For a long time, I was a Facebook skeptic. I was slow to join, and I quit after a few months. I scoffed at the stratospheric valuations attached to a company that hadn’t proven it could make money. “Facebook is worth $20 billion? Give me a break!” I doubted the ability of a callow 20-something CEO to lead a company into the big leagues of business. To me, there were plenty of reasons to believe it was just a passing fancy, sure to be crushed (or acquired) eventually by one of the many well-funded tech behemoths to which it posed a threat.
Well, I’ve spent the past several weeks thinking and reading a lot about Facebook, and I am not a skeptic any longer. And once you read James Cowan’s fascinating story on the company, I don’t think you will be either.
The thing that I never really appreciated (even though smarter people than me have been saying it for a long time) is that Zuckerberg hasn’t merely built a cool networking service. Facebook isn’t just an idle time-waster and an exercise in adolescent narcissism. Despite his modest claims that Facebook is really just about creating a more open and connected world, what Zuckerberg has really created is the deepest and most powerful database of human behaviour ever devised. He knows that, which is why he has rebuffed innumerable multi-billion-dollar takeover offers.
There are literally dozens of industries, from advertising to polling to e-commerce that could be revolutionized by access to the volume and detail of personal information Facebook has piling up in its servers every minute of every day. Why has Zuckerberg been slow to monetize his huge user base? Because he doesn’t need to rush. He has all the capital he needs to keep building the site, attracting users, and introducing new innovations. With every new member, each new status update and friend invitation, Facebook’s database gets deeper and more valuable.
But what about Zuckerberg himself? Is he up to the job of leading this emerging juggernaut into the future? Last week, under questioning on stage at the All Things D conference in California, Zuckerberg dodged questions clumsily, while sweating profusely. He was awful, coming across as uncertain, disingenuous and immature.
For many CEOs, that performance, combined with the horrible beating Facebook has taken over privacy issues in recent weeks, would spell the beginning of the end. But conventional rules don’t seem to apply to Zuckerberg. For example, it has long been a truism of business that if consumers lose trust in your brand, then you’re toast. But Facebook would seem to be the exception. The company has repeatedly enraged its users with unannounced policy and design changes. Poll after poll suggests that members don’t really trust the company and think its handling of personal data is suspect. But that doesn’t seem to have done anything to stop its explosive growth. Facebook now has such a powerful gravitational pull that even those who think the whole thing is kind of creepy feel pressure to join. As I sat here writing, I received yet another invitation from a friend to rejoin the network. People I know who put their names on the telemarketing do-not-call list, and who refuse to type their credit card number online, think nothing of uploading children’s photos, and the precise nature of their personal relationships to their Facebook page.
None of this is to say the company is invulnerable. There are others out there gunning to topple Facebook, just as it surpassed MySpace a few years ago. And maybe Zuckerberg will turn out to be his own worst enemy. But he has a huge head start in a phenomenally important race.
Zuck doesn’t need your friendship. He needs your friend list, and all that goes along with it. And every single day, millions of people hand it over for free. Like him or not, it’s genius.