I agree that talks of MySpace’s demise are overblown, but judging by Facebook’s euphoria, you have to ask yourself if it’s more about Facebook’s seemingly limitless potential more so than MySpace’s demise.
I think the blogosphere - and mainstream media in fact - has lost.its.marbles over Facebook. I think this has something to do with
a) we getting bored of Google’s dominance,
b) having seen MySpace’s explosive growth, nothing is unrealistic
c) way too many soothsayers online trying to be “first one to make an outlandish” claim.
Oh, I’m in this lot, when I write things like “Google to surpass MSFT in market cap by 2010,” you’d think just because someone handed me an Excel spreadsheet and I can find my way around an income statement, I knew what I was talking out.
Jokes aside, this morning I woke up and things had just escalated dramatically since last week’s launch of the Facebook’s platform. Bloggers were trying to one-up one another with more and more outlandish claims: yesterday I wrote “Facebook’s 100M users a matter of when, not if,” and this morning Paul Allen (the lesser) claimed “Facebook to be Largest Social Network.”
Not to be outdone, VC Josh Kopelman pretty much called for the demise of MySpace. Fred Wilson chimed in too.
Anyway, the following post is sheer madness and really more for entertainment, but I extended my usership growth model for Facebook and ran some numbers trying to estimate when:
a) Facebook will surpass MySpace, after all, even though MySpace has 100M users vs. 25M for Facebook, apparently, MySpace is experiencing a weekly growth rate of 1.92%, compared to Facebook’s WGR of 3%. I got 1.92% by simply dividing 200% growth over 2 years divided by 104 weeks (MySpace has in fact tripled in the two years that Rupert Murdoch’s News Corp. bought it). For Facebook’s 3% WGR, I used Zuckerberg’s quote.
The answer: assuming constant AND exponential growth (not really realistic but hey, who’s keeping track) in the first week of August 2009, Facebook will surpass MySpace in usership. No, I haven’t been drinking yet when I actually juxtpoase constant AND exponential growth, and what I mean by it is simple: Facebook and MySpace are social networks, highly viral, so growth is not linear. The constant part is 3% per week, but the exponential refers to the base, daily additional user signups growing by the constant growth rate. I know, it’s highly unconventional, but when you consider that MySpace tripled in 2 years without much of News Corp.’s push and Facebook doubled in five month, it’s not impossible either.
Here are each firm’s tables:
Yes, we’re kidding. I think.
FACEBOOK’S GROWTH
MYSPACE’S GROWTH
All right, henceforth, no more Facebook, I’m going into Facebook detox, for at least 24 hours. To keep you entertained:
Related:
- Facebook 100M users, a matter of when, not if.
- Facebook OS: Be careful what you ask for.
- Facebook: IPO vs. M&A.
- Facebook’s 2008 to do list: File for an IPO.
- Should MSFT Turn its Attention to Facebook?
- Peter Thiel: Facebook is Worth $8B.
- Murdoch: “MySpace worth $6B”, if so, then break up FIM!
- Facebook to be worth $2.35B by 2010.
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WatchMojo NewsletterIf Google was building, in John Battelle’s words, the database of intentions, then Facebook has been refining its database of connections.
Last year, after learning about the Spock “people search engine,” I wrote that MySpace was the closest thing to a search engine on people, because it was the social network with the most amount of people in it. I called it the directory of people.
This year I asked why doesn’t LinkedIn and Facebook create a directory of people’s contacts, on an opt-in basis.
Last week, I wondered what was keeping Mark Zuckerberg from opening up his massive index of people - 24M strong - to Google and allow the search engine to index it.
Today I realized why. Facebook is on its way to be the directory of people, I’m not alone, apparently.
Google indexes practically anything, but it cannot index Facebook yet. So if you want to look for people, you can try on MySpace (good luck), you can try a random search on Google… but in all likelihood your best bet is to try on Facebook. And so long as Google cannot index Facebook, then Facebook’s got an edge, leverage. Don’t get me wrong, there’s a strong likelihood that at some point, Facebook opens up its database for Google to crawl and index. But with 100% growth in 5 months, why bother now?
Indeed, Facebook just surpassed - despite its smaller size - MySpace in that regards. And, Google is well aware of this risk factor.
Connecting the dots: when Google paid $3.1B for Doubleclick, everyone criticized and ridiculed Microsoft for losing that battle. MSFT then went on to win the real crown jewel in online advertising: aQuantive (disclaimer: I own shares in AQNT). But, MSFT inadvertantly also ended up making Google part with 30% of its cash hoard, using $3B out of $10B.
Considering that Facebook has turned down offers of $800M, $1B, $1.6B and maybe even Google’s $2.3B recently, one must wonder, what would it take to take out the Facebook threat?
MSFT currently has an ad relationship with Facebook. I’ve said for a while that the only two companies that can take out Facebook are a) Microsoft and b) my old boss Rupert Murdoch’s company, News Corp.
Related:
- Facebook 100M users, a matter of when, not if.
- Facebook OS: Be careful what you ask for.
- Facebook: IPO vs. M&A.
- Facebook’s 2008 to do list: File for an IPO.
- Should MSFT Turn its Attention to Facebook?
- Peter Thiel: Facebook is Worth $8B.
- Murdoch: “MySpace worth $6B”, if so, then break up FIM!
- Facebook to be worth $2.35B by 2010.
Memorial Day, 2007 will go down as the day Rupert Murdoch made up his mind to make a run for Facebook.
That is, of course, if he ever was on TechMeme, for the TechMeme faithful have already made up their mind: Facebook is the best thing since sliced bread, while MySpace is the next Prodigy.
Why don’t we just start a Facebook group: Mark Z. for President in 2008? Better yet, let’s rush to MySpace’s HQ and burn it down? Yeah, that would be a good idea. Folks, can we please get some of our composure back?
Is Murdoch panicking? Did he buy a dud? Is he calling his investment bankers and lawyers and trying to make Mark Zuckerberg a Dow Jones-esque offer? Maybe.
Maybe Rupert Murdoch is regretting his purchase of MySpace…
Or, maybe not, he did after all buy MySpace for “only” $580M. So that is increasingly looking like a very small investment.
Facebook is experiencing torrid growth: from 12M to 25M users in 6 months, yes, and daily growth rate of 150,000 users. MySpace is at 100M users, adding 300,000 users per day. Any way you look at it, both companies are mezmerizing.
My gut is that Murdoch is mulling a reverse average cost dollar basis strategy by convincing himself that he can indeed pay $3B or more for Facebook because that will mean that he paid less than $2B for each of the two popular social networks.
Of course, will Facebook accept such an offer? My gut says that if Mark Zuckerberg can walk away with a $1B payoff, or $3.3B for the company, he just might accept it. Keep in mind people, that all of this Facebook OS talk is great, but this is still a company with $150M in 2007 revenues with no real guarantee that it can scale revenues past its current levels.
Related:
- Facebook 100M users, a matter of when, not if.
- Facebook OS: Be careful what you ask for.
- Facebook: IPO vs. M&A.
- Facebook’s 2008 to do list: File for an IPO.
- Should MSFT Turn its Attention to Facebook?
- Peter Thiel: Facebook is Worth $8B.
- Murdoch: “MySpace worth $6B”, if so, then break up FIM!
- Facebook to be worth $2.35B by 2010.
