Facebook's Growing Power and New Battlelines

Posted by Fri,Feb 18, 2011 @ 10:00 AM

The Wall Street Journal reports that Facebook is making some enemies amongst other Internet firms like Google and Yahoo. Facebook, a seven-year-old company, now has 600 million users, was recently valued at $50 billion and had an estimated revenue of $2 billion last year. The company has become both a major competitor and benefactor in Silicon Valley.

Facebook has taken online-advertising revenue from companies like Yahoo and MySpace. It's seen as an electronic payments rival to eBay. And recent partnerships with smartphone makers will put Facebook in competition with Apple and Google. Facebook also competes with Google and Microsoft for engineering talent.

Facebook makes no bones about its aspirations. "We think every industry is going to be rebuilt around social engagement," Chief Operating Officer Sheryl Sandberg said. Facebook's current battleground is in online marketing. In the last two years, Facebook's has gone from 2.9% to 13.6% of the online ad market in the U.S. Facebook recently introduced location based elements that allow it to enter local advertising markets.

Facebook positions itself as an Internet platform which allows it to partner with other companies who build businesses off that platform. Thus, companies like Google and Apple are both competitors and partners with Facebook. When commenting on Facebook's status as a competitor, Google's Chief Executive Eric Schmidt said, "Winners tend to all do well."

Facebook's Growing Tentacles

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Tags: Facebook, Google

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