Facebook poised to become the next Google

By Sol Tran

If we rewind back to the end of 2007, MySpace was dominating the Web with well over 100 million active users, while Facebook barely crept over 10 million.

Those days are gone. Finished. Kaput. With a cleaner interface, more global outreach and more talented executives, Facebook has proven that it is the more powerful force.

Facebook has now grown to over 200 million active users, with over 100 million people logging in every day.

There's a big elephant in the room and a scary proposition, however, that likely plagues the mind of Mark Zuckerberg, Facebook's 24-year-old CEO: the possibility of Facebook being overtaken in the same way it surpassed MySpace.

But Zuckerberg seems to have a sound strategy to avoid that dreadful scenario: dominate the Web with no limits on any demographic -- except little kids.

Nick Kurns, program manager of Santa Clara's Center of Innovation and Entrepreneurship and a close follower of Facebook, attributes Facebook's strong growth to their leave-no-demographic-behind strategy.

"People look to Facebook hoping that they will be the darling of the recession with good reason -- they are the clear leader in social networking," said Kurns. "They've effectively opened new markets by introducing new demographics to social networking, and their growth rate has been very impressive."

A big reason for Facebook's growth has been its introduction to new demographics. It took four years for the Internet to reach 50 million users. Facebook just added 50 million new active users since the beginning of this year. The reason: Translated in over 40 languages, over 70 percent of Facebook users are from outside of the United States. Although social networking is thought to be targeted toward the young demographic, the fastest growing Facebook demographic is actually the 35 and older group.

In addition, with the launch of their new service, Facebook Connect, Facebook has great potential to really disseminate itself throughout the Internet, one Web site at a time.

The service allows users to bring their Facebook identity with them to other sites, such as Yelp.com or SCULife.com, and share information from those sites with their Facebook friends.

Senior Conrad Egusa, founder of SCULife.com, explains it succinctly: "Facebook is transforming the Web. People who want to create an account at SCULife.com don't have to create a new login, they just click 'connect' and they automatically log into our site with their Facebook account," he said. "Imagine posting your textbook on our Textbook Swap page and having that show up on your Facebook News Feed. Facebook Connect is really interconnecting the Web."

By ingraining Facebook into every aspect of our lives on the Internet, Facebook is poised to become the next Silicon Valley behemoth and could very well become a big competitor with Google.

It might already be happening. Both Facebook and Google have talked about acquiring the media darling that is Twitter.

Facebook also has the talent to compete with Google. By luring former executives from Amazon, EBay, Google, Mozilla and AOL, Facebook has developed a breadth of expertise that allows them to tower over the Web.

Many skeptics out there think Facebook is just a fad. "You never know, some genius person from Harvard could come up with an idea (to topple Facebook)," said junior Kanani Sk.

Just one thing: Zuckerberg happens to be a genius person from Harvard.

Yet there is one big question mark with Facebook: While Google has been making billions of dollars, Facebook has yet to cash in financially from all their traffic.

They have run through two or three CFOs now with no success. They are actually seeking additional funds, having burned through $200 million. Internally, they only value their company at $3.7 billion, far less than the $15 billion figure that has been thrown around.

"They seem to be grasping at straws, looking for anything that hints at a business model," said Kurns. "With the lousy capital markets and the lack of a revenue model, Facebook will be tested within the year. But taking a longer view, Facebook is an extraordinarily promising company. I think they will continue to lead among social networkings í-- a hugely important industry -- that they will survive downturn and emerge as a Silicon Valley mainstay."

Facebook might not be cashing in yet, but by spending the money now to lay down the infrastructure, when 2011 rolls along, there is a strong chance that Facebook will be the new Google.

Contact Sol Tran at vtrankiem@scu.edu.