Wow, I’m not sure how to respond. I guess I’m glad you agree that Facebook is worth $100 Billion and I’ll now count you as a convert in my mission to convince the world that Facebook is indeed the NEXT BIG THING.

In fact, I wrote about how the Facebook story (see http://blog.adonomics.com) is really “Triumph of the Nerds — Part Deux” (with all proper credit to Robert X. Cringley for his great book and video about the advent of the first mainstream Graphical Operating System).

Facebook’s arrival will allow for another HUGE CREATION OF WEALTH and it will be interesting to see how Bill Gates, Steve Ballmer, Steve Jobs, Eric Schmidt, Larry Page and Sergei Brin react to this coming sea change.

The battle of the titans is about to begin and it will only help to accelerate the success of Facebook’s user recruiting efforts from my estimate of 200 million to your 500 million number to even numbers beyond these levels.

In that vain, you may have noticed the link about facebook adding “Friend Lists” (see http://www.insidefacebook.com/2007/08/29/speculation-facebook-adding-friend-lists-implications-for-top-friends-linkedin/). This will allow facebook users to begin to segment family, work, school and social friends into different lists (along with different sections for photos, videos, embarrassing wall posts, etc.) and make it much safer for lots of business folks currently maintaining a profile on LinkedIn to jump ship and join the fun on Facebook.

IMHO, this move is going to kill LinkedIn and their best hope would be to try to find a way to get acquired by Facebook for 1/2% to 1% of Facebook. Which given my valuation will turn out to be $500 million to $1 billion of post-ipo stock value. Not a bad deal (and one I hope my former company SHOP.COM is able to make).

Imagine what would happen if a BIG APPLICATION SUITE PLAYER (e.g., Microsoft) were to fully embrace the Facebook platform and shift all of their tech. support for apps into Facebook Groups like the “Official Microsoft Office Users Group” (see http://www.facebook.com/group.php?gid=2458432518 that I created and Steve Ballmer is already a member of). In addition, it would be trivial for Microsoft to change the install process for their entire Office application suite to encourage folks to register with their Facebook User ID (and perhaps earn some greater level of support or some other benefit like peer support through an app like CrossLoop.com).

This could mean another 50 to 100 million business users on Facebook in under 12 month’s time.

How much would this be worth to Facebook?

This is just one way in which Microsoft could quietly lock up an option to purchase some decent percentage of Facebook in the future without spending a dime today. In face, it would be a HUGE MISTAKE for Microsoft to buy facebook outright. It is only important that Microsoft prevent anyone else from doing so. The right kind of deal would allow Facebook to become HUGE on their own but to do so while having an alliance with Microsoft in the advertising domain.

So, the point of my post is not that Facebook will compete with everyone I listed but that they will leverage their gatekeeper / kingmaker role in the facebook eco-system to ensure they own a piece of the winners or extract a long term tax from partners who do most of the heavy lifting in areas like brand and keyword advertising.

Thanks,
Lee Lorenzen
CEO, Altura Ventures

Wow, I'm not sure how to respond. I guess I'm glad you agree that Facebook is worth $100 Billion and I'll now count you as a convert in my mission to convince the world that Facebook is indeed the NEXT BIG THING.

In fact, I wrote about how the Facebook story (see http://blog.adonomics.com) is really “Triumph of the Nerds — Part Deux” (with all proper credit to Robert X. Cringley for his great book and video about the advent of the first mainstream Graphical Operating System).

Facebook's arrival will allow for another HUGE CREATION OF WEALTH and it will be interesting to see how Bill Gates, Steve Ballmer, Steve Jobs, Eric Schmidt, Larry Page and Sergei Brin react to this coming sea change.

The battle of the titans is about to begin and it will only help to accelerate the success of Facebook's user recruiting efforts from my estimate of 200 million to your 500 million number to even numbers beyond these levels.

In that vain, you may have noticed the link about facebook adding “Friend Lists” (see http://www.insidefacebook.com/2007/08/29/specul...). This will allow facebook users to begin to segment family, work, school and social friends into different lists (along with different sections for photos, videos, embarrassing wall posts, etc.) and make it much safer for lots of business folks currently maintaining a profile on LinkedIn to jump ship and join the fun on Facebook.

IMHO, this move is going to kill LinkedIn and their best hope would be to try to find a way to get acquired by Facebook for 1/2% to 1% of Facebook. Which given my valuation will turn out to be $500 million to $1 billion of post-ipo stock value. Not a bad deal (and one I hope my former company SHOP.COM is able to make).

Imagine what would happen if a BIG APPLICATION SUITE PLAYER (e.g., Microsoft) were to fully embrace the Facebook platform and shift all of their tech. support for apps into Facebook Groups like the “Official Microsoft Office Users Group” (see http://www.facebook.com/group.php?gid=2458432518 that I created and Steve Ballmer is already a member of). In addition, it would be trivial for Microsoft to change the install process for their entire Office application suite to encourage folks to register with their Facebook User ID (and perhaps earn some greater level of support or some other benefit like peer support through an app like CrossLoop.com).

This could mean another 50 to 100 million business users on Facebook in under 12 month's time.

How much would this be worth to Facebook?

This is just one way in which Microsoft could quietly lock up an option to purchase some decent percentage of Facebook in the future without spending a dime today. In face, it would be a HUGE MISTAKE for Microsoft to buy facebook outright. It is only important that Microsoft prevent anyone else from doing so. The right kind of deal would allow Facebook to become HUGE on their own but to do so while having an alliance with Microsoft in the advertising domain.

So, the point of my post is not that Facebook will compete with everyone I listed but that they will leverage their gatekeeper / kingmaker role in the facebook eco-system to ensure they own a piece of the winners or extract a long term tax from partners who do most of the heavy lifting in areas like brand and keyword advertising.

Thanks,
Lee Lorenzen
CEO, Altura Ventures