Facebook is moving into the corporate world with a limited beta of 10 companies. Facebook revenues are estimated at $1M per week, or about $50M. MySpace is believed to be in the $200M range for this year. InsideFacebook believes the 10 companies in the beta are: Accenture, Amazon, Apple, EA, Gap, Intel, Intuit, Microsoft, Pepsi, PWC and Teach for America.
Facebook is falling way behind MySpace in terms of members, page views and revenues. Take a look at this chart from Alexa comparing Facebook page views to MySpace. MySpace has about 10X the traffic of Facebook. Rumors have MySpace revenues at $200M versus $50M for Facebook.
NewsCorp paid $580M for MySpace about a year ago. Facebook recently raised another $25M in VC money at a valuation rumored to be around $750M. Wallop was recently spun out of Microsoft, and will probably compete in this space.
Microsoft is included in the beta, presumably because so many existing Facebook users now work at Microsoft. I signed up for a Facebook account and was surprised to see how many Microsoft people were already members. There is no accurate way to count, Facebook search is very crude, but my guess is several hundred, maybe a lot more.
Facebook is still very much a college focused site. The personal profile includes choices like; Single, In a relationship, In an open relationship, Married, Its complicated. It also has a category called Looking For: that includes choices like; Dating, Relationship, Random play, Whatever I can get.
A typical Facebook profile will include a list of "Friends" with pictures, your personal profile information, your interests in; Music, Books, Movies, Television, Quotes, etc. Friends include people in your own network (school) and friends from networks sorted by school.
Facebook will need to change significantly to attract the corporate world. LinkedIn is actually a useful corporate networking tool. Facebook has a long way to go. Or, perhaps Facebook has no intention of being useful to the corporate crowd. Maybe they just want to follow their existing members from college into the work world as a way for them to maintain friendships.
There are concerns about corporate types having access to all these college kids profiles. It will be interesting to see how existing Facebook users react. My guess is there will not be much of a problem. There are only 10 companies involved in the beta, and the vast majority of these users are recent college grads with existing Facebook accounts.
My guess is that Facebook will not catch on with the corporate crowd. But, existing Facebook users will continue to use their accounts when they join the work force, and add their companies to their profiles. Young people change jobs often and these social networks can help them find their next opportunity. LinkedIn is way ahead in terms of useful features for people interested in corporate networking.
Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column.
I'll bet the human resource teams will want to scrub Facebook before they expand to other corporations...
The last thing I want to know about my boss is that his relationship is "COMPLICATED" and that he's looking for "RANDOM PLAY!"
Posted by: Paul (from Idea Sandbox) | April 27, 2006 at 07:58 PM
This new addition by facebook is rather interesting. However, I am not sure how the corporate world will embrace this, especially since LinkedIn already exists.
Yet, this might be a way for the Myspace generation to transition from the college life to corporate.
What do you think?
Posted by: Christopher Salazar | April 27, 2006 at 09:55 PM
This is a logical move for Facebook to be making. They were doing some recruiting at my university and as I recall they have a 15 man engineering team as well as the world's largest SQL Farm (so they claim). Although these guys are seriously grassroots, they do have longer-term meglomaniac motives.
Right now, I have about 500+ "friends" on my Facebook. What is great about this is I can easily get an idea of what my friends are doing and how to get in touch with them. I no longer have to worry about keeping track of a huge rolodex and keeping it up to date.
As this rolodex grows, it will be an invaluable repository for a college grad. What do you think its worth to an alumni to have instant, up-to-date access to information on their friends/contacts after they have left college? $30/year? $50?
I don't know what the exact number is but there are definately many great revenue opportunities that can leveraged from this "installed base."
This is a smart move for Facebook because it gives them a leg up on LinkedIn. It makes it easy for a Facebook user to transition from high-school to college to the real world without having to re-establish their network on another site. Think about what WSJ does at business schools...they give the paper away for free so that students will be used to reading it every morning and then purchase a subscription when they are in the real world.
At the end of the day this comes down to execution. In order for Facebook to be useful in the corporate world they will need to have a marketing approach that targets the corporate crowd differently than the high-school/college crowd. If they remain as they are right now, I think you are right Don. However, if they offer useful features like what LinkedIn offers, they will be a logical next step for those moving on after college.
Posted by: Steve | April 27, 2006 at 10:22 PM
What?? LinkedIn is useful?
LinkedIn is not Facebook. LinkedIn is not Myspace. It doesn't compare, it isn't useful, and if you think otherwise, you're kidding yourself.
=) but otherwise, you've got a nice article on something that hasn't even been announced by Facebook itself.
Posted by: Daniel Nicolas | April 28, 2006 at 10:40 AM
I'd be surprised if Facebook attempted to replicate the functionality of a LinkedIn. Facebook users embrace the service in functionally different ways - and there's a large number of college students and recent graduates who get the fact that the Fbook is a place to hang around, to connect, to explore each other. Once you throw a definite purpose into the mix, once the users are oriented around a goal, the sense of fun and freedom are lost.
Facebook's in a great place, as that they can sit back and observe, and then make the steps that are appropriate in the corporate market. They can learn from their users, rather than forcing a model down from the top. The corporate market is functionally different from college, but there are a lot of information needs Fbook can step in and address. As long as Fbook is addressing an information need in context, it will succeed.
I'd disagree with the previous commenter who thinks Fbook will build revenue streams out of making you pay for contact data. What would the Facebook have to gain from that- just Google (or Myspace, or whatever) your potential contact. Plus, it breaks the key functionality of the site - the Facebook is built on the notion of connection. How the revenue streams will work out is still somewhat of a mystery, but I think the Fbook guys are smart enough to know not to break the core model of their site for a buck. Taking data hostage or making you pay for contacts breaks with everything we experience in the service, and it just sort of sucks. Value will be created in ways that fosters site use, rather than limits it - I think there are interesting times ahead in the SNS space.
Posted by: Fred | May 07, 2006 at 05:32 PM
don't forget that ceo of linkedin reid hoffman is an investor in facebook
Posted by: read this | May 26, 2006 at 12:20 AM