I’ve been reading much of what has been written today concerning Facebook’s announcement about opening up the new Facebook Open Stream API. From that reading; including the official blog post by Ray C. He on the Facebook Developer Blog, I’m left with a whole bunch of little questions as well as one big one.
What is Facebook?
Sure we all know it’s the hottest social network on the planet at the moment but what are they trying to achieve? For as much flack as Facebook might have gotten during its rise to the top it was well understood that it was a closed environment. You wanted to interact with your friends you went to Facebook and logged in. You played games, traded messages and used Facebook apps while fighting off Zombies; but it was always inside of Facebook.
As far as brands go, Facebook has to rank right up there with Google, Microsoft and Apple. Chances are your corner barber or hairstylist is on Facebook right along side your mother and father. Even though Facebook has continually done things to alienate their user base the membership keeps climbing. Also climbing is the associated cost of that increasing membership. The problem is that the majority of the user base is non U.S. and as a result the those costs aren’t being offset by any advertising revenue that is more U.S. centric.
So to try and reverse that revenue loss Facebook has increasingly turned to services like Twitter and Friendfeed and duplicated many of those service’s features into Facebook in the hope that this would pull US centric members into the service. Now today they totally swallowed the Twitter and Friendfeed API ideology in the hope that this will encourage developers to build interfaces to Facebook that would be more receptive to users.
The problem is that this does nothing to alleviate their most pressing problem – increasing revenues in order to offset the cost of the user base and produce profits to justify their $15 billion valuation. By making the current Open Stream API; with more to come if the comment on ReadWriteWeb by Facebook’s Blake Ross is any indication, available they have one less drawing card to profitability. Sure the social media mavens and gurus are heralding this as a great move but there is no proof yet that this idea of API driven businesses are even a viable business model.
The idea that web companies can even make enough money to justify their various valuations by letting developers run rampant is still to be seen. Twitter is probably the most notable in this area as it was really the first one to show real popularity due to its API but even after all this time it still exists because of venture capital – not because it has a serious revenue profit making revenue stream. Now though we have the hottest social network with a valuation of $15 billion deciding that this is the same road that they want to travel.
The other thing that this whole API thing strikes me as being is yet another grasping at straws. Ever since their Beacon advertising project proved to be an abject failure Facebook has seemed to be running from idea to idea, copycat feature to copycat feature. It almost leaves one wondering if Facebook even knows what it wants to be when it grows up. Does it want to be a full featured Twitter or how about yet another Friendfeed?
I just don’t see how this embracing of the API business model is going to do anything to help Facebook. Sure it will make developers happy but given the type of users on Facebook and how they have already been resistant to attempts to Twitterize the social network I don’t really see it having any long lasting positive effect.
The one thing that is becoming apparent though is that Facebook is running out of straws to grasp and when that happens one has to wonder what they will do next.
[picture courtesy of Top Tech News]