MyFace and SpaceBoook

So here is another Information Systems related post, this time on where we think FaceBook will be in 2 years. For our last Information Systems class, we had the country head of Google Spain, Portugal and Turkey come into class and we had a very engaging discussion on Google, it's business model, strategy and challenges. The guest speaker was brilliant and very well spoken. For our next class, we have the country manager of FaceBook coming into class and hence we need to articulate our thoughts on where we think FaceBook will be in 2 years time.

The two issues that I have chosen to discuss are probably not overly surprising:

1. FaceBook's privacy issues and how they will be dealt with.
2. FaceBook's acceptance in conservative countries.

Lately, there has been an uproar in the online community about the privacy of information on FaceBook. After receiving a torrent of complaints over the last few months, FaceBook finally decided to change it's security settings page to enable users greater control over the privacy of the information they post on the site. Now the question is how this knee-jerk response will affect the business of FaceBook in the short and long run.

FaceBook's main source of revenue is online advertisements. Hence, FaceBook's revenue is directly dependent on the amount of traffic it generates and the amount of information people share. As people share more information, ads get more relevant, users increase their click-rate on these ads and FaceBook makes more money as a result. It seems as though the privacy concerns have caused a lot of people to complain about FaceBook but it certainly does not seem to have reduced the number of users on FaceBook. Reports suggest that the number of users on FaceBook is approaching 500 million. 500 million !!! If FaceBook were a country it would be bigger than the United States or Europe !!

So while privacy issues on FaceBook have been discussed heavily in the media, I don't think that they will cause a significant dent to the growth of FaceBook. Especially because I see the major growth of FaceBook happening in emerging economies and developing countries. And that brings me to my next point.

Bangladesh and Pakistan recently banned (and subsequently un-banned) Facebook. The objection in these countries was based around some caricatures drawn of the prophet mohammed. I must admit, out of curiosity I visited the FaceBook page that was causing all this uproar and the content there was so despicable I felt my skin crawl. I am not a muslim and I don't have any strong religious affiliations but I was still shocked to see the level of grime that some individuals are capable of.

Xenophobia should never be tolerated and FaceBook was right in moderating this content for Bangladesh and Pakistan. I feel that such content should be removed from the site and from the internet altogether, however, this does bring up a freedom of speech issue. One of the main drivers for the success of FaceBook is that it gives it's users a voice. Does FaceBook really have the right to control what people say ? If not, how will FaceBook penetrate markets like Pakistan, Bangladesh and of course, China ? For FaceBook to continue it's phenomenal growth rate, is it not essential for it to enter these markets ?

In summary, I think that FaceBook will continue to grow over the next 2 years but I am not convinced that the company will be able to sustain the growth rate of the last 1 year or so. I don't think that privacy issues will have a major curbing force on the growth rate of the company but I think acceptance and penetration in conservative countries like Bangladesh, Pakistan and China will be the most critical driver of FaceBook's continued growth.

Finally, here are some personal thoughts on the evolution of social media. People of my generation can still remember life without the internet or even the personal computer. (Just to be clear, I am turning 27 this year, so Im no old prune....:)). People of the generation after me will not know what life is like without the internet. Perhaps, in the generation after that, people won't know what life without social network. The new trend of today, is likely to become the new normal very very soon......