Could the facebook replace yahoo?

I’ve been asking myself this question since watching the impressive developer supprt and explosive user adoption of fb’s new open platform.

If one views yahoo as the ultimate winner in the web 1.0 portal battle – in which yhoo was the early brand and then main consolidator of all related applications – I wonder if fb could emerge as the winning web 2.0 portal.

As the web 2.0 portal fb has massive advantages in that it can deliver on the singularly integrated platform which older companies like yhoo have always dreamt of. The amazing promise is that without acquiring anyone fb could deliver the best integrated applications from photos to collaboration. No more corp dev groups worrying about keeping up on the next hot category. No more massive m&a or r&d spending. And the rate of innovation could be massive as any smart college kid could build and launch applications with little capital and zero bizdev efforts.

One big question is whether the experience offered within fb’s container can be as compelling as outside. Most of the applications which have gotten huge traction so far are very light (like a top friends box). For other popular applications it has been less clear whether they are offering a better experience or just easy marketing hooks.

For fb’s platform to succeed in overtaking yahoo it has to offer applications that are fundamentally more compelling on fb (as in couldn’t be experienced any other way).

Unlike the msft vs apple platform battle where msft’s (appearance of) openness enabled it to offer a magnitude of applications that apple couldn’t keep pace with, portals must convince users that their photo sharing, email, calendar and search is better than one available standalone a url away.

Is there anything better about using flickr with your yhoo login? No. Yahoo/flickr do benefit from the portal’s ability to drive traffic and buying them is a way to capture that upside value. If our users will be selecting a video or photo sharing service why don’t we push a house brand.

What are cool integrated applications? Well, fb just enabled its own lab with thousands of competing ideas to find out. This is clearly a more scalable idea than google’s internal lab effort.

The other edge for fb is engineering. While yahoo’s long time cto has left and rumors are buzzing about engineering dissent, fb could be a more attractive option for the next crop of stanford cs kids than even google with a pre ipo stock and a young, no bs culture.

[Full disclosure: I was lucky enough to be an early investor in fb and I’m sure I’m heavily biased…but I’m also an investor in google and yahoo. Guess I’m like those slick people who give to all candidates so they can support the winner:) ] Sent wirelessly via BlackBerry from T-Mobile.

3 thoughts on “Could the facebook replace yahoo?

  1. People I know are now saying they believe Facebook could be a $5-10 billion company, and that Zuckerberg was right for not selling out at $1-2bln. I tend to agree, but that’s a lot of china, either way.
    I’ve been working on a Facebook app recently; there are still a few kinks in the platform, but that hasn’t stopped some apps from reaching massive saturation in very short order.
    Like you said, this is going to be huge.

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