Thank You, Facebook!

We can’t really move forward without talking about the elephant in the room. When you say "social media" to someone who isn’t super techie, he’s likely to say, "What’s that? Oh, you mean Facebook?" And I’m here to tell you the answer to that question is yes. Social media is Facebook. Before I came out here, I didn’t really know why Facebook was such a big deal. It had more than 500 million users, which I know is a ton. And I knew that this spring, according to one of the companies that track Internet activity, FB surpassed Google as the most trafficked Web site in the world, the only time anyone displaced Google in three years—and it’s been number one ever since. But I didn’t really understand how it was any different from MySpace or Friendster—or a lot of other companies that didn’t end up being as powerful or worth as much as everyone thought. And I can tell you now that, according to basically everyone who has more than ten bucks to invest in Silicon Valley, it’s different. That it has, as they say, won. Bear with me if you know this stuff already.

First of all, Facebook made identities on the Internet real. People have been pouring embarrassing information onto the Internet for decades now, but no one knew, because there was no Facebook. Facebook has become, in Silicon Valley received-wisdom shorthand, the White Pages of the Internet. It’s where everyone is. If you’re looking for an actual person from the real world, the first place to look now is FB. And most people who know what they’re talking about don’t think that’s going to change, because 500 million users have, together, a lot of gravity. It’s hard to move them all at once. Would it be fun to join another social network if you couldn’t find people on it? (Though I also think, as an outsider, that the one thing the Internet has taught us lately is that nothing has gravity.)

Okay. So first it owns your identity. Then it owns your connections. Your friendships. If someone has an interesting bit of information (I got divorced! I had a baby! Look at my pictures from Mexico!), FB knows exactly who might be interested in that bit of information. It is the only place with the channels already up and programmed to distribute it. And you’re more likely to pay attention to information delivered through FB’s channels because it’s coming from people you presumably know and trust and might even like. FB has built the infrastructure of the social layer. Anyone who wants to use it has to use FB’s skeleton. Which is fine with FB. One of the smartest things FB ever did was make its connections available for any other party to use. You want to sign in almost anywhere? Just use FB Connect. Why compete with FB when it’s expensive to compete with FB, and you’re going to lose, and it lets you use its network for free? A by-product of that is that FB knows a lot about you. Like, more than you tell it. Rahul says it’s not long until it knows when you get married or when you die, even if no one directly lets it know. One of the founders of a YC company called 1000Memories.com (it’s FB for dead people, only more interesting) says he heard FB can already tell when you’re about to break up with someone: certain communication patterns emerge.

One of the guys I talked to about why FB is so powerful is Angus Davis, CEO of a company called Swipely, one of the services for "sharing" information about all your credit card purchases with your friends. If you buy new sneakers at Niketown or a Protein Berry Razzmatazz at Jamba Juice, as long as you use a credit card Swipely has access to, it will appear in your feed. It is one of those Internet businesses so far out on the periphery of social sharing that even people who adopt nearly everything are a little scared to use it. But the endgame for these businesses is different from what it seems.