The internet’s social network giant could be getting a little bit bigger in the upcoming months as it attempts to extend it’s power even further across the web. Facebook recently announced that it will soon launch Facebook Connect, a technology which allows Facebook users to participate on other websites using their Facebook ID’s. Users then have the option of re-broadcasting whatever they do, view, etc. on the third-party site to all of their friends on Facebook. For example, lets say Facebook strikes a deal with ESPN… if you decide to log on to ESPN with your Facebook username/password, anything you view, comment on, etc. on ESPN, will be updated on your Facebook account and into the ‘news feed’ of other users, provided you give permission to make such information public. Facebook has already ensured users that there will be privacy controls so that only information approved by the users will be public to their facebook friends (thus avoiding any “Beacon”-like disasters).
In reading the above article from the New York Times, I question the purpose of this new tool. Is it for the sake of increasing revenues? One would think so. The pressure is undoubtedly on for Facebook to prove that they are worth their ‘value’ and can generate increased revenues. However, there is no cash exchanged between the sites, thus no direct monetary profits to gain. And, while the article points out that Connect will undoubtedly increase traffic on the site, and consequently increase ad revenue, Facebook has maintained that the company has no plans to explore any other advertising potential with this new platform. So, can Facebook really generate significant profits from Facebook Connect?
I think it all depends on the success of this new application. If the majority of facebook users do actively use Facebook Connect, then Facebook will be adding an entirely new element to its product. As people click around on various websites, such information will be fed and shared via facebook, essentially allowing facebook to collect the data that advertisers want (ie. What products are most people viewing? What is the target audience for a specific product?).
And, although social networks have proven to be poor hosts for online advertisers in the past, I do feel as though this new application could generate more interest from advertisers who realize the direct correlation between a person’s website activity and the subsequent activity that may follow because such information was publicized through Facebook. Even if advertisers choose not to place ads on the social network, I think that just the implementation of this application could allow Facebook to strike deals with partnering websites to demand a share of the profits those sites may receive from ads as a result of Facebook Connect. If nothing else, I think that this new application, provided it is successful, will put Facebook further ahead of it’s peers as it essentially sets out to ‘control’ the web, partnering with big time websites, and replacing all logins with their own.
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