At its F8 developer’s conference this week, Facebook announced some very extensive changes. Steve Levy’s write-up covers the main details. All over the place, Facebook is moving to secure itself as a platform. Deep integration with application developers: most notably, integration with music services (Spotify and Rhapsody — where are you iTunes?), integration with news media (specifically, the Washington Post that looks set to reinvent itself in the social space) as well as gaming.
But I think, more significantly, Facebook are moving to leverage the installed base — not just of users but of their content. Facebook is set to get memory (that is, intertemporal search). All of that provision of links, contents and activity that you have been providing for immediate gratification will now become investment. Because all of this will be stored and reassembled for a picture of your life. And the longer you have been on Facebook the more valuable that will be. What is more, those assets will grow in value with every minute.
So if massive network effects were not enough, Facebook is going to add standards (an app developer platform) as well as switching costs to its arsenal of strategic strength. And with each of these, it draws consumers away from other entrants into the social space. Will you invest in Google+ if Google only holds your data for 18 months or, worse, may kill the platform if it isn’t highly successful?