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Facebook opens up

Once exclusive, soon open to all ... Facebook plans to create 500 regional networks and allow users not affiliated with schools to join. College students and alumnai with valid .edu email addresses will still be in their own private networks.

Unless Facebook's management thinks that MySpace and other start-ups risk completely taking over the social networking space, I think this is a very bad move. On paper, it may look like a great idea: get big whilst the getting big is
good. However, they are changing the fundemental nature of their service, and their brand perception will change along with it.

By opening up, they are diluting thir brand value and USP and risk becomming just another me-too social network. They stand to lose the thing that made them so unique: exclusivity and availability to students and alums, only.

Their current business model is extremely organic and would continue to grow naturally as new students/freshmen join Facebook. The only reason why I can see them doing this is to get big in a hurry in order to cash out - something that Facebook has not been shy about trying/announcing in the past.

Fred Stutzman, the blogger/entrepreneur who I feel has the most consistently salient commentary on Facebook, puts it nicely:
While I'm sure Facebook's confidence in this move is slightly lower following the feeds debacle, their logic is grounded in fact. As long as the fundamental DNA of Facebook is not changed - meaning exclusive groups remain - this won't be a tremendous change. However, for Facebook users, the symbolic nature of the change from exclusive to non-exclusive could be viewed as strongly negative.

With the new Facebook, there is no longer a notion of exclusivity - Facebook is just another SNS, albeit with a exclusive model that can now be mass-appropriated by competitors.

The Facebook is a unique place because its users feel a strong sense of ownership and involvement - a sense spawed by the fact it was exclusive, that it was their own space. With this new move, this sense of ownership is lost; the Facebook is no longer its users' space - it is everyone's space.
Following last week's controversial launch and apology regarding their News Feed and Min-Feed features, it seems that Facebook is prepared for the backlash. Here is a quote from a spokeswoman:
Whenever we've opened our network, our existing members have reacted negatively, even though they've always adjusted. We're sure this will be no different, but we think it's in the best interest of the community.
Pete Cashmore notes that the big winner here could be Microsoft, given that their newly struck ad deal could be worth much more than originally expected. Unless, of course, they knew that this change was already in the works.

In the popular poker game Texas Hold 'em, this would be called an all-in move: putting all your chips at risk in the hopes of a big payoff. Given Facebook's nine million members, a steadily growing business, a popular brand, and a white hot market, did they really need to make such a big bet? My gut says no.

Michael Arrington, AdAge, Forbes, MediaPost, and GigaOM are among the other people talking about Facebook today.


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