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Is Facebook trying to take over the internet? Implications for startups

Facebook announced some big initiatives at their developers’ conference yesterday and they have big implications for the internet and internet startups.

Facebook has already surpassed 400 million users and is becoming the defacto social networking site for the world.  It’s now the world’s virtual town square where we all get to hang out with our friends.  That makes it a great place to get information and advice from friends.   Facebook has just made it possible for the rest of the internet to gather my friends opinions and feed them back to me.

First let’s step back and think about why social media is important to advertisers and commerce.  In the web 1.0 world, being found when was the top priority.  Search became really important and Google has moved to king of the hill when it comes to internet.  And of course it’s still important.  With the advent of web 2.0 social media sites we saw another way to get access to information: based on reviews or content contributed by other users.  For example, Yelp made it possible to get advice on finding great restaurants.  Those reviews are even more powerful if they come from my friends. Except there was never an efficient way to get all my friends to easily let me know what they like as they ‘travel’ the internet; until now!

Facebook announced a system by which any site can add a “Like” button next to a piece of content.  They also created an object structure to tell Facebook what that piece of content is : i.e. a movie titled X that came out in 2008; or restaurant titled Y located in Washington DC.  They finally created a new structure for their platform called Open Graph Protocol and gave access to developers through an interface that allows then to access and make use of that information very easily.

It’s a big forward-looking idea that can make the internet more useful and relevant.  For a glimpse of what this could be try out Yelp’s new home page and check out the facebook blue bar at the top (make sure you are logged on to facebook on the browser).   Those billions of votes around the internet now create a very attractive advertising platform in facebook, maybe even a better search platform over time!

What’s in it for startups?  I wrote a few weeks back about facebook connect and why it is a no-brainer marketing strategy for many media companies.  This is taking it to a new level and I think startups should really pay attention.  Crafting a smart way to include user voting via the “Like” buttons and using the Open Graph platform to make the experience more useful for existing and, most importantly, new users could help them reap big benefits in lower customer acquisition costs or user churn.

I just hope those European privacy overlords don’t have a seizure; but that’s another story.