I’ve never been impressed by the assertion, routinely advanced by tech pundits, that Facebook “isn’t cool anymore.” Of course Facebook isn’t cool anymore. It hasn’t been cool for years, if it ever was. It beat MySpace because it was cleaner and more attractive, not because it was cooler. You know what else isn’t cool? Searching for things on Google. Composing documents in Microsoft Word. Email.
The fact is, contrary to what some in Silicon Valley would have you believe, being cool is not a requirement for a multibillion-dollar business. If anything, the two concepts are contradictory. So the fact that Facebook isn’t cool anymore does not mean that Facebook will soon go the way of MySpace. What it means is that Facebook has graduated from helping college kids stalk and flirt with each other to becoming an interactive online directory, communication platform, and photo album for a huge portion of the adult world. Facebook isn’t cool, it’s huge. It’s lucrative. It’s important. Mark Zuckerberg gets that.
And yet: College kids still need ways to stalk and flirt with each other. High school kids even more so. And ideally, they’d prefer to do that on a platform that doesn’t double as a convenient way of simultaneously broadcasting things to every member of your family. That is why the cool kids aren’t using Facebook as much as they used to. It’s simply gotten too big.
None of this heralds imminent doom for Facebook. Still, Facebook’s business model is based on near-ubiquity, so the company understandably feels threatened by any up-and-coming social network that threatens to lure a large chunk of users away from its siren servers. That’s why Facebook bought Instagram for $1 billion in April 2012, a time when no one else was valuing the photo-sharing app at even half that price. Today, as I wrote about Snapchat reportedly turning down a $3 billion offer from Facebook, I revisited the column I wrote last year about the Instagram acquisition. From the final paragraph:
… Instagram appealed to 30 million users despite not being a part of Facebook—and perhaps because it wasn’t part of Facebook. And if that’s true, then Facebook has a problem. Mark Zuckerberg can only buy so many $1 billion companies, and thanks to the app stores built by Google and Apple, the supply of tiny, potentially revolutionary startups is endless. If it keeps on spending like this, even Facebook will eventually run out of billions.
I was right about the limitless supply of anti-Facebooks—the Instagrams, the Snapchats, the WhatsApps and WeChats—and Facebook’s willingness to drop billions of dollars to co-opt them. In fact, the Snapchat offer suggests the price is going up. That said, it's now clear that Facebook isn't going to run out of billions buying these types of startups. Rather, there will be some that won’t sell, or that Facebook simply can’t afford, and it will be forced to compete with them instead. In fact, Facebook did try to compete with Snapchat, by building a similar product called Poke, but it bombed. The cool kids knew what was up. And yet here is Facebook, still making more money each quarter than the last.
Facebook’s cool-kids problem, then, is not an existential threat. Rather, it seems to be an inherent limitation in the concept of a social network for everyone. You can have everyone, or you can have the cool kids, but you can’t have both. I’m guessing Facebook will settle for everyone.