Facebook Is the New Internet

First off, I am borrowing a little from Mark Cuban on this, but I have been thinking about Facebook's latest moves and his article sparked my writing. It's an interesting time right now for Facebook as they release new functionality to extend its reach into every web page and service. Soon, everything we do on the net can be easily shared, incorporated into Facebook. Imagine a world where the NYTimes reports which articles your friends are reading and let's you easily spark discussions on the topic, just for you. Music playlists that are easily shared and commented on? What Facebook is doing is adding social connectivity to all our online activity, which is becoming most of our activity. And in doing so, it is plugging into our core existential social needs. Technology, which often is seen as taking us away from a social context, will now be bringing us back in and creating more meaning. And no one else can remotely achieve this. Facebook is the platform (which is also why I disagree with Mark Cuban on Facebook needing a mobile OS, they can just deeply integrate into the contact list because that's who owns our social connectivity. You can't launch a product without that).

And if Facebook defines our social connectivity, who are friends are to us, it inversely defines who we are to our friends. Why should I only be tagged on Facebook in photos or notes? What if this blog is tagged (besides me posting it to my activity feed) or a research article I write or a mention of me in huge story in the NY Times (see you this summer)? Check out Taggable, which does exactly that. Now the whole electronic universe can be captured on my Facebook profile and the work crowdsourced by friends. One day, it might be automated based on context and matching algorithms (this Trevor Sumner instead of this one).

Facebook encompasses so much. It's how we find out what's going on, what our friends are reading and recommending. As Mark Cuban points out, how often do you use Google anymore to find reading material ... If every service becomes social, is there a difference between the social web and the web itself?

Next up: Facebook is the new App Store.

Facebook Takes Over My iPhone

Not surprisingly, Facebook has taken over my iPhone. Not the apps, but the phone itself, and it's about time. Facebook is where we are social. It's where our friends are. It's a contact list that updates itself. It fills out profile information with substantive info. So as the dynamic system of record of my social contacts, why hasn't it merged with my traditional contact list before?

Well, not all my contacts are on Facebook, so the approach they took is simple, just Facebook enhance the contacts they recognize. Now Facebook is in my iPhone contact list and can add all that data when I pull up their contact info. I now know not to suggest steak for dinner because I see from your status you had a ribeye at lunch. Combine that with FourSquare data and I might know roughly where you are. Give me Google Lattitude Access and I will know exactly where you are.

The point is that there are so many services that provide info about your friends and what they have done. Facebook is the defacto standard. By extending their reach into my contact list, they strengthen that position and make it easier for all of the smaller apps to get to the contact list, just integrate into Facebook you see.

It's a major move that hasn't received enough attention in my humble opinion. Now of course, Facebook is abusing this permission and sending me a constant stream of notifications that I am going to turn off. But they just staked out some significant territory and I am better for it (barring some serious privacy concerns, of course).

The Crumbling Internet

The reporting hasn't been widespread, but I think the Internet is crumbling under it's own weight. Two massively popular services, Facebook and YouTube seem to be buckling. On YouTube, videos regularly get caught in a buffering state or don't start at all and the page needs to be refreshed. On Facebook, CDN loading times are lagging ("waiting for fbcdn.net ...") and more than occasionally I get the network transport error. And yes, I see it on other people's machines on multiple types of networks. It's just unreliable. Not unworkable. Just nagging enough.

Now interestingly enough both of these services have recently, and surprisingly, reported that they are near or at profitability well ahead of schedule. While many have talked about the surprising success of Facebook ads, especially the ad budgets of games like Farmville, I think it is more than coincidence that these performance issues are happening now.

The funniest commercial I have seen on TV lately has been the Verizon Wireless commercial "there's a map for that." Poking fun at AT&T's network is a little too easy. But it's too easy to take your natural lead in a market and cut costs to maximize profitability. You still have your features. Your bells and whistles. Your network value (Metcalfs Law). Your brand equity. But you have undercut your users for the sake of cost.

Would cell phone carriers have taken off if they were this spotty to begin with? Would Facebook be as popular if it were regularly frustrating? There's a natural cycle to businesses where you spend less time innovating and more time profiting from the existing market position. This tends to happen in a waning market, where long term iterative innovation just won't have an effective ROI. Disruptive innovation and creative destruction then rules, and new ventures open up new markets.

But it's way too early. This market has just begun. Premium video is being flanked by Hulu and other popular and accepted premium VOD services. It's easier than ever to discover content with video search engines. Netflix is poised to supplant cable. Now is not the time to alienate users.

And Facebook. You've got analysts saying that the future of digital advertising is about leveraging social network data to provide more effective ads. Facebook is now the leading photo sharing site on the Internet. And it's the biggest video game platform. It's the largest event planning site. But you have threats from Open Social, micro communities like Ning and yes, Weplay.

And so I find myself using Facebook a little less. Maybe it is become I am busy, but also because it is slow and clunky. And I am reading ACLU reports on how Facebook apps give away your friends info without their permission. And I am thinking to myself, is a backlash really possible? Is something that is so much a staple to many, really so vulnerable? Well, I have had a couple friends leave Facebook in the last week. Maybe it's too early to milk the business. Maybe the cookie is crumbling.