Flush with cash, allied with Microsoft, growing exponentially, and positively humming with buzz, Facebook is definitely the "it" site on the Internet. Now what?
At the annual Foursquare Conference today, Facebook founder Mark Zuckerberg gave some hints about the future of the social networking phenomenon. He described its new advertising initiative, spoke of its relationship with Microsoft, and alluded to its budding rivalry with Google.
First, financing. C.F.O. Gideon Yu told Portfolio.com today that the company is preparing to raise an additional $260 million to close its Series D financing round.
During a question and answer session, Zuckerberg described the company's new advertising initiative, which he announced yesterday.
Among other things, it will allow businesses to set up their own Facebook pages and then reach out to real, live users -- that is, potential customers -- based on the interests they have described in their profiles.
If those interests include not seeing advertising, that is too bad. "There is no opting out of advertising," Zuckerberg said.
If it is any consolation, he added: "The ads are going to feel like content to a lot of people."
He also alluded to a budding rivalry with Google. Asked why Facebook chose not to participate in Google's new social networking consortium Open Social, Zuckerberg replied, "Who says we didn't choose to be a part of it?"
In fact, he added, "We didn't really find out about it until an hour after it launched."
Zuckerberg said it is "conceivable" that Facebook could seek to join Open Social in the future, but the company has no such plans at present.
"If it does really well, we may want to participate in it," he said.
At one point, Google co-founder Sergey Brin emerged from a side room at the conference, which was held at the Pierre Hotel in Manhattan, and headed straight for Zuckerberg. Bystanders held their breath, waiting for some kind of showdown.
But like a couple of championship boxers at a pre-fight weigh-in, they didn't so much as acknowledge one another. Brin just smiled as he walked straight past Zuckerberg, who kept his gaze straight ahead.
Describing Facebook's $240 million partnership with Microsoft, which includes an advertising component, the famously terse, frequently monosyllabic Zuckerberg said, "Microsoft does a lot of things that just make sense for us."
He said Facebook chose Microsoft as its advertising partner instead of Google, which has been much more successful at online advertising, for a simple reason:
"Not having done something before -- we don't see that as a disadvantage," he said, prompting laughter from the assembled media moguls.
Indeed, the lack of a track record has not hampered Facebook. Zuckerberg said the web site currently has 52 million active users, and is growing at 3 percent per week -- essentially doubling in size every six months. At that rate, he said, Facebook could have 200 million users by the end of 2008.
Facebook's "social ads" so far appear to be a flop. Not only was the "once in a hundred years" announcement largely a yawn, the complaints of Facebook users and MoveOn about the primal annoying-ness of "Beacon" are right on the money. Although we can't imagine why MoveOn can't find something better to do than complain about Facebook, we do note the speed with which 1) Facebook responded to MoveOn's complaint, and 2) 2,000 Facebook users signed up to support MoveOn. And we don't blame them. We already hate the idea of bombarding friends with lists of the crap we buy.
The fact that Facebook will only let us opt-out of that bombardment on a case-by-case basis (at the virtual cash register at third-party sites) is infuriating.Facebook should immediately make Beacon 100% opt-in. Not because MoveOn is complaining--because the current system will drive users right out the door.
The tiny minority of Facebookers who want to bombard friends with lists of the crap they buy--and friends who are actually interested in hearing about this--can elect to do so. The vast majority who don't should never have to hear about this ridiculous concept again. (And if this embarrassing backtrack hurts Facebook's ability to raise more money at a $15 billion valuation, so be it: This is the right thing to do for the long-term health of the company, and the fund-raising effort seems to be in trouble anyway).