Facebook Launches Internet-as-Platform Play

Facebook has announced an API that will allow Facebooks apps to be used on any site. Although I thought their API was interesting, and it has certainly garnered a lot of attention, this extension is what really makes that platform interesting.

I believe that the time is very near where we will see web companies that do not have a significant presence on their main web site. Possibly even with no web site, or just a few pages of corporate boilerplate and contact information. Fred Wilson notes that his recent investment, social-gaming provider Zynga, had no web site at the time of the investment, but they are quickly building out a significant web presence. Applications can live as widgets across the web, with no need to become a destination themselves.

This move by Facebook immediately lets Zynga propagate all of their Facebook apps onto the whole web, with very little effort, while still benefiting from Facebook’s social graph.

The coming herculean battle will be how Facebook chooses to handle ownership of their social graph. They’ve moved from a very closed model to granting API access, and extended the use of that graph beyond the site, but anyone building a business on Facebook is at their mercy for the continued use of the graph. So far, the backlash has been minimal – they’ve continued adding features to give developers deeper access and broader reach, and no real alternative is available.

Thus far, it seems that they want to keep a monopoly on the graph itself – many believe this is their most valuable asset, but monopolies often appear to be sizable assets. Another emerging trend seems to be that the life cycle of monopolies is decreasing. Innovation means that the painful limits imposed by a monopoly are felt sooner, and solutions rise to relieve that pain more quickly. If a more open, significantly-sized social graph can be developed, I don’t see the value of Facebook in the equation.

Despite their many missteps over time, particularly Beacon and Zuckerbook’s painfully bland 60 minutes interview, this move makes it clear that Facebook is not asleep at the wheel. They are painting an example of the future of the internet, and I imagine they will make several more steps in this direction. The biggest obstacle to their own innovation will be how closely they cling to owning their social graph – coaxing people to enhance your monopoly can be a challenging task.