Friday, May 25, 2007

Facebook in MySpace's Face

SAN FRANCISCO, May 24 — With an ambitious strategy for expansion, Facebook is getting in MySpace’s face.

Noah Berger for The New York Times

Facebook, the Internet’s second-largest social network, was originally popular on college campuses, but over the last year it has opened its dorm-room doors to all, and its membership rolls have exploded at triple-digit growth rates.

Now Facebook, based in Palo Alto, Calif., is inviting thousands of technology companies and programmers to contribute features to its service. They can even make money from the site’s users by doing so, and, at least for now, Facebook will not take a cut.

Some of the new features, demonstrated by software developers at a Facebook event here on Thursday, will allow members to recommend and listen to music, insert Amazon book reviews onto their pages, play games and join charity drives, all without leaving the site.

The result is expected to be a proliferation of new tools and activities for Facebook’s 24 million active users, who have largely been limited to making online connections, sharing photos and planning events.

The move could foster some of the chaotic creativity that is more closely associated with MySpace, its larger competitor. It could also open the door to hazards like spam, and make Facebook’s identity less clear.

But Facebook is thinking big. In the parlance of its 23-year-old chief executive, Mark Zuckerberg, the company is positioning itself as a “social operating system” for the Internet. It wants to sit at the center of its users’ online lives in the same way that Windows dominates their experience on a PC — while improving its own prospects for a lucrative acquisition or an eventual public offering.

“This may be the most important development since the company got started,” said Peter Thiel, a venture capitalist who was an early investor in Facebook and one of its three board members. “But the company is taking a massive gamble. There are lots of things that can go wrong with this.”

Facebook, which is largely supported by advertising, has gained significant momentum over the last year. Since the site opened up to nonstudents eight months ago, its membership has doubled to 24 million, according to the research firm ComScore. Users now spend an average of 14 minutes on the site every time they visit, up from eight minutes last September, according to Hitwise, a traffic measuring service.

MySpace remains nearly three times the size of Facebook, with 67 million active members — up from 48 million a year ago — who spend an average of 30 minutes on the site each time they visit. It has recently focused on entering new markets like Japan and China.

The two social networks have carved out contrasting, though shifting, reputations. MySpace, owned by the News Corporation, has fostered an anarchic aura with few restrictions on creativity, while allowing users to integrate tools from other companies into their pages, like slide show displays. Recently, however, the company has blocked the efforts of several companies to advertise to MySpace users or otherwise make money through those tools.

Facebook, on the other hand, has kept its members in something of a creative straitjacket. Users could not customize their pages or add tools created by other companies.

Those restrictions helped preserve Facebook’s clean, uniform appearance and reinforced its emphasis on offering practical ways to communicate online with friends.

It has also made Facebook appealing to some groups beyond its student base. For example, Facebook is in vogue in Silicon Valley tech circles. David Belden, a 32-year-old technology worker from San Francisco, says he checks Facebook several times a day but hardly touches his MySpace account. “MySpace is so messy and there’s so much spam. It’s not worth it,” he said.

Facebook wants to keep those faithful while turbocharging its growth by harnessing some of the magic of MySpace’s openness. It is also going one step further by allowing companies that contribute features to make money on Facebook through their own advertising or commissions on sales.

“You can build a real advertising business on Facebook,” Mr. Zuckerberg said on Thursday during his speech to more than 700 developers and journalists. “If you don’t want to run ads, you can sell something. We encourage you to do both.”

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