One of the fastest growing social networks on the planet just took a big leap of faith. Facebook has officially torn down the walled garden, exposing key APIs enabling developers to extend the current Facebook experience.
Although it is not quite baked, Zuckerberg and Company are on the right track. For folks in the widget economy, this is absolutely huge. We now have the ability and permission to leverage one of the biggest audiences on the social web. Clearspring – for example – has been working with Facebook during the ‘F8 Preview’ of this platform to extend our existing Facebook integration and empower our growing development community with improved viral services and increased distribution reach.
Software juggernaut Microsoft managed to become the de facto desktop platform by successfully leveraging the 3rd party development. If the kids from Facebook can pull off a similar coup, they will go from a destination with tens of millions of users, to one with hundreds of millions of users. Think that’s big? You ain’t seen nothing yet. A couple more well-placed chess moves will position Facebook to compete with the GYM (Google, Yahoo, MSFT) crowd.
What is the next big move? A public offering. They are reportedly in the black. Microsoft has reportedly offered them a rather sizable guarantee (hundreds of millions) in exchange for the right to monetize their search. The fact that they are buying up all the property along University Ave (where their HQ is in Palo Alto), is a firm indicator that they have something far more interesting up their sleeves than a fat acquisition. My prediction is that they will file their S1 by mid-next year. With the capital garnered from an IPO, they will be free to acquire services in core areas (search, commerce, etc), continuing their platform push and giving the digital media world yet another new-comer to worry about.
So let’s assume that this happens. Facebook goes public. How will this impact venture investment in the Web 2.0 space? This would be the first real public liquidity event in a space characterized by acquisition-centric exits (Flickr, YouTube, etc). Will this be the proverbial spark to light the real boom? Will this be a catalyst the likes of the Netscape public offering during Web 1.0? Is Facebook the next Google? I don’t really know. But it sure is fun to think about.
Anyway congrats to Dave Morin and team for pulling it off. See you guys on the flip-side.