Facebook platform’s turns 1. Here’s my post from last year.

Reading all of the non-news stories about Twitter this year, I can’t help but think about Facebook last year.

The two companies have a few things in common.

Last year, a lot of the bloggers and tech journalists were writing about Facebook; this year, it’s Twitter.

Last year, a lot of analysts were wondering about the business model of Facebook; this year, the questions are being asked over Twitter’s model, especially in light of the recent $15M funding round done at a nosebleed $80M valuation.

Both companies have also adopted the platform approach: Facebook’s developer programing turning 1 this week; and Twitter’s API having spawned many derivative products.

Both companies also suffer from Google envy in one way or another (that merits a separate post), insofar as both are desperately trying to conceive (in Twitter’s case) or develop (in Facebook’s case) ad-based business models for a brave new world. The problem is that both companies have predispositions that make them far better e-commerce platforms than advertising plays… but because VCs are gaga over Google and envious of advertising models… then guess what, the management teams are barking up the wrong trees.

Don’t take it from me. Go with history. Both companies (at least Facebook) point to how MSFT became an operating system that others built on, fair enough, granted. But last time I checked, MSFT’s record in ad-supported businesses are abysmal. MSFT’s cash cow are transaction-based (licenses, subscriptions, etc.) - things that are similar at least conceptually to e-commerce. Of course, e-commerce does not have the same margins or sex appeal as advertising…

All to say, if either company wants to have a shot at being relevant in the advertising business (which remains the biggest opportunity and market out there given the size of global advertising at $500B with online not even at $100B), then both companies need to stop worrying about APIs, platforms and go back to the drawing board.

Don’t get me wrong: Facebook is a fantastic company, like many I have lots of respect for Mark Zuckerberg and his backers and board are second to none… however, if Facebook and Twitter want to become technology companies, then they need to realize that Google remains the only successful ad-supported tech business and Google’s core offering is conducive to advertising; Facebook and Twitter are anti-advertising at their core.  Nothing will really change that.

Ironically,

1- Not only has Facebook largely missed the bull’s eye with its API (and don’t even get me started with Twitter),

2 - but I would say that any company that has a strategy that revolves around Facebook or Twitter is even more of an clown. But that’s just me.

On #1, yes, Facebook has grown since the launch thereof, but the amount of extra crap has ensured that most advertisers won’t come close to Facebook with a 10-foot pole, but it has also made Facebook less desirable to some/many users. I probably log in to Facebook once a week now, compared to 5 times a week before.

On #2, yes, Facebook (like MySpace, YouTube, etc.) brings a flood of eyeballs to companies, but do you want your future to be in the hands of a bunch of VCs waiting for that paper $15B paper valuation to bear fruit? I wouldn’t.

Anyway, here’s my post from last year when the Facebook API launched.

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