On the eve of the Facebook (NASDAQ:FB) IPO, I felt compelled as a technologist to share an important observation about the company and its products:
The value of Facebook rests in identity, communication, sharing, and recording/making relationships between data about people, places, events and things.
Facebook has done what no other organization in the entire world has managed to do, and that is to catalog the identity (usually at least a name, photograph, maybe a hometown) of 800 million people.
Even such projects as OpenID, explicitly designed to try solve the problem of giving you one unique identifier to use at websites around the world, have never taken hold to the extent that Facebook has.
Using the simplest search tools, and the relationships you have with your contacts/friends (and the power of 6 degrees of separation), there is a very likely chance that you can locate and identify nearly any person you know, who is on Facebook, and that they can locate you.
When you step back, this is a problem that information technology/systems companies have been trying to solve for years. It is a problem that tons of organizations (including governments) have spent billions of dollars trying to solve. And it is a problem solved by the book of "faces"... Facebook.
With a fairly accurate "identity" to represent 800 million people, suddenly, data analysis of those people becomes a lot easier. We are all just nodes on the network. Think about it - driver's license number, social security number (SSN), government ID number, etc. - these are all unique identifiers that are often a contract between you and a government. Some are private and not meant to be shared.
They are all made somewhat extraneous if one can verify identity using Facebook.
Your Facebook page is a public way of identifying yourself, to a large number of people and organizations. This is the reason for the advice - watch what you say on Facebook, you never know who will see it and how long it will be around for!
The IPO is set to price around $38 a share and raise approximately $16 billion dollars at that price.
Think about what $16 billion can do in making your life better through ancillary services that surround Facebook, but making use of this core identity feature.
Add to it, the fact that every website you see these days, every news article, everything on the web, has a giant "LIKE" button next to it. Everything is personalized to suit what these systems think your tastes are (also known as a "filter bubble"). What about all the other actions that could be tracked?
The like button is an action. It is a communication tool, it is a sharing tool. By clicking it, content from around the world gets tagged and stored in Facebook's giant "open graph" database.
I... like... something (already exists) or someone.
I... am in a relationship with... someone (already exists).
I... bought.. something.
I... talk to... someone.
I... went.... somewhere (think "Check-ins").
I... ate...... something.
I... made... something.
I... work... somewhere (job info).
I... have... something.
I... saw... something (why did they buy Instagram?).
Heck, with base assertions like these, predictive analytics about what I will do next, what I want, what I might buy - these are things that are eerily powerful. If you fed all this into artificial intelligence tools, you'd probably be able to build a little model of my psyche (or at least, as much of it as Facebook knew).
If you are familiar with the popular game The Sims made by Will Wright you know how much data about mood, physical status, etc. the game tracks about your characters. Imagine a Sims character generated from all this data that Facebook has collected about you - I wonder what that would look like!
If Facebook gets this right, $16 billion or more will help them turn open graph into the world's largest centralized repository of data about human activity of many different types that has ever existed, outside of perhaps technologies used by governments through intelligence gathering organizations.
Yes, there are privacy concerns. Yes, the government wants to get at this data.
But there is more. Just because the open graph database exists, does not mean that everything needs to exist within it.
Instead, Facebook could work with partner companies to build private, closed databases, where you are identified by your Facebook ID, but the Facebook application itself has NO access to the data inside these repositories.
Facebook wants to get into business organizations. They are going to use much of this IPO money to try (or so I believe).
Facebook wants to be an integral part of your life, just "like a good neighbor, State Farm is there". That's right, one of the most highly coveted marketing/advertising techniques companies love to use with people is - "we're with you from birth to death, at every step of the way". Watch carefully and see how many television commercials use this technique for things as big as oil companies to General Electric. Remember the timeline? From birth to death? Sound familiar?
Lately, there has been much discussion about electronic health records, and centralized healthcare systems, and health information exchange in the United States.
Do you think such data should be on Facebook? How about your banking data? How about any private data at all?
Of course not! But, that's the thing people don't realize - the data doesn't HAVE to live inside of Facebook. The data can be stored securely away, anywhere else, but access and identification of who you are could be done through Facebook.
Facebook is a platform to build on. I believe this is what they will push the company forward with. Use Facebook as a platform to build around.
Look at their recent announcement of the "App Center/Store". Look at the tools that Facebook offers for building applications that live inside of Facebook?
There is value here! It's crazy, scary and powerful.
Or is there value? And is it crazy, scary, powerful?
One thing is for sure - they didn't get to where they are without having succeeding at implementing many major innovations and new ideas, and I would wager a guess that they will continue pushing hard and growing out however they can.