Facebook: Phenomenon or Fad? You be the judge!

With more than 200 million users Facebook has become a global leader in social-networking websites! Facebook is aggressively moving beyond the home page to pursue its mission to become a “social utility" that helps people “connect and share.”

For many Facebook users it is just a single site but in reality, Facebook is connected to more than 10,000 other websites now recognizing a service called Facebook Connect, which enables users to use their Facebook ID and password to move quickly & fluidly between sites where registration is required. The service also adds new social functions to those other sites. For example, a person who posts a video on YouTube can also share it via Facebook with a single click. And Facebook has global reach, having been translated into 50 languages, with 40 more in development, the company says.

Every new Facebook user, every “friend” added, every business that starts a page, every Web entity that recognizes Facebook Connect - all add to the critical mass behind Facebook’s momentum. From a business perspective, the connections enhance the value of what Facebook calls the “social graph” - its ever-expanding map of human relationships - even while skeptics wonder about its ability to turn its popularity into profit.
How important is Facebook? Is it a Phenomenon or Fad? Mark Pincus, founder & CEO of a very rapidly growing game maker Zynga, likened it to Netscape, the browser start up that launched the dot-com boom in 1995.

Separately, Joe Greenstein, co-founder of Flixster, a site that lets film buffs share reviews and comments, suggested that Facebook Connect represents the 21st-century upgrade of e-mail. If Google ignited the so-called Web 2.0 business era, Facebook may be ushering in Web 3.0, he said. The opportunity, Greenstein said, “is theirs to lose.”

While Facebook has doubled its user base in the past year, MySpace has been slipping. Facebook only recently surpassed MySpace in U.S. users - both have about 70 million each, according to comScore. Facebook appears far more successful in holding users’ attention. A recent study by Nielsen Online found that the total amount of time Americans spent on Facebook in April increased to more than 233 million hours, a nearly 700% increase over April 2008. MySpace, meanwhile, endured a 30% decline.
In April, News Corp. hired former Facebook executive Owen Van Natta to take over as CEO of MySpace. This week, Van Natta announced plans to cut about 400 jobs from MySpace’s “bloated” work force.
Facebook’s own lofty aims were underscored during a spring news conference where Christopher Cox, vice president of product, delivered a presentation that included a portrait of the communications theorist Marshall McLuhan, known for saying, “The medium is the message.”
Cox said he thought of Facebook as simply as a website for college students in October 2005, when he first bicycled from Stanford University to visit the startup’s modest office in downtown Palo Alto. Facebook, which Zuckerberg famously founded at age 19 in his Harvard University dorm, was 20 months old then and lacked many features it has today. The start up had about 40 employees, including perhaps a dozen engineers. Cox, then 22 and about to start graduate studies in Stanford’s artificial intelligence program, said he didn’t consider himself a serious job candidate.
But as one of Facebook’s top technologists started drawing dots and lines on a white board and talking about “the social graph” - the first time Cox had heard the term - he found himself transfixed by Facebook’s ambitious vision. “Who do we communicate with?” Cox said. “Who do we trust? This is the value Facebook is creating for people.
Even as the globe has lurched into recession, the Facebook economy seems to be booming. In the two years since Facebook opened its platform to outside developers, more than 300,000 Facebook applications, or “apps,” have been created - games, quizzes, digital gifts and more. The successful apps boost users’ engagement with Facebook - sometimes called “stickiness” - but do not directly provide revenue.
Piggy-backing on Facebook has been profitable for several start ups. Zynga, which according to some reports is raking in annual revenues of $100 million with the poker game Texas Hold ‘Em and other games, has grown from 45 employees to more than 250 in the past year, Pincus said. About “70%, perhaps 80%” of Zynga’s growth, he said, could be attributed to Facebook.
So what do you think Phenomenon or Fad? What kind of social networking tools & websites are you using? What are some new state of the art networking tools?