Facebook's grand plan for the future.

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Dec. 5 2010 6:46 AM

Mark Zuckerberg Uses the Word "Social" a Lot

Facebook's grand plan for the future.

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And while Facebook has the early lead, the changing nature of social structures makes this an inherently dynamic industry. "The fluidity of social networks is one of the reasons it's not entirely clear that Facebook will be the be-all and end-all," says one prominent social media executive. So far, however, no credible alternative has caught on. OpenID, a single sign-on service designed to work across many companies, is foundering; while Microsoft tried, and failed, in the 1990s with a single sign-on product called Passport. "Facebook has done a much cleaner job of exactly the same thing," says the executive. "It has basically figured out how to create a quasi-monopoly on the address book of the Web, a universal people directory. It's a fundamental service. If you own the address book at some point you can actually monopolise communications."

Last month, Facebook took another step in this direction when Zuckerberg announced that the site would now offer @facebook.com e-mail addresses to its members. He noted that users were already sending 4bn messages a day via Facebook Messages.

Facebook's burgeoning power caught the attention of the biggest companies in Silicon Valley years ago. Many, including Yahoo, Microsoft, and Ebay have sought to partner with Facebook. Google tried to invest in Facebook in 2007 but was beaten off by Microsoft. Since then, it has increasingly become Facebook's main adversary.

The fear, according to people close to Google, is that as Facebook users index the Web through their Likes and shares, Google's algorithmic indexing of the Web will become less relevant. "Search is a business that will be pretty profoundly disrupted by social media," said Augie Ray, an analyst with ­Forrester Research. "Ultimately, what matters to you is not what Google thinks is important, it's what your friends think is important."

Advertisers are already voting with their dollars. While Google still commands the lion's share of online ads, big brands are increasingly turning to Facebook, where they can target users based on stated preferences. According to comScore, about one in four online display adverts in the U.S. now appears on Facebook.

In an effort to respond, Google is developing its own more coherent social product. Buzz, a social service it launched earlier this year, flopped. A new effort is tentatively called GoogleMe. "It feels like Google is on red alert," says one source close to both companies. "There is a feeling at Google that this could be for them what search was for Microsoft."

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Few in Silicon Valley are optimistic that Google will deliver a Facebook killer. That Google just doesn't get social is widely accepted as fact. This being the case, Facebook looks on track to become an increasingly important part of people's online lives. The benefits should be easy to spot: As more sites integrate with Facebook, there will be fewer new accounts to create, fewer passwords to remember. Sites will be pre-populated with content you find interesting. The Web, once anonymous, will be customised to each person.

"Facebook has always thought that anything that is social in the world should be social online," said Matt Cohler, an early employee at Facebook who has gone on to work as a venture capitalist. "Anything where people ask their friends to help them make decisions—whether it's food or movies or travel—could be transformed online by social."

Though it can seem a tad Orwellian, Zuckerberg is resolute in his belief that the future is at once more social and better. "To be a technologist is ­fundamentally to be an optimist," Cohler said. "Technology is an amplifier and enabler of human behavior, so when you're creating it you'd better have an optimistic view of human nature."

Cohler and others close to Zuckerberg attest to his desire to do good in the world. That is reassuring, seeing as Facebook is a company with big plans for the future. "If you look at their behavior, they are not optimizing for the short term, or even the medium term," says one source close to the company. "They have a 20-year horizon." Exactly where this will lead is unclear. Technology moves fast. Last month, Yuri Milner, chief executive of a Russian investment group that owns about 10 percent of Facebook, said he believed Facebook would be powering artificial intelligence within 10 years.

Instead of maximizing revenue as soon as ­possible ("They haven't tried to make money yet," says one source who works directly with Zuckerberg. "They've made enough to keep the lights on"), Facebook is instead trying to weave itself as deeply as it can into the fabric of the World-Wide Web. Last year, Facebook board member Marc Andreessen told me the company's user base would "cap out at some point at the number of people who have electricity." Since that interview, Facebook has added more than 300 million users. "It's getting to the point where it is very hard to unseat Facebook," Forrester analyst Augie Ray told me. "Not just because people have their social graph established and don't want to recreate it, but because the more Facebook becomes integrated into the Web and mobile applications, the harder it is to ever replace."

This article originally appeared in Financial Times. Click here to read more coverage from the Weekend FT.

David Gelles is a technology reporter for the Financial Times.

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