Face­book isn’t cool, it is huge and lu­cra­tive

Weekend Argus (Saturday Edition) - - MEDIA& MARKETING - WILL OREMUS

I’VE never been im­pressed by the as­ser­tion, rou­tinely ad­vanced by tech pun­dits, that Face­book “isn’t cool any­more”. Of course Face­book isn’t cool any­more. It hasn’t been cool for years, if it ever was. It beat MyS­pace be­cause it was cleaner and more at­trac­tive, not be­cause it was cooler. You know what else isn’t cool? Search­ing for things on Google. Com­pos­ing doc­u­ments in Mi­crosoft Word. E-mail.

The fact is, con­trary to what some in Sil­i­con Val­ley would have you be­lieve, be­ing cool is not a re­quire­ment for a multi­bil­lion-dol­lar busi­ness. If any­thing, the two con­cepts are con­tra­dic­tory. So the fact that Face­book isn’t cool any­more does not mean that Face­book will soon go the way of MyS­pace. What it means is that Face­book has grad­u­ated from help­ing col­lege kids stalk and flirt with each other to be­com­ing an in­ter­ac­tive online di­rec­tory, com­mu­ni­ca­tion plat­form, and photo al­bum for a huge por­tion of the adult world. Face­book isn’t cool, it’s huge. It’s lu­cra­tive. It’s im­por­tant. Mark Zucker­berg gets that.

And yet col­lege kids still need ways to stalk and flirt with each other. High school kids even more so. And ide­ally, they’d pre­fer to do that on a plat­form that doesn’t dou­ble as a con­ve­nient way of si­mul­ta­ne­ously broad­cast­ing things to ev­ery mem­ber of your fam­ily. That is why the cool kids aren’t us­ing Face­book as much as they used to. It sim­ply got too big.

None of this her­alds im­mi­nent doom for Face­book. Still, Face­book’s busi­ness model is based on near-ubiq­uity, so the com­pany un­der­stand­ably feels threat­ened by any up-and-com­ing so­cial net­work that threat­ens to lure a large chunk of users away from its siren servers. That’s why Face­book bought In­sta­gram for $1 bil­lion in April last year, a time when no one else was valu­ing the pho­to­shar­ing app at even half that price. To­day, as I wrote about Snapchat re­port­edly turn­ing down a $3bn of­fer from Face­book, I re­vis­ited the col­umn I wrote last year about the In­sta­gram ac­qui­si­tion. From the fi­nal para­graph:

“In­sta­gram ap­pealed to 30 mil­lion users de­spite not be­ing a part of Face­book – and per­haps be­cause it wasn’t part of Face­book. And if that’s true, then Face­book has a prob­lem. Mark Zucker­berg can only buy so many $1bn com­pa­nies, and thanks to the app stores built by Google and Ap­ple, the sup­ply of tiny, po­ten­tially rev­o­lu­tion­ary star­tups is end­less. If it keeps on spend­ing like this, even Face­book will even­tu­ally run out of bil­lions.”

I was right about the lim­it­less sup­ply of anti-Face­books – the In­sta­grams, the Snapchats, the What­sApps and WeChats – and Face­book’s will­ing­ness to drop bil­lions of dol­lars to co-opt them. In fact, the Snapchat of­fer sug­gests the price is go­ing up.

That said, it’s now clear that Face­book isn’t go­ing to run out of bil­lions buy­ing th­ese types of star­tups.

Rather, there will be some that won’t sell, or that Face­book sim­ply can’t af­ford, and it will be forced to com­pete with them in­stead. In fact, Face­book did try to com­pete with Snapchat, by build­ing a sim­i­lar prod­uct called Poke, but it bombed. The cool kids knew what was up. And yet here is Face­book, still mak­ing more money each quar­ter than the last.

Face­book’s cool-kids prob­lem, then, is not an ex­is­ten­tial threat.

Rather, it seems to be an in­her­ent lim­i­ta­tion in the con­cept of a so­cial net­work for ev­ery­one. You can have ev­ery­one, or you can have the cool kids, but you can’t have both. I’m guess­ing Face­book will set­tle for ev­ery­one. – Slate

TREND­SET­TERS: Katy Perry, Justin Bieber and Lady Gaga have many Face­book “likes” but this doesn’t make Face­book cool.

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