One loss making company acquired another on Monday when Facebook shelled out $50m in cash and stock for the sharing service and social network, FriendFeed. Facebook is valued at $6.5bn.
FriendFeed has made little impact on the mainstream but it does appeal to the geek audience, including myself. In my mind, FriendFeed works best as an aggregator as opposed to a destination for content - its closer to the failed Facebook acqusition target, Twitter. The FriendFeed interface is very simplistic unlike the increasingly congested and hectic Facebook.
The user bases are very different, which suggests primary motivation is to absorb talent and expertise (particularly in the area of real-time services) rather than eliminate a competitor - FriendFeed traffic has stagnated for most of the year. The co-founders of FriendFeed and staff will join Facebook's engineering team.
I think its unlikely that Facebook will continue to support FriendFeed as a separate entity given the fact that both sites are burning rather than generating cash at this point in time. It makes sense for Facebook to consolidate but expect a lot of user angst from one or both communities when the integration process begins.
This is very early days for the social networking sector as a whole. Will Facebook still hold the lead when the industry begins to mature (whenever that might be but a fair few years from now)? Who knows? It will be interesting to see how this all plays out, not least in relation to the monetization and data privacy issues - the elephants in the room for this industry sector. This space won't stand still for long as evidenced by a wide range of social networking services out there nipping at the heels of Facebook.
Check out Twine, FourSquare, Posterous, Yahoo Mosh and MySpace (just joking).
Daniel Young, PR consultant, writes on the impact of new technology and the Internet on PR and corporate communications. Daniel is based in Australia.