I continue to be impressed by the growth of Facebook and MySpace. However, I keep waiting for them to do something that kind of breaks the mold. I used to work at a now-defunct portal company in the late 1990s and we were trying to execute the same business model as others in the space (mainly Yahoo!). The model basically works as follows:
1. Find a sticky service that users want (in web 1.0 it was and still is search)
2. Build a large user base around your core service
3. Layer on related services to extend the relationship you have with users.
4. Establish yourself as the jumping off point for your user base’s Internet experience
If you substitute “community site” for “search”, you have all of the makngs of a classic portal strategy.
Thus far, MySpace and Facebook have been really focused on nibbling or biting around the edges of online advertising. They have the clout to make some noise here, but stealing share from the market leaders doesn’t sound too disruptive to me. Aside from dethroning Yahoo! or Google, this is a fairly conventional strategy. What would be disruptive? I will throw out three ideas, none of which might actually make sense:
Buy or Build a Search Engine – This is a longshot, but whhat if one of these sites bought or built a search engine? I believe that the user communities for these sites probably do a fair amount of web searching. I bet that most of that (probably) happens “off-network” for them. There could be a real revenue opportunity if these sites coud roll out search capabilities and capture ad revenue from selling/serving ads. This would be hard but would really shake up the world as we know it today. It could even be a people-powered web search a la de.li.cio.us if they wanted.
MVNO – MySpace has dabbled here with the exclusive tie-up they did with Helio. However, I think that there is an opportunity to do something even bigger in the MVNO space, where these networks use their user base and brand to deliver a youth-focused MVNO with more control over handsets and the applications that run on those handsets.
Cable TV Channel – MTV dominates this niche. When was the last time they faced real competition? Television is not dead (yet) and there are lots of advertising dollars at risk here.
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