Facebook Gets Help From Its Friends [WSJ]
Music, Horoscopes Help Boost Site's User Base;
Will New Offerings Allow It to Catch MySpace?
By VAUHINI VARA
June 22, 2007; Page B1
No. 2 social-networking site Facebook Inc. has persuaded a 22-year-old college dropout, two Microsoft Corp. veterans and more than 800 others to help it do the hard work of catching up to News Corp.'s MySpace.
Last month, Facebook launched a new "platform" that lets people unaffiliated with the company build online services that operate within its Web site. Among those who have stepped up: Ali and Hadi Partovi, twin brothers whose iLike Inc. service lets users search concert listings, post 30-second music clips and compare their scores on quizzes testing music acumen with those of their friends, and Numair Faraz, who left college as a freshman and built a service called Facebook Audio that enables people to play full-length songs on their profiles.
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As a result of these and other outsiders' efforts, Facebook now offers more than 800 new services -- from photo slideshows to online file storage -- up from fewer than 100 a month ago. Meanwhile, those who are creating the Facebook services can access information about their customers and make money by selling related items and ads.
Other popular new services are fairly basic. One from Slide Inc., a San Francisco start-up, lets people highlight their "top friends" and recently had 6.3 million users. A horoscope service from RockYou Inc., a start-up in San Mateo, Calif., had 3.5 million users. Other applications include Flash Sudoku, which lets users add the popular numbers game to their page, and Stress Meter, which lets users chart their stress level for all to see. There's a weight tracker called Thinner; Socialight, which lets users share their favorite places with their friends complete with maps and photos; and a Carbon Diet Plan, which lists ways to improve one's ecological profile "and provides inspiration for your friends to do the same."
Adam D'Angelo, Facebook's chief technology officer, says he expects the services to become more complex and deeply integrated with Facebook in coming months. "We've only seen the applications that take less than a month to develop," he says.
Already all the activity has helped Facebook grow to 27 million active users from 24 million before the platform launch, with more than half using at least one of the new services, Facebook says.
Facebook's success has attracted the attention of News Corp. Chief Executive Rupert Murdoch. When asked in a recent interview whether newspaper readers are migrating to MySpace, he responded, "I wish they were. They're all going to Facebook at the moment." According to Web-tracking firm comScore Inc., 105 million people visited MySpace in April and 38.8 million visited Facebook.
Facebook is actually borrowing a tactic pioneered by Microsoft: Rather than building every piece of technology yourself, let others build on your "platform," much the way Adobe Systems Inc., Intuit Inc. and others built software for Microsoft's Windows operating system in the 1980s. Using this strategy, Facebook can nurture an ecosystem of developers who can create services far faster than Facebook could build them on its own.
It's also a profitable move for Facebook. The company expects close to $30 million in profit on revenue of $150 million this year, mostly from ads, say people familiar with the matter. By drawing more members and tracking which services members are using, Facebook can command higher Web-advertising rates, says Facebook Chief Operating Officer Owen Van Natta.
Facebook is also planning to offer paid services to the third-party service providers, creating a potential new revenue stream, Mr. Van Natta says. Options being discussed include brokering ads for Facebook partners for a cut of the revenue and offering a "wallet" service that would process online payments.
Facebook's newest music services are an early case study in how it all works. Facebook has long lagged behind MySpace in providing music services like concert listings and playing songs. That's where the Partovis and Mr. Faraz come in.
The 34-year-old Partovi brothers each led parts of Microsoft's Web business before starting iLike in Seattle in October, with funding from IAC/InterActiveCorp.'s Ticketmaster unit. They approached Facebook CEO Mark Zuckerberg in April, asking to become the site's exclusive provider of music services. In an email, Mr. Zuckerberg said no but told them about the coming platform.
Hadi Partovi immediately decided his start-up needed to move most of its resources to Facebook. "Somebody's going to end up being the Facebook music service," he says. "It's either going to be us, in which case we're made, or it's not." At a meeting with iLike's 15 Web developers, Mr. Partovi asked them to act quickly. "I basically said, 'This is a sprint, not a marathon,"' he says.
![](http://<br><br>Mr. Faraz, meanwhile, built his service in three hours by using his laptop in a San Francisco hotel.<br><br>Within days of the launch, iLike had hundreds of thousands of users, and Facebook Audio had thousands. Both say their growth has attracted the interest of record labels and artists who want to work with their services. This week, iLike began offering some full-length songs on Facebook by letting representatives of artists like Kelly Clarkson and Keith Urban upload their music. To stay ahead as more people develop services for Facebook, iLike plans to spend $200,000 on a marketing campaign. Already, the company is getting more revenue from Facebook than from iLike.com by displaying ads and getting commissions for selling songs and concert tickets via Facebook.<br><br>Facebook still faces some hurdles. The company is still tweaking its platform, to the frustration of the third-party service providers that have to scramble to keep up with its changes. The site has also slowed at times as it has struggled to handle the surge in new information now moving between users, Facebook and the third-party companies. "They launched it in a huge rush," says Jia Shen, founder of RockYou. "They've really made it brutal for us."<br><br>Mr. D'Angelo doesn't disagree that "there were a few small problems. But," he says, "we were able to fix them really quickly as soon as they came up."<br><br>Sarah Tucker, a 24-year-old in Little Rock, Ark., visits Facebook daily, mostly to stay up to date on her friends' lives. She recently started using iLike to post clips of songs she likes on her profile page. "I think it was good for them to give the option to put music on your profile, because that's something I like on MySpace," she says.</span></td></tr></table></div></tr></td><tr><td colspan=99 class=) |
