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There is no question about it: Facebook is on a roll. Since it made the astute move to release its API for Web developers to create various widgets that will work on its network, scores have already been developed to increase the value and appeal of the Facebook experience. Expect many more.

The latest is a video classified applicaiton from called Garage Sale, which will allow Facebook users to upload videos of any possessions they want to sell. Think of it as a potential Craigslist on steroids.

This could be a valuable addition to Facebook, and video is a natural extension of online classifieds. This is especially true in visually oriented categories such as real estate and autos. Remember, these were the first verticals to jump on board images and other multimedia capabilities in online classifieds, such as 3-D tours.

And as we’ve mentioned many times before, these verticals are also more inclined to experiment with new forms of advertising, because of high margin, high consideration items, the general pressure for leads, and resulting inelasticity of ad spending.

Bringing Technology to All the Right Places

Integration of video will follow the classifieds group created in the Facebook network by Oodle, to bring classifieds to college campuses (Facebook’s sweet spot). This makes a lot of sense, given the turnover of goods (books, bicycles, couches) and apartments in the average college town.

The generation of users in college and in high school (Facebook’s other sweet spot) are also the prime users of online video. So the marriage of classifieds, video and social networking will harmonize nicely in this environment. This user set is also very in tune with mobile search and entertainment. Expect a better Facebook mobile product to surface soon, most likely for the iPhone or the rich mobile browsing experiences that will develop in its wake.

Classifieds and social have already proved to come together nicely by the original community classified site: Craigslist. Craigslist, however, has a very Spartan look and feel, which is central to the underground appeal that has driven its success and characterized its ethos. At some point, this will hit a wall without the multimedia functionality for classifieds, such as video, that online users will come to expect.

This presents an opportunity for others, and the marriage of social media and classifieds is already happening outside Craigslist. The Bakersfield Californian’s Bakotopia is doing some interesting things on a smaller scale, led by Dan Pacheco.

And Facebook itself has partnered with Jobster and Oodle (mentioned above), while MySpace has teamed up with SimplyHired to bring job listings into the social networking fold. This could represent an area of development for Facebook, given the targeted recruiting opportunities in Facebook’s core user base (think internships and intro-level corporate jobs for college graduates).

What’s So Special About Facebook?

So what’s the difference between Facebook and MySpace? Lots of things. First, it has a great deal more functionality and user friendliness baked in, compared with MySpace’s very perfunctory look and feel, search features, and overall level of functionality.

Also, knowing the power of social networking by seeing the traffic and level of immersion on MySpace (and extrapolating forward, given a more powerful engine), many users, advertisers and technology developers will jump on board and boost the site’s value and capabilities exponentially, via network effect. Opening its doors to outside development has therefore been a brilliant move for Facebook to take advantage of this cultural phenomenon and maximize the value it can squeeze out of it.

Third, give it time before the above factors sway MySpace users to the Facebook side. Given the herd mentality that drives social networking, it only takes a few to lead and the rest will follow. Indeed, MySpace’s massive base of users can deflate as easily and quickly as it came. This isn’t totally a zero sum game; I, and many others I suspect, will have accounts on both social networks.

But the majority of use for me (anecdotally, for what it’s worth) will be on Facebook. And again, the network effect dictates that the active contribution to a social network on an ongoing basis (adding content, interacting with others) drives its value.

So what’s the lesson for Facebook? Keep doing what you’re doing. Letting the outside world in to create the applications that will drive the value and appeal of the experience should be central to anything that calls itself a social network. This will also keep users around with ongoing innovation — rather than relying on the staying power of users’ need to stay social with the others in their network. Social interaction is fickle, as is the lead demographic of the MySpace set. Don’t let the herd rule your fate.

Through the innovation that Facebook’s open API will enable, we can also soon expect to see many more locally oriented tools developed in the areas of classifieds, video, local advertising (which took off to some degree on MySpace) and others that have yet to be concocted.

In the meantime, visit or connect to me on Facebook.


Related TKG Reports: Online Video: A New Local Advertising Paradigm, MySpace and the Social Networking Business Model

Update: Sebastien Provencher reports from FacebookCamp in Toronto, providing good insights and some Facebook usage data.

This Post Has 2 Comments

  1. Your article is slightly misleading, claiming that there is a ‘partnership’ between Facebook and In fact, have simply made a Facebook application – they don’t appear to have any direct commerical relationship with Facebook, any more than any other Facebook app developer has.

  2. Thanks very much for your comments Perry. You are right that “partnerships” is the wrong way to put this. Generally speaking i see Facebook apps as a sort of partnership with every company that decides to build one. But it isn’t a partnership in the traditional sense and i should avoid causing this confusion. I’ve changed the post accordingly and apologize for any confusion.

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