HipMojo.com http://watchmojo.com/web/blog Covering Online Video, Web, Search, Investing, Technology, Strategy, Investing, M&A, Financing, VCs Sat, 21 Nov 2009 21:40:57 +0000 http://wordpress.org/?v=2.1.3 en Facebook, Slide and the Great Social Network App Swindle of 2007 http://watchmojo.com/web/blog/index.php/2008/06/08/facebook-slide-and-the-great-social-network-app-swindle-of-2007/ http://watchmojo.com/web/blog/index.php/2008/06/08/facebook-slide-and-the-great-social-network-app-swindle-of-2007/#comments Sun, 08 Jun 2008 19:29:40 +0000 Ashkan Karbasfrooshan EntrepreneurshipFacebook.comFinancingInternet & WebOnline AdvertisingSlideSocial Networking http://watchmojo.com/web/blog/index.php/2008/06/08/facebook-slide-and-the-great-social-network-app-swindle-of-2007/ Fake Steve Jobs was absolutely correct in saying that the “Facebook and Slide ecosystem” represented a ponzi scheme of sorts.  No one in the Valley will say this, because they would run the risk of burning too many bridges… but the truth is that while Facebook has created an interesting business, it also lost a lot of value by opening up to developers and whoring their audience.  I log in to Facebook less and less frequently, and I am probably not alone.

But the euphoria that fanboy developers had for Facebook’s platform helped lock MSFT’s interest to the tune of a $15B market cap, on paper… it was not a coincidence that no one other than Slide founder Max Levchin stood up at the F8 event and hailed Facebook’s platform as the platform to pick up the baton from MSFT’s Windows ecosystem.  That kind of developer envy led to MSFT’s investment… which by of itself was smart (it c*ck-blocked Google from Facebook and ensured that no one but MSFT could ever buy Facebook if an exit was warranted).

But running with the ponzi scheme analogy: once Facebook locked in their $15B valuation, then it let follower Slide lock in its own crazy valuation: $500M pre-money for what is really nothing other than noise on an otherwise useful social network.

Alas… much the same way that one year into the journey Facebook is no closer to developing a business model, Slide now realizes that a Facebook-obsessed distribution strategy is folly… and a Facebook-centric monetization strategy is as realistic as an orgy starring Santa Claus and the Tooth Fairy.

Facebook can actually build a very valuable ad-supported business if it gets off their “we’re a technology company” mantra and accepts that it needs to act more like a media company.  If it does not want to be a media business, which is fine, then stop it with the advertising business model mirage-chasing.

Facebook has a shot at making that $15B valuation into reality, Slide?  Not sure… Today’s move at least makes me realize they realize that, too.

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