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September 27, 2006

The Real Reason FaceBook Opened Up : Yahoo! Inc

posted by MR WAVETHEORY at 9/27/2006 02:46:00 AM
The real reason FaceBook opened up was to boost its traffic in anticipation of a deal with Yahoo! Inc. FaceBook has signed a no shop agreement with Yahoo! Inc which means it is in exclusive negotiations with Yahoo! Inc. Of course, no shop agreements have expiration dates. You can just bet that FaceBook, aka Mark Zuckerburg, wants to keep the Yahooligans hot and heavy while the corporate development is pouring over the traffic numbers from FaceBook.

What I think opening up also means is that FaceBook has played the end game move. You can only open up the site once and get a big boost of traffic. FaceBook knows that Yahoo is looking to buy something cool, yet if FaceBook isn't acquired by Yahoo! soon, then it will be the last of FaceBook. My bet is that FaceBook will turn out just like Friendster if it stood alone without Yahoo! So, here you have two juggernauts each trying to get the best of each other - classic deal makers.

It's not easy being a Web 2.0 company. All you have to do is look at the MediaMetrix numbers which show that MySpace video has overtaken YouTube as the most trafficked destination for videos after a few short months. The thing about hypergrowth is leaders rarely stay leaders for long.

Property Streams initiated (mm)Unique streamers (000)Streams per streamer
Total Internet7,182106,53467.4
MySpace 1,45937,42239
Yahoo sites81237,93421.4
YouTube 64930,53821.2
Time Warner Network25825,67510.1
ROO Group186 5,84131.9
Microsoft sites15616,2279.6
Viacom Digital32214,077 22.9
Google sites607,5207.9

Good luck!

Update: FaceBook is suing copycat FaceBen - which is now renamed FaceRen. FaceBen nka FaceRen is a Chinese FaceBook.

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