Thursday, May 17, 2012

Chris Dixon on the Facebook Business Model

Now that final's season is over - I'm trying to dive back into daily blogging.

Chris Dixon has a great post on Facebook's business IPO that I think complements some points I was making in a previous post (albeit much more clearly):
The key question when trying to value Facebook’s stock is: can they find another business model that generates significantly more revenue per user without hurting the user experience? (And can they do that in an increasingly mobile world where display ads have been even less effective.) 
Here is the link.

Chris is certainly right that Facebook has a lot of resources to use if it's going to alter its business model. When Google+ was first coming out, I remember some people talking about the prospects of inserting a search engine into Facebook (probably using Bing). If Facebook is going to stick with display ads, they should shift their "social lock-in" strategy to include consumer habits - which involves expanding Facebook beyond purely social interactions.

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