Developers Unsure Of Facebook's Enterprise Push

Microsoft is unlikely to directly acquire Facebook; the closely held, private company is working toward an IPO and reportedly not interested in selling out. But even a small stake would be a significant investment. The Wall Street Journal reported this week that Microsoft is in discussions to buy up to 5 percent of Facebook for $300 million to $500 million, valuing the hot Web property at $10 billion -- more than 5 times as much as the $1.65 billion in stock Google shelled out for YouTube last year and nearly twenty times the $580 million in cash News Corp. paid in 2005 to buy MySpace's parent company.

Would such a pricey investment pay off? Right now, Facebook has a huge audience and high visibility -- but the Web is littered with the bodies of once-hot, now-dead community networking sites. The graveyard's poster child is TheGlobe.com, a dot-com that rocked Wall Street in 1998 with a record-setting first-day IPO gain that left the never-profitable company with a valuation of more than $800 million. But TheGlobe.com's fortunes, and its audience, disappeared in the bust. Within two years, the community was gone and the Web site abandoned.

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Developers and business marketers using Facebook say it's hard to tell at this point whether the site's popularity will endure. Narinder Singh, co-founder of on-demand software services firm Appirio in San Francisco, created a Facebook profile several months ago and began eying the site as a development platform, but hasn't yet done any work with it for clients.

"You sound cool and interesting if you're aware of things like Facebook when you're talking to enterprises that want to stay on the cutting edge, but it's more style than substance at this point," Singh said. While Facebook talks up the enterprise, nothing in the platform is yet a must-have killer app for businesses, in his view.

Still, it could get there. The compelling, frustrating thing about Facebook is that everyone senses potential they're not quite sure how to exploit, solutions providers say.

"Everyone knows there's this huge, untapped market on Facebook and no one knows how to use it -- so if you come in with an idea, clients will listen," said RJ Owen, a senior developer with user-experience development firm EffectiveUI in Denver, Colo. EffectiveUI is one of the first services shops to incorporate Facebook into a client project. It's working on "Discovery Earth Live," an application for the Discovery Channel that will let users interactively explore global stories and issues. At EffectiveUI's suggestion, the application (slated for release later this year) will offer a "wigitized" Facebook version allowing users to tout selected stories on their Facebook pages.

Facebook is a good fit for extending that particular application because of its user demographics: more than any of the other social networking sites with a mass audience, Facebook attracts the kind of young, plugged-in students and professionals that Discovery Earth Live is likely to appeal to, Owen said.

The problem -- or, for marketers and the developers implementing their projects, the opportunity -- is that those users are generally using Facebook to goof off. Stuart Crawford, director of business development for Canadian IT services firm IT Matters, is bullish on Facebook's potential to help small businesses like his market themselves but admits that the only customer queries IT Matters fields about Facebook right now are "how can we block our employees from using it?"

Facebook is astonishingly sticky: more than half of its 43 million active users return daily. What they come back for, though, is chatter with friends and addictive, silly software toys. Some of Facebook's most popular applications at the moment are "Blind Date," "HoboWars" and "Rock Paper & Scissors," which is exactly what it sounds like: "The classic game of Rock, Paper and Scissors, now with improved formula for extra fun!"

Owen sheepishly admits to being drawn into the entertaining frenzy. He plays in a Facebook fantasy game -- "the interface is just horrible; it's amazing how addicted to this game I was" -- and spent two weeks checking back daily to see if he'd progressed up the ranks in a ninja ranking widget. His colleague Adam Flater, an EffectiveUI software architect, sees Facebook's fluffiness as an essential part of its appeal.

"Users are adopting things for their sheer entertainment value right now. When a client wants adoption, these are the tools to do that with," Flater said.

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