Today Facebook is going to formally announce its plans to become an open platform. We know that the platform will allow companies to offer their products and services to Facebook users, but the details haven’t yet been ‘exposed’. So all of us bloggers are waiting for the news to be announced today, on the edges of our seats. In the meantime, I wanted to remind you of Alex Iskold’s article this week about Facebook – which I thought was intriguing. Alex posited that Facebook is ultimately aiming for an IPO, which would make it the first big Web company to go the IPO route for a long time. Web 2.0 has turned out to be more about M&A (mergers and acquisitions) than IPO (Initial Public Offering), but of course IPOs were all the rage in the Dot Com era.
Alex wrote that Facebook needs to find a way to earn money from widgets on their site. What’s intriguing here is that Facebook could eventually eat Yahoo’s lunch with such an open platform strategy. As Alex put it:
“If Facebook could figure out how to do this [earn money from widgets] in a way that makes the retailers happy and keeps the users from screaming, then this is a huge win for them. Consider a scenario where Amazon rolls out something as simple as books and Facebook gets a cut of each transaction. That could happen in many verticals, from books and movies to electronics and travel. And as Facebook is growing beyond the college population, and as its current college population graduates, there seems to be potential for a big upset brewing here – in the sense that Facebook could significantly eat into Yahoo’s business.”
While we’re waiting for the Facebook news to be announced, what are your thoughts on where Facebook is headed with their platform?
Update: the news is out now, see Techcrunch coverage. R/WW will provide our analysis later today, once the dust settles.
