“Facebook: $750 Mil in Hand Worth Over $2Bil in Sky”

It came up conversationally, but I think I'm the only person at my company to have firsthand experience as a user of Facebook.com. It was kind of comic to have all these online marketing professionals asking me all about the web-site everybody used in college. Didn't they get the memo? I'm new. I ought to be asking the questions around here. The subject of Facebook.com is an fascinating one that's worth a closer look.

Without query 2005 was the year of MySpace. Before Rupert Murdoch's $580 million social networking venture took the interactive world by storm, it's difficult to think that even the most optimistic of the billionaire's lackeys would have predicted that new acquisition would over quadruple its reach within a matter of months. With 23.5 billion page views by February, MySpace became the second most trafficked site on the Web.

Murdoch's success naturally generated purchasing interest in anything deemed online social networking. One proposed deal in March 2006, was Viacom's unsuccessful $750 million bid for Facebook.com, the phenomenon started by wunderkind Mark Zuckerberg. After Facebook.com declined the offer, its founders pegged Facebook.com's worth at five billion dollars. Perhaps the incredible sparks from MySpace's success has blinded Facebook.com to the flipside reality of Friendster's paradise lost. There's a actual chance Facebook won't see an offer this generous again.

Facebook.com is fundamentally an online medium of communication for college students and high schoolers. For its valued reach Zuckerberg and his crew of Harvard dropouts (taking their cue from Bill Gates, no doubt) must be looking for Google-sized compensation, but the five billion dollar figure is arbitrary and difficult to justify. Perhaps Facebook is emboldened by their own wise decision in not selling to Yahoo for $15 million in 2004.

Zuckerberg was likely trying to establish a market value for his creation, not an unwise move on the face of things. However, Viacom's offer was not by any stretch of the imagination pocket change and the number of entities that can and will double the bid Facebook already got is finite.

Facebook's traffic numbers, as referenced on Alexa.com, in the coursework of the last six months are not encouraging; that is, if the objective is to fish for more and greater buyout bids. The numbers actually have trended downward since March, anathema for enticing hyper bidding growth. These diminishing statistics can be at least partially attributed to the cyclical nature of the school year since Facebook, after all, is geared towards the college student. It doesn't matter how great the product is, it won't keep students from doing their own thing in the coursework of summer holiday and this yearly dip is potentially damaging.

Seeing as how fast online fads can expand and contract in social networking as we've seen in its short time span, what if the numbers don't come back? What if something new pops up in five months that steals Facebook's thunder? (And, again, MySpace's success serves as nice reason why this thunder is worth stealing.)

Facebook.com's success has also been spoilt with some controversy that could taint its popularity with students. At Syracuse University a flap over freedom of expression ensued when a Facebook.com group went overboard in critiquing a student teacher and ended up with expulsions from the class and social suspension before six students transferred. After Penn State's footy team beat Ohio State this year students rushed the field and made a ruckus. Overwhelmed police made only five arrests that day, but later in the week they logged onto Facebook.com and, like Canadian Mounties who always get their man, got lots of names and faces and photographs from the info posted by students about their on-field shenanigans. Children talk and these tales spread like wildfire, which may affect Facebook.com negatively - they can't control misuse of their product and the negative repercussions that come from it.

The future is promising for the social networking business space and I don't think Facebook.com is doomed. Still, given the nature of short-lived and over-hyped dotcoms, Facebook may have reached their growth climax this school year, with possibility for expansion and success only contingent on acquisition. Time may not be on their side because as the pages of the calendar turn there will doubtlessly be new fads and trends that will threaten to make something else the "Next Large Thing" at Facebook.com's expense. The clock is ticking.