Thursday, April 2, 2009

Facebook Redesign is all about $$$!

I have a few thoughts on the new Facebook Redesign.
  1. Although the redesign adds some new functionality and encourages more interaction among members via commenting, it is a step backward in usefulness.  I now find it more difficult to find out what people I care about are doing.
  2. Facebook clearly has Twitter envy.
  3. Facebook looks to be repositioning itself for monetization via the Twitter model.
This 3rd point is the one I want to focus on.  Recent news is that Facebook is facing some cash flow issues unless it finds a new influx of capital or revenues.  Facebook has been around for 5 years now, and it has yet to find it's business model.  It is clear that the business model will be some form of advertising, but how?  Twitter, in its short lifespan, has already positioned itself as a new advertising channel for advertisers.  Although Twitter has not yet implemented its business model, it is fairly evident that it will be in the form of charging advertisers for use of its communication infrastructure.

My guess is Facebook now envies Twitter's position with a clear path to monetization, and to reposition itself in a Twitter fashion.  Evidence:
  1. Facebook's redesign strongly refocuses user attention on the real-time feed and interactions with the feed.
  2. Corporate pages (e.g. fan pages) now take the exact same form as user profiles.  This will enable corporations to act more like people on Facebook--just like how there is no distinction between people and companies on Twitter.
  3. The sudden prominence of stupid quizes.  There is no reason why these quizes have sudden increased in prominence of feeds unless they are an unfortunate side-effect of increased prominence of advertiser communication in the feed.
Facebook is a smart company and knows why its users love Facebook.  I bet they know their UI changes would have this kind of backlash as well.  And I bet they weighed the pros and cons of delaying a path to monetization, and decided in favor of a quicker path to monetization in lieu of consumer desire.

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