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Facebook’s Platform Opportunity

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38 pointsAmorymeltzer10 comments

I have a feeling that technology companies that have as their primary source of income advertising (aka Google & FB) are going to encounter major problems in the next decade for a couple of reasons.

1. The growth period for distribution for digital ads is basically over. We're firmly in the consolidation period and Google and FB have taken the majority of the digital ad market. There's basically no room to grow into, it's just about eating up the boundaries and new entrants.

2. Regulation seems to be coming for user data and these big ad platforms. Google and FB are trying to play the regulatory capture game so they stay in business, but again it's not a growth business - it's playing defense.

It seems like Google is best positioned to actually pivot to selling enterprise/consumers services with GCP and their services offerings. They also have an opportunity in hardware.

Facebook on the other hand seems to only have hardware as it's future, but they are up against Apple and Samsung and Google for that.

While I agree with you view it’s reflective only of the “western” market. I believe they’ll have a combination of cheap services for established markets and grow advertising for developing markets.

Google and Facebook will turn to developing countries with over 100M pop to bolster bottom line the next decade, and for the US, per your first point, continue to acquire more consumer eyeballs and fold them into the parent company (take special note of their recent rebranding) for top line gains.

Facebook aren’t oblivious to these challenges and are investing in new-media experiments (I.e. hardware). It’s important to view these as just other viewports for the social connectivity. Think back to the explosion (and then clamp down) of social FB Canvas gaming on Facebook, they’ll launch v2 of that in an improved fashion with Oculus and pair it with Portal, then push majorly of compute to the cloud - watch out Xbox and PlayStation (probably PS6, not next-gen).

All this to say: Facebook is now a holding company looking to scale across the digital consumer landscape and encourage opt-in data sharing. I think they’ll go through a tough period but aren’t in any immediate danger.

I basically agree with you, disagreeing on just point: I think (and hope!) that VR hardware like Oculus Quest and the accompanying media store might get big. I rarely use FB (mostly for shamelessly plugging new books I write) but the Oculus device pulled me back in a little. Currently, Oculus entertainment like Lucas Arts’ Vader Immortal trilogy is such fine entertainment that it blows me away. Other Oculus activities like watching Netflix and Amazon Prime Video in a VR theater is cool, but the graphics resolution needs to increase for that use case.

I can imagine a future Oculus Quest as being a primary way to interact with the Internet, streaming entertainment, immersive 3D games, etc. I think FB has a lot of headroom for how big this business could get.

Just to be transparent: in the distant past, I worked on VR for Disney and SAIC, and games for Nintendo. So, I am prone to exuberant joy by any good VR experience, so please take my opinions with the large dose of skepticism that they deserve.

> I can imagine a future Oculus Quest as being a primary way to interact with the Internet, streaming entertainment, immersive 3D games, etc. I think FB has a lot of headroom for how big this business could get.

100%. if they get it right.

Facebook as a company was entirely doomed long-term until they bought Oculus (should that have been allowed?). VR is going to explode in the next ten years, and if Facebook plays its cards right it will become a VR platform company instead of an ad company. And that VR will be far more stable than faddish social networking or ad spam. For most people I know Facebook is dead, and Instagram's demise is just one gimmicky app launch away (TikTok++).

I'm gutted about Facebook's purchase of Oculus personally, because (unlike the article) I think Facebook's behaviour has been absolutely reprehensible, including its refused to remove outright, hugely damaging, political propaganda from its platform for the sake of profit. I really don't want a company with that culture owning the VR space. I pray it won't.

Facebook was a platform for several years. And most value came from 3rd parties. Just to mention the wall as we know it today was a 3rd party application.

So what happend to the platform? Facebook canibalized it. Copied better apps. Blocked developers who was too good, bought others. Closed APIs when the ecosystem started to grow.

Collected detailed information about ideas people had for applications.

For me, doing any app integrated with Facebook is something to be considered as 100% risk. Either you fail, or you will be succeed and destroyed.

I will never participate in any "platform" made by Facebook. And i believe a lots of developers who wrote anything using Facebook Platform share the same feeling.

To me, Facebook was just first to the Cannibal party. Apple, Google, Amazon, Netflix and most known platforms does the same thing too by cannibalizing Third-party apps and products (Amazon). Will you never build on these too?

Never, correct. Especially nothing around FB, GOO. Moreover i am moving this year away from all services provided by these companies.

I'm not sure if investing in FAN will make Facebook less of what it is today to avoid regulatory scrutiny. Author argues Google is a platform because of DoubleClick but fails to mention how Google is moving away from that model as fast as it can. See AMP and hotels as examples of Google trying to bring all ads in house. There is also ad fraud that is a huge problem for 3rd party properties which Facebook doesn't have to deal with.

I strongly believe Facebook is missing out on becoming a cloud platform.

I drew up my thoughts with Stratechery-like pictures. https://telegra.ph/Facebook-Social-Services-FbSS-a-missed-op...

My impression is that Facebook's engineers are unlikely to be able to compete with Google's and Amazon's in that space. If so many of them are writing PHP, how does that translate to building cloud infrastructure services, for example?

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