Facebook in two years

Facebook is most popular social network today with more than 400 mil. users. Oddly enough, nobody can really determine what was Facebook’s competitive advantage over social networks like Orkut, My Spaces, … that gave Facebook such a head start over them. I believe that it was from a great part luck and from the other part ease of use that Facebook gained critical mass of users quickly enough to became number one in the world (Although, in some countries like Brazil or Russia, social networks like Orkut and Odnoklasniky dominate the market).

Facebook, as a private company, does not publish its financial data. Therefore, all numbers about revenues, which are on internet blogs are just rumors or estimates. According to blog InsideFacebook, Facebook reached up to $700 mil. revenues in 2009, most of which came from advertisement.

In its early days, Facebook used to be a place to connect with your friends and find new friends. Today, it is a major place for searching and consuming multimedia entertainment recommended by your friends. At times, Facebook even surpasses Google in internet traffic. However, how will Facebook look like in two years?

Firstly, I believe that Facebook is here to stay at least for another five years unless there will be a huge problem with security or performance and at the same time, users could easily switch to available alternative. Secondly, importance of social games at Facebook platform and sale of virtual goods will grow both in usage and revenue. Thirdly, Facebook might extend use of its virtual currency at the expense of PayPal and credit card payments, which could create another stream of revenue (approx 1.5% of value of each transaction ). Last but not least , there will be more emphasis on privacy of personal information, where Facebook will have to prove itself as a reliable and trustworthy partner.

Marketers are ready to put even more money in executing their campaigns on Facebook, now it depends if Facebook stands the challenge.