Google understood that and, in launching Google Plus, made obvious the benefit of porting their Facebook information over to your Google Plus account. Facebook panicked and slammed the door shut, twice. Work-arounds appear to remain, but they involve more work than the typical user is going to do. History suggests that if Facebook sees a significant uptick in the number of users exploiting a work-around, it will shut off that avenue as well.
Meanwhile, Google has taken to talking about how its users own their own data, and has coined the term "data liberation". They have a dedicated engineering team focused on mak[ing] it easier for users to move their data in and out of Google products.
Users should be able to control the data they store in any of Google's products. Our team's goal is to make it easier to move data in and out.At present, at least from a U.S. standpoint, pretty words, right? What are the odds that Congress is going to get in the way of Facebook's claiming to own your data. But then there's the E.U.
Key changes in the reform include:...Google is, in a very real sense, using its present position of strength to its advantage. People are tied into Google for a range of functions that Facebook does not offer, and are unlikely to switch over even to one of Google's more direct rivals. But if they create an environment in which the users of other services (who, for the most part, already have Google accounts) can more easily break Facebook's lock and replicate their experience on Google Plus, over time Facebook's advantage will erode.
People will have easier access to their own data and be able to transfer personal data from one service provider to another more easily (right to data portability). This will improve competition among services.
A ‘right to be forgotten’ will help people better manage data protection risks online: people will be able to delete their data if there are no legitimate grounds for retaining it.
Facebook's cautious IPO suggests that they know their present weakness, and that investors understand it as well. There is no indication that Facebook needs the money it's going to raise through the IPO, unless "need" includes the desire of certain early investors to cash in. Facebook has managed to grow, support itself, acquire other companies, and sign up pretty much every easily attainable Internet user in the world without going public. Their $5 billion offer is "real money", but the odds seem pretty good that those shares will be snapped up by investors hoping that Facebook will become the next Apple or Google, investors who can afford to take the risk that they'll be more like MySpace or even pets.com. A larger offering would run the risk of quickly saturating that market, then establishing a void of demand for Facebook at its exceptionally high claimed valuation. There's a point at which investors start to weigh performance against potential, and the more weight you put on performance the less shiny Facebook looks.
I think it was pretty brilliant of Facebook to try to shift from being a social network to a platform, as evidenced by the fact that Zynga accounts for a huge percentage of its revenues - and an even larger portion, when you consider Facebook's profits from ads on Zynga pages. But for the platform aspect of Facebook, its present revenues would look pretty weak. But as people increasingly use portable devices, a platform in their own right, are they going to want to go through Facebook to access Zynga, or are they going to want to access Zynga games the way they access Angry Birds - through a standalone app? Zynga can as easily pay Apple a 30% commission on sales of virtual tractors (I'm sure Apple appreciates Facebook's setting that commission point), and can do even better through the Android platform - and Zynga's shareholders, no doubt, want to see it grow well beyond the walls of Facebook. Facebook's apps have been criticized as under-featured, but how do you create an app for use on a rival platform? If the app is good enough that people don't use your web interface, you're "just an app". And if you try to become a platform on a platform - "Load the Facebook app, then load additional apps through Facebook" - you're going to have difficulty replicating the experience of using a native app on the device in your user's hands.
Facebook has also done surprisingly well with advertising revenue, selling billions of dollars worth of ads to be viewed by people who aren't in consumer mode. But unless they can translate that into something along the lines of AdSense, such that their ads are placed on third party sites where people are in consumer mode, they seem to have a growth problem. Outside of China, pretty much everybody who is likely to be an active Facebook user is on Facebook, and Facebook is reluctant to try to enter China. Adding more nominal users doesn't generate revenue (or sell virtual tractors). How do you increase revenue per user without making your ads a huge money loser for advertisers?