Scaling to 600+ million users in six years is a monumental task for any social network. Ask MySpace which is scheduled to layoff 500 workers this week? But with a Time's Person of the Year
nod, an award winning movie
, a graphic novel
and financial book-makers lining up to seed billions more in investment, one wonders if the Internet bubble we are currently experiencing will eventually burst when and if Facebook cashes out?Douglas RushkoffDouglas Rushkoff,
author and CNN
correspondent seems to think so. In a report he titles, "Facebook hype will fade," he equates the pinnacle reached by Facebook to that of AOL, 11 years ago. Remember AOL and all those free CDs you use to use receive in the mail and at the supermarket stores? Well, when it was announced its $350 billion merger with Time Warner was about to take place, Rushkoff saw this as the beginning of the end for the monolithic Internet company.
"I said that AOL was cashing in its over-valued dotcom stock in order to purchase a stake in a "real" media AOL Time-Warner deal
company with movie studios, theme parks and even cable - in short, the deal meant AOL knew their reign was over," states Rushkoff. And as it were, Rushkoff was right on target, as AOL's revenue stream became a joke and the company's image faded as the digerati's usage diminished overnight. Fortuitously, Google emerged online that same year to fill some of the void created in AOL's wake.
But six years ago, when Facebook arrived on the scene, MySpace was one of the most prominent first movers in the social media space. Rupert Murdoch's 2005 purchase of that network for $580 million occurred at the Web site's peak of popularity, and while people blamed corporate ownership for the social network's demise, Rushkoff writes this off as a reocurring cycle where valuations begin to ascend past the point of a company's true worth.
According to Rushkoff: "Now it's Facebook's turn." The mere fact that Goldman Sachs is not only investing in Facebook - it's also soliciting others to do so - is a major red flag. "This week's news that Goldman Sachs has chosen to invest in Facebook while entreating others to do the same should inspire about as much confidence as their investment in mortgage securities did in 2008. For those who weren't watching, that's when Goldman got rich betting against the investments it was selling," says Rushkoff.
Rushkoff's see social networks as transitory - a fad that rolls in, gathers millions of followers but will inevitably run its course. He perceives that the illusion of ubiquity and permanency was purposely created to continue to grow these entities exponentially. But like AOL, Compuserve, Friendster, Orkut and now MySpace, the Internet life cycles are showing a historic pattern of eventually peaking, selling off and fading from our memory.
While I agree that Facebook is presently over-valued and it too is about to peak, I don't believe Rushkoff's theory that the goal of Mark Zuckerberg is to cash out. Yes, Facebook will change, but the founder according to all records indicates he was never in it for the money - no matter how attractive Goldman Sach's investments will be.
As long as Zuckerberg is attached to Facebook, he will continue to grow the network beyond it's current box. Semantic technology and Web 3.0 are here and are slowly creeping into the world's zeitgeist. It's a space that's going to have machines do the heavy-lifting that humans did previously on the Web. Automation of all the content that has been data-mined for the last decade will be fully accessible to pump out information on all that exists in the real and online worlds.
Zuckerberg's Open Graph and Instant Personalization is just the first step in this process. In fact, it's a baby step. What the Web will look like in the next few years is content personalized
for any user that ventures out onto the Internet. Semantic technology like what Zuckerberg introduced this year with his now infamous LIKE buttons are tracking users and their preferences, and are drilling down daily to really sort out "why" you like the things you LIKE.
IMHO, that's where the future of Facebook lies, even as social media's bubble is about to burst. And while we might not be crazy about the fact that Goldman Sachs will reap monetary rewards as a result, it's clear they bet on the right horse at the right time. While Facebook is peaking in the social media space, it's just beginning it's ascent into the Semantic technology race. And if you don't believe it, just look to the East. China
has invested billions in this technology. Goldman Sachs' coffers pale in comparison. As Facebook reinvents itself to compete in Web 3.0's new space, it will have a formidable competitor in the Chinese.Mark Zuckerberg vs China from graphic novel, "Facebucks & Dumb F*cks"