Ballmer Thinks Facebook At Risk For Being A Fad, We Think Not

Microsoft (MSFT) CEO Steve Ballmer, following rumors last week that the software giant is considering an investment that would value the social networking company at $10 billion, is saying the craze for social networks such as Facebook risks being exposed as a “fad.”

I think these things [social networks] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.

Facebook is also built on technology that “dozens of people could write in a couple of years,” he told Times Online. On the other hand, he suggested that the combination of the well-known brand and the community of more than 40 million users has some value.
But is Facebook destined to become a fad? I don’t think so.
Facebook’s biggest problem right now is its escalating legal issues regarding the safety of minors on its site, not whether or not it’s a fad. As of August, the number of unique users on Facebook had soared 117 percent year-over-year, to 19 million, according to Nielsen/NetRatings. Originally open to college students only, the growth over the last year was first fueled, in September of 2006, by Facebook opening its doors to all interested users, then by its announcement in May that external technology companies could develop advertising-supported mini applications for the site.
Ballmer compares the potential faddishness of Facebook to Geocities (which was bought by Yahoo for $3.6 billion in 1999). But Facebook is different. Encouraging outside developers to create applications for Facebook enables the site to constantly add new content for its users without having to spend any money in-house. New, easy-to-find content, whether created by friends or outside developers, drives the growth of social networking sites.
Additionally, Facebook is a mix of personal and professional social networking. And it’s about to be an even better mix, as the site will soon add the ability to separate work “friends” from social ones. Lindsay Blakely of Fortune asserts that this “seemingly innocuous change… could pose a threat to business networking site LinkedIn.”
Ultimately, though, social networkers aren’t as fickle as some would like to believe. Sure, there’s always the possibility that something bigger and better will come along, but anyone who has actively belonged to a social networking for a significant length of time knows that it’s difficult to just pack up and move from one community to the next.

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