I can see this happening.
Facebook is the penultimate social networking site. They have everything that Microsoft could ever want with respect to trend marketing. As last count, Facebook has some three hundred million users, the majority of whom are already running at least one Microsoft product. And in both counts, this number is growing everyday.
Facebook is now where most users spend their time. Whether they are watching television, at work bored at their desk, or absent-mindedly playing with their mobile devices. Users do not go randomly “surfing” anymore. They would rather skip from wall to wall checking out friends of their friends, and so forth.
The creators of Facebook understand this trend only too well, and to that end I would invite you to take a closer look at Facebook Connect. Facebook Connect is a series of API’s that allow you to login to various sites (such as X-Box Live, Hulu, JibJab, and the Gawker Media Network, among others) with your Facebook I.D. Once logged in, users can then post information and updates from these sites to their wall and those of their friends. They extended this feature recently by allowing users to search these sites from within the Facebook platform.
Facebook is also quietly implementing what is known as Virtual Currency. This is literally a goldmine for them as this allows them to accelerate their extensions by putting a “Like” button with user pictures on these websites. The concept of virtual currency is still quite new but it is clear that it can do much, much more. As Mark Cuban writes, “your favorite website doesnt know it yet, but Facebook is in the process of annexing it.”
The trend shift to a “for-profit” corporation is also made obvious by some of the internal changes as to how Facebook manages virtual currency. Let us take a look at a few of them in the subsequent paragraphs.
Facebook recently has given users the ability to purchase Facebook Credits, which is their new virtual currency system. The prices of virtual gifts last year were quietly changed from U.S. Dollars to Facebook Credits, with each credit now costing $0.10 cents. They have now enabled Virtual Gifts, a process that allows users to give credits to one another. From there, they expanded the virtual currency gifting program to branded virtual gifts (branded gifts are things like Caramilk chocolate bars, Harley-Davidson motorcyles, and everything in between – nothing generic).
In August of last year, Facebook took the idea of virtual currency international, opening up fourteen different international currencies. The cost of the virtual gifts still stay the same, however. Soon – I’m sure they’ll add more and more currencies as Facebook becomes increasingly popular with users in those countries. They have also allowed developers into the gift shop to pawn their physical gifts as well. So – while the gift shop was always just items from Facebook for Facebook users – now you purchase physical items with Facebook credits (such as flowers) and send them to anyone. You can pay for them by purchasing Facebook credits on your mobile cell phone and having them billed to your number.
This is not to say that Facebook should not be allowed to make money, but the forecast of higher earnings would certainly establish their market value considerably higher than it would with lesser earnings. To this end, the more they are worth, the more another company will have to pay to acquire them.
Now, while these changes unto themselves do not impose upon your privacy, let us switch gears for a few paragraphs.
What do you call an application that secretly installs itself on your computer without your permission or your prior acceptance? That’s right, folks, you guessed it! Malware.
As referenced earlier, with respect to Facebook Connect, if you visit certain sites while logged in to Facebook, an app for those sites will be quietly added to your Facebook profile. You don’t have to have a Facebook window open, you don’t need to signed in to these sites for the apps to appear, and there doesn’t appear to be an option to opt-out anywhere in Facebook’s byzantine privacy settings. Facebook is having a very difficult time with respect to managing the privacy settings of their users, and to think that it will get worse before it gets better is not unwise. It would therefore be good advice taken to not post anything to Facebook that you would not want to share with anyone else.
Now, let us take a look at the big three in the industry, and how they relate to Facebook. You have Google, Apple, and Microsoft. Of the three, which company would love to have all of our personal information, our pictures, our friends, our family members, our employers and business associates all in a database that is extending out and gathering information about what we like on sites that exist outside of Facebook? Here’s a hint. It’s the only company of the three that has the cash on hand to pay thirty or so billion dollars for Facebook. Technically, they are the also the only company that does not have a successful mobile operating system.
Microsoft.
Google has Android and does not interact with its users. Apple has the iPhone and interacts a little bit with its users. Microsoft has a ready made desktop and mobile operating system that would work very well with the Facebook platform. Could you imagine a hybrid Windows/Facebook mobile operating system? I sure can. And with all that data that Facebook has accumulated about us, what do you think the marketing wizards over at Microsoft could do with it?
Finally, let us not forget that Microsoft already owns a 2% stake in Facebook. This in of itself gives them the inside track to any further purchase or outright takeover. Furthermore, in that agreement, you would have to be a fool to think that Microsoft did not have some kind of right of first refusal on shares should Facebook decide to IPO themselves.