According to Wikipedia, “In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.” Next year, Facebook plans to acquire twice as many companies as it has this year to keep up with new ideas, innovation and technology.
We’ve all witnessed monopoly litigation in the news with battles like The United States vs. Microsoft and others. There are some very clear definitions by the U.S. Department of Justice on what a legitimate monopoly attempt looks like and what it doesn’t look like.
Last week Facebook announced it’s acquisition plans for 2011 and after reading the list of potential candidates (about 15 or so), I realized that as long as the people choose Facebook as their social network of choice and Facebook only acquires companies that only compliment their business (which is almost anyone they want) instead of competing with them, they for the most part have full carte blanch to build out their business however they want with no real competition in sight. In fact, they’ve now created a more rigorous competition in hundreds of industries around the world that are vying to get the attention of people on Facebook in a way that converts to real revenue. Companies are realizing that regardless of what industry they are in, they may soon start needing Facebook so that their business is where the people are. Foot traffic is becoming a thing of the past. Instead we’re all gonna be like virtual push-cart vendors going from profile to profile, trying to meet a need.
Think about it. The planets have aligned in their favor on a level that few (if any really), other companies have experienced. Successful companies almost always have some competition that drive them to create better products or services so they can continue to lead. Facebook can acquire any type of company that will augment and build on the foundation of behavioral data built by us, you and me, and over half a billion other human beings. Facebook has a customer base at their fingertips that is 100% opt-in by word of mouth referral. The beauty of it for them is that since they are in the business of people, by default they can get involved in ANY industry, without ever becoming a monopoly in the legal sense if they play their cards right.
Find me another business that has pulled something like that off, at that scale, in less than a decade of existence, and I’ll show you the rainbow covered unicorn that is running around my backyard.
