Friday, July 8, 2011

Why Facebook May Really Be Worth $100Bn

I wrote my last post about how Facebook was a bubble, so now I am going to eat my words and explain why I think Facebook might be worth its price after all.  

I have long been a FB-apostate when it came to seeing the platform’s monetization potential: big, yes, but $100Bn big?  Now however I’m starting to see the light.  And it's not because of advertising.

I believe that Facebook has won the online identity war, and the spoils will be enormous.

Companies like MSFT and GOOG have forever been trying to create a single identity for users to use across the web, from MSN Passport cum Windows Live, to the simply titled Google Account (or is it Google Profile?) cum Google+.  Other, parallel efforts have focused on being a one-stop destination for all things online, from the Yahoo! Portal to iGoogle. But FB has actually done it, and not as a bolt-on afterthought but as their core competency (granted the portal was Yahoo's core competency, they just weren't very competent at it).  Because identity is a natural monopoly, this makes FB’s dominance of this space difficult to challenge.