Since the launch of its IPO, pundits have been predicting the downfall of Facebook. It's a popular viewpoint and certainly fun to ruminate on, but I don't think the 900 million-strong social network is going anywhere anytime soon.
First of all, there are no current competitors that have what it takes to sever Facebook from their dedicated and massive following. The only threat to Facebook in the foreseeable future is that a revolutionary new network will come along and sideswipe them, which has been the downfall of internet mammoths in the past (read: AOL, MySpace).
Second, Facebook is sitting on some major gold mines. The trick has always been how to monetize the network without sending users running for the door. They will have to tread lightly, but if they can successfully clear these three hurdles, they will not just survive as a business - they will thrive.
- Advertising: Although Facebook's ad network has come under fire of late and has yet to reach its potential, it's making great strides. The level of targeting is unparalleled by other ad network available, and once they figure out how to leverage that value, there will be no stopping them. Facebook Exchange, a retargeting platform set to be launched by Facebook soon, could be a game-changer. Essentially, it will allow third party retargeting, so when users visit an outside website and show purchase intent, they will be served an ad for that brand on Facebook.
- Media: People go to Facebook to connect with friends, but Facebook would like them to do more. Media consumption and sharing (news, video, etc.) is the logical next step. Partnerships with some publishers have already been formed, and major news networks could be coming soon. The ability to "subscribe" to pages is an important step and heralds a move towards making the site a content destination. Note that the subscribe option puts the choice in the user's hands. Nobody is forcing them to read content on Facebook - they are actively making that decision.
- Shopping: Facebook marketplace was, for all intents and purposes, a flop. But there is undeniable potential for making Facebook a place where people discover, share and purchase products. The Craigslist-esque marketplace (now powered by Oodle), is not the way to do it, but something that more seamlessly integrates with Facebook's organic social experience will be coming and if they do it right, it will work. There have been rumors of a "want" button, which would be a brilliant move, especially considering the rapid growth of Pinterest and the launch of dozens of similarly formatted social shopping networks.
What do you think? Does Facebook have what it takes to survive as a business? Let me know in the comments.