Facebook’s internet.org project is all about scooping up future users before they get a taste for Google, according to this author. Those future users are predominantly in those parts of the world which suffer from poor internet access. So the ZuckerBorg will connect them – but only through the matrix of Facebook and those “services” deemed friendly to FB share price obviously.
It’s an interesting read and like one of the comments below, seems quite commonsense and obvious. Infact, it seems to be a kind of physical representation of Facebook and other social platforms ethos:that the “free” platform isn’t really free, value is extracted in other ways. The stink emanates from the humanitarian/not-for-profit marketing angle. Though this will change. Facebook’s strength comes from its ability to weather the tirade and morph into more consumer friendly (or atleast digestable) forms.
Facebook has about the same number of users as Google: about 1.4 billion. That’s one out of five people on earth. And the social network made US$12.4 billion off them last year – that’s about US$ 8.65 per person on their service. While Google made $66 billion off about the same number of people – almost $46 per head – a revenue efficiency more than 5 times that of Facebook. And that gap isn’t narrowing nearly fast enough.
Revenue growth to support Facebook’s stratospheric stock price at 60 times earnings is a big challenge, I’d imagine. Oh, and even at 5 times the revenue efficiency, Google’s Price-to-Earnings (P/E) ratio is less than half of Facebook’s – so the pressure on the Facebook stock price can only increase with time.
There’s only so much you can squeeze out of the first world – the current billion or so people – even though Facebook has cut virality, decreased organic reach and tried every which way of getting someone, anyone to pay more for visibility on its once-open social network. A more desperate measure was probably needed.
Image: Maurizio Pesce