Could Facebook Become The Next Microsoft?

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Amongst all the noise today over Facebook‘s acquisition of Parakey, little has been said on what the acquisition means for Facebook in the broader sense. Robert Scoble says that Facebook is the new data black hole, noting that many of his favorite apps are now appearing on Facebook. Facebook is starting to become the one stop shop for content and interaction, be it through feeds, blog creation, image uploading and just plain ol’ social networking. Although it’s not the market leader yet, there is no argument that Facebook is rapidly growing and more and more people are using it.

Facebook v Microsoft: the early years

If you’re a member of Generation X, you’ll know the history; if you are younger you may not. Once upon a time the Microsoft Borg was not as almighty as it is today. Back in the 80′s consumers had a smorgasbord of choice; this was a time when PC’s ran DOS and were not in every home. Platforms ranged from the Commodore machines, through to Atari (which at the time dominated the music creation business), through to Apple. Operating systems were as diverse as the computers that ran them. Then somewhere in the 1990′s this changed. The reason was Microsoft Windows. Windows was a proprietary platform for which you could build things on, and developers did just that. What was once a fairly niche offering evolved into a platform that provided something for everyone. By the mid 1990′s, aside from a small number of Apple fans, Windows PC’s simply killed most of the competition.

In 2007 the computer wars are now nothing more than a footnote in history. Most people access the internet by PC’s running Microsoft’s Windows platform. The web itself though provides more choice than was ever available in PC’s and operating systems. Competing systems power millions of web pages.

In May 2007 Facebook launched F8, the Facebook Platform. In a market place that was rich with choice, Facebook offers a platform from which interactive applications can be run exclusively from Facebook itself. Although today it’s far from becoming a dominant platform, in little over 2 months 1000′s of new applications have been offered to Facebook users, with many, many more to come. The richness of the various applications on Facebook is driving user growth; simply people flock to where things are happening. In many ways the growth is similar to the growth rates in the early days of Microsoft Windows.

Facebook as a Web OS

Facebook’s acquisition of Parakey says one thing loud and clear about Facebook’s intent: Facebook wants to become the No. 1 destination on the web. The growth strategy is two fold:

1: use third party developers to create compelling applications/ content
2: acquire other companies and incorporate their offerings into Facebook to provide more compelling applications/ content

Although Web Operating Systems lack wide user uptake to date, the amount of venture capital flooding into Web OS startups is a clear indicator that smart people believe that Web Operating Systems will eventually be a huge hit. Facebook knows this; what buying Parakey does is provide Facebook with a base from which it can not only become a Web OS provider, but leverage it’s user base to become THE Web OS provider.

Imagine

Imagine that in 2-5 years time Facebook has become the No. 1 destination on the web. Facebook as a Web OS is the leader in online storage, online applications, email, blogging and of course social networking. How people interact with Facebook has changed; Facebook OS has absorbed Facebook F8, all previous Facebook applications work under Facebook OS, but they work more like Windows does today; Facebook has become your desktop and not just an internet site. The Facebook Paint application substitutes Photoshop, Facebook Email is a superior offering to Outlook, Facebook Office (Facebook having acquired either Thinkfree or Zoho) provides the market leading word processing and spreadsheet platform.

It might sound far-fetched, but this is exactly the position Facebook wants to be in and the direction they are headed.

The Google comparison

Facebook’s direction isn’t new; it’s the same direction Google has been heading in for years. Google has long since abandoned its original premise of being a search company alone in a quest to become the No.1 destination of all things to all people. Gmail, Google Docs, Google Calendar, Google Desktop…this list goes on and on. The difference with Facebook will be how the various applications are glued together, and this is where Facebook already has the advantage: Facebook’s origins as a social networking site means that everything they launch is linked in to that central core. Google has great products, but very little to tie them all together. People use Gmail or Reader as stand alone offerings, by comparison everything in Facebook is interlinked.

Conclusion

It’s difficult to be against Facebook at this time. The platform strategy and now the move into Web Operating Systems are fairly lauded as being smart business moves, and of course the Facebook product itself is constantly improving. From a users perspective, a centralized one-stop shop of applications has great appeal, particularly in a marketplace where choice can actually be overwhelming.

Yet Facebook is a closed shop; there’s no open source in Facebook and every app built for it will not work with other sites. Facebook could easily become the Microsoft Windows of tomorrow. Microsoft will tell you how better the world is for having their product, and little doubt that Facebook will spin a similar line; yet it’s not unreasonable to question whether uniformity and centralized control ultimately delivers better outcomes for everyone. Of course Facebook isn’t at Microsoft’s level yet, but we are better asking these question today and tomorrow rather than 2-5 years time when by that stage it may well be too late.

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