaces, but it's viability is entirely down to FB being so ubiquitous.
Product suggestion (graph is still their core business, obviously), and being able cross promote their products to a captive audience. They basically can't pivot because everything they want to do relies on finding ways to leverage the data they generate.
Can't figure out where they're heading in the longer term tbh. Would fully expect IG Marketplaces to follow in the next couple of years.
It's about leverage. If they can build equal or better things than what they built inside of Facebook, it makes it easy and likely for Facebook to acquire them. At best Facebook can copy them, but then they are chasing their own tail. If path doesn't get acquired by FB, they can sell to someone else who wants to get some FB-like magic, or shoot for the moon and become a destination in their own right.
Facebook was the next Google, Google the next Microsoft. Analogies are never perfect, but that's what I meant. The next big thing, in terms of cash returns to early/mid investors.
For the purposes of this argument "next Twitter/Instagram/LinkedIn/etc" work too. WeWork bought meetup for $150m. They sold it for less. Facebook is worth thousands of times more.
My point is that considering the price of meetup, the odds of turning it into something worth 10x or 100X bigger create a risk/reward reality that is decisive. That's all.
Your bet on "$0.5-2B companies in the B2B space," works fine in this context.
It's looking more and more unlikely every day. The Facebooks and Googles have such massive reach that they'll just buy whatever competitor threatens them. They and others have been doing it for years.
Back when that deal was being floated, it was pretty obvious that most of the potential buyers would probably cause users to leave in droves. Especially since the most likely buyer was looking like Microsoft.
Facebook is very dependent on being a single entity. If it sells, it has to sell to a company larger than itself, and that's about the only thing scarier from a user standpoint than what Facebook has already done.
It's hard to imagine Facebook going the way of Yahoo. Facebook has a relentless focus on their product and continuing to ship and push the envelope. I don't know too much detail of Yahoo history, but it seems like they took their eye of the ball early and started spreading themselves really thin across a ton of disparate products and acquisitions.
I don't see anybody blindsiding Facebook on social the way Yahoo was blindsided by search. The bigger risk seems to be that there is simply no pot of gold at the end of the rainbow to justify a 100B valuation IPO valuation, thus souring everyone on FB and social before we see what the true potential was.
This is like Tesla entering the market with a high end sports car, or Uber entering the market with only black cars. They're targeting a smaller niche of wealthy early adopters to tweak the service and revenue model and will eventually move downmarket to address a broader customer base (if they're successful with this initial niche). This is an ideal niche to start with because a) they have the money for it b) they're more tech savvy and generally forgiving of product shortfalls for bleeding edge services and c) they have lots of connections and can spread word-of-mouth more effectively (think Chris Dixon). It will be interesting to see if this becomes more of an API for other on-demand platforms such as Seamless or if it will be standalone. Also curious to see how this will stack up to Facebook's M and if they've built something defensible enough to pose a real threat.
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