I am very happy when something exciting happens in social networking sphere. My research is on online communities, albeit of a different kind. Online communities have risen to become the new age "technology". Just like Microsoft missed the boat on the internet and became the silent bystander as Google redefined technology, Facebook seems to be bypassing Google in a new race to dominance in social networking. Google has languished terribly in engaging users - not in consumption but in its production. facebook has been more engaging and clever in developing tools for its users - something which similar sites such as MySpace have also missed out on.
Google has an amazing ability to figure ot things that are very useful to users - its finance tool, search tool etc. Obviously, when you invest millions of dollars in hiring scientists to cook up practical stuff - you ought to be good. However, Google's social networking app - Orkut lags the leader Facebook. It is very easy to dismiss social networking apps saying they are a bunch of useless internet getaways for teens. Silently, however, these online communities have grown tremendously and marketers are salivating at the prospects of advertising to 200 million teens on a social community. The new applications that are popping up on Facebook enhance its utility and endow users with an ability to communicate more efficiently and interact with richer media content. VC's are clamoring to fund application developers that are focussed on Facebook.
All this still needs to be taken with a pinch of salt. Microsoft is still formidable, Google is still nimble and intelligent, and Facebook is still young. It will take time, and as the "liability of newness" goes organizations are more likely to perish in the first few years of their life. If Facebook can outsmart others, survive the initial rough period, I am sure there is going to be a goldmine for its founder and early investors at the end of the rainbow. I for once will make it sure that I don't miss out on an investing opportunity, something that I foolishly did when Google went public.