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The Power of Critical Mass

Gordon Kelly


Why Facebook Terrifies Apple, Google & Microsoft

This week - as everybody knows - Facebook passed 500m registered users.

"As of this morning, 500 million people all around the world are actively using Facebook to stay connected with their friends and the people around them," proclaimed debatable Facebook creator and undisputed CEO Mark Zuckerberg in a relatively muted blog post.

The tone was in stark contrast to the wall-to-wall news coverage of this milestone, triggered because a) it was a monstrous (and nice and round) number and b) because growth charts allowed the world's media that most rare of graces: a considerable notice period. Backing up the headline announcement were analysts, reporters and financiers all trying to work out just what the achievement meant. Most of them got it wrong.

The simple fact is Facebook is extremely well positioned to become the largest and most powerful company on the Internet. This is a radical statement for a 6 ½ year old business that only turned in its first profit last September, but nonetheless it runs true thanks entirely to one thing: critical mass. Let's roll the numbers:

The Stats

It took Facebook four years to reach 100m users. It took 11 months to reach 200m and 15 months to reach 500m. 24.2m of the UK's 62m population have Facebook accounts - that's almost 40 per cent - and likely over 80 per cent of its target demographic. The UK isn't alone in its addiction either, with 41 per cent (127m) of Americans signed up while over 500bn minutes are spent globally on the Facebook site each month - a number also growing rapidly.

Taken as a country Facebook's 500m strong membership would make it the third largest country in the world easily displacing the 309m people living in the US with only billionaires India (1.2bn) and China (1.3bn) left to shoot for.

Perhaps most worrying is Facebook also has no credible rival anymore. MySpace hit 100m users in 2006 yet now has just 66m. Flickr membership is falling, Bebo is in crisis, so is Friends Reunited, LinkedIn is currently limited to business use, the launch of Google Buzz has been farcical, Orkut can't attract anyone other than Brazilians and Twitter - while certainly on the up with 75m users - has seen growth slow dramatically due to a more niche business model.

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