At my Future of Mobile talk at Thinkspace last week, someone asked me what I thought of Facebook’s future. I came up with an analogy for explaining my perspective, and have since developed it further.
“All the big guys have potential energy. They are objects with mass at altitude. Apple, Microsoft, and Google’s altitude comes primarily from their massive profits. Facebook’s altitude results from having lots of eyeballs in their social graph. There are other things that contribute to their altitude that are important like owning lots of credit card numbers.
I think a strong business model that is generating large profit margins and huge earnings (not revenue, but profit) means the ‘object’ has an aerodynamic shape and control surfaces. As these objects (Apple, Microsoft, Google for example) fall, and they use their potential energy, they fall in a controlled manner. They can have direction and purpose. This gives me confidence.
On the other hand, Facebook is like a brick. Yes there is potential energy. But as it uses that potential energy it just falls straight down. Maybe it will sprout wings and be directed, but right now it’s just a big ugly brick falling…
This is why I would never invest in Facebook and I don’t like investing my time in startups that are all about gaining eyeballs without a clear path to profit. Yes, there is potential there, but it’s just too uncontrolled.”
I’d love to know what you think of it this analogy. Does it fly (pun intended)?