A couple of months back, Facebook shook the world with their billion dollar Instagram acquisition, days before going public. As if that didn’t cause enough furore, Facebook’s stocks tanked soon after going public, inviting sharp criticisms from all ends. It sounds too much like the .com bubble of the late ’90’s, the last time the early world of web apps messed up our economy.
Some people even started predicting doom and the end of the world as we know it. Okay, I made that up. But I can’t quite make peace with the fact that Instagram, a company which had only been around for a year and a half now, and made zero profit, is worth a billion dollars.
Outrageous, one might say! But knowing Zuckerberg’s working style and Facebook’s history, I believe there must be some reason behind this seemingly irrational move. In this article, we’ll try to understand how product valuation works, what is an economic bubble, and more importantly, why Instagram.
Given the recent rise in popularity of social networks such as Facebook and Twitter, with quick, short messages between users like those popularized by SMS messages, some believe that e-mail may be dying out. After all, it’s so much easier to type in a person’s name, write out whatever it is off your chest and hit “Send”. You don’t have to worry if the email address is correct or up-to-date, and you can be pretty much guaranteed that they will have seen it, even if you don’t get a reply straight away.
It’s pretty surprising to say, but even today, 12% of the American and 39% of the European population still don’t have access to the Internet, according to the latest penetration figures for 2011. As those users, and the kids growing up today, come online, it would seem that they’ll adopt to using social networks by default, skipping email entirely and hastening its demise. But I believe that e-mail certainly isn’t dying out – in fact it’s more popular than ever.
As Facebook Timeline slowly rolls out to the scores of people on the world’s largest social network, there seems to be a lot of resistance. It is the same song and dance as always: Facebook makes a change, people complain en mass about that change, and then they get used to it and no longer care. I’d be surprised if Facebook’s constant evolution has cost them even 1% of their 900 million active users.
However, things do seem a bit different this time around. Our very own Oliver de Looze recently published a nice oped piece titled, Facebook Timeline- Friend or Foe?, where he voices his concerns about the new layout, primarily Privacy. After reviewing the new Facebook Timeline back in October, and then using it since then, I’ve got a different perspective on it.
It cannot be denied that Facebook is now a large part of most people’s lives. For many of us, its use involves catching up with friends, organising events and sharing our experiences of the world around us. With over 900 million members, there is no doubt that Facebook is the de facto social network on the planet, the time of Myspace has definitely passed and more and more people are now migrating to Facebook from other social networks that were perhaps more popular in local areas (Bebo in the UK, for example).
For a product with so many users, Facebook seems to be incredibly quick to change its designs and layout. Is this actually a good thing for users, and can they possible keep changing without facing a sharp user backlash?