Friday, 26 October 2007

Facebook's challenge

Facebook's deal with Microsoft means that it's starting a battle against Google but we are in a bubble like 1999-2000: this is the opinion of Saul Hansell of New York Times.

The Greed of Facebook
"What’s significant is how much money Facebook is raising and what it wants to do with it. Facebook took $250 million from Microsoft and hinted that it is looking to raise more. It said it wants to grow from 300 to 700 employees. And it defined its business as “social computing.”

This is a signal that the company wants to take on Google, at least in some realms, by having a battalion of engineers developing original technology. That’s very different from most Web 2.0 companies that pride themselves on using a handful of engineers to do quick, lightweight front ends. And it’s different from MySpace, the other big social network, which is adding media content but can’t seem to improve its central technology.
So we’ll see if Facebook makes the same mistakes that killed so many companies 6 years ago. The biggest one is raising a lot of money and then spending all of it too fast. There is nothing that makes a louder boom than a company with high burn rate, little revenue, and investors who are fed up with funding dreams."

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