The two step in “give away” economics is well known. Step 1: Give it away to build a large installed base; Step 2: Turn on the switch and start charging. Which leads me to ask: What does Facebook think it is doing? They seem to have step 1 perfected. As you will see below, their traffic statistics are staggering.
That conclusion is prompted by an observation made on the blog, LostRemote, which tracks new media issues. They picked up on these two facts.
First, Facebook has surpassed Yahoo as the second most popular destination on the Internet. Look at the following graph to see this trend. In the last month Facebook passed up Yahoo, second only to Gooogle.
BTW, this graph comes to us from compete.com, who has a nifty little web-analytic tool on its web page. It allows one to compare any site to any site.
For example, just for fun I compared the traffic at Wikipedia, Ask.com, and YouTube.com. Here is what I got. Cool, isn’t it? According to this, Ask.com is not doing too bad, and YouTube still blows away Wikipedia, at least in terms of unique visitors.
But I digress. Back to Facebook.
Facebook has one other interesting feature. Its visitors spend a lot of time there. According to LostRemote, the fraction of time on Facebook continues to increase. See this graph.
This statistic seems so staggering it seems implausible. If it accurately reflects user orientation towards Facebook, then that site is sitting on a dominant Web hub of information.
Which leads to my last question: Where is step 2? When is Facebook going to turn on its switch and start charging?
Something to think about the next time you log on to Facebook and share with your friends…. Just how does the management expect to make money from so many users who spend so much time on line? And will users like it as much when management finally does begin to try to monetize all that traffic?