Preston Gralla

Why Facebook's future is not so bright

November 05, 2007 11:31 AM EST
Facebook may be riding high at the moment, with great PR and flush with a $240 million Microsoft investment, but bad times are ahead. The growth of highly targeted social networking sites, and Google's OpenSocial set of social networking APIs will ultimately end Facebook's party.

Facebook is a one-size-fits-all social networking site, and that's why it's become so popular, particularly after it opened itself to the entire world, not just students. But that will be its downfall as well. More targeted social networking sites will eat into its popularity. One example is Ning, which allows anyone to create their own free social networking site, based on their interests.

Even more dangerous for Facebook is OpenSocial. This open API will allow developers to build social networking applications that appear on any site that adheres to the OpenSocial standard. So, for example, you could be at a classified ad site such at craigslist, and you could filter results based on recommendations of people in an affinity group of yours. With OpenSocial, the entire Web can in essence become a social networking site.

Facebook clearly isn't going away, but its sky-high valuation will shrink. It will ultimately become just one more site in a constellation of others, and not necessarily the brightest one.