Popularity, Target Markets, Money & Multimedia
"Is Facebook the Internet?" It was a polite question from the daughter of a friend. It took a moment to hide my incredulity, but then the realisation dawned: maybe it wasn't such a stupid question after all.
Taken on a literal level the notion is ludicrous. The Internet is a network of networks, a global system of interconnected computers and servers all tied together through a common communication language. Facebook is merely one of millions of sites which runs on the Internet. 500 million users may make it hugely popular, but the planet has 6.9 billion (6 900m) people. Simple maths suggests that works out to just under one in 14 people using Facebook around the Globe - hardly ubiquitous. The trouble is the overall picture isn't simple.
To use Facebook you need access to the Internet. 2010 estimates put global Internet access at 1.9 billion people. Facebook use becomes one user in 3.8. Of this Internet access, the highest penetration is in developed countries. These countries have aging populations. One in five people in America will be 65 or older by 2035. Your grandparents may have Internet access, but are they on Facebook? Given Facebook hasn't updated its member numbers since July and given it grew from 100 million to 250 million between July 2008 and July 2009 and from 250m to 500m by July 2010 just what percentage of its global target audience does it now reach?
It's popular, so what? That hardly makes Facebook the Internet!
Ordinarily I'd agree with you. The popularity of Lady Gaga hardly makes her all 'music'. Facebook is different. Lady Gaga doesn't stop you listening to other artists. Facebook, by its very nature, drags you away from MySpace, Orkut, Bebo and Friends Reunited. It kills diversity and drives them out of existence. Unlike many sites and services designed to coexist with one another, Facebook replaces. What's more it looks determined to try and replace everything.
Just days after being stumped by an eight year old Facebook made things even more difficult. On 8 March Warner Brothers became the first major media company to offer a movie for rent through Facebook. "This is definitely a test" said Warner digital distribution president Thomas Gewecke to The New York Times. It didn't matter, shares in online rental store Netflix dropped five per cent the same day.
Equally significant was how Warner implemented the rental. Users pay with Facebook credits. Until now credits have been a reasonably niche part of Facebook. They were introduced two years ago and limited primarily to virtual goods inside 'free' games like FarmVille and Mafia Wars. Facebook was biding its time. Facebook credits quietly went on sale at US megastores Wal-Mart, Target and Best Buy last year. Now its currency is open to all Facebook applications with 400 developers signed up. What's next? Mark Zuckerberg's head on a virtual coin?