CBS Evening News
May 22, 2012 6:57 PM

Start-ups cash in on Facebook's success

By
Rebecca Jarvis

(CBS News) NEW YORK - The buzz over Facebook's trading debut seemed to fizzle. But with more than 900 million users, Facebook is already a business success story. As CBS News correspondent Rebecca Jarvis reports, it's also a launching pad for tech start-ups trying to cash-in on its success.

Entrepreneur David Hyman is so confident in Facebook's future, he's staking a business plan on it.

"Facebook has quickly become the key cornerstone to our marketing and to our business plan," he said.

Hyman founded MOG, an online music company that gives members access to more than 15 million songs.

"A good analogy is Netflix. You pay a flat monthly fee and it's all you can eat," he said.

But the online music market is crowded and Hyman needed to grow his company quickly. So MOG teamed up with Facebook to create an app that offered a free version to users who share playlists.

"When you listen to music on MOG, it automatically populates on your Facebook page, so that your friends can see what music you are listening to," said Hyman.

MOG's membership increased ten-fold.

"The biggest challenge for every entrepreneur in Silicon Valley is getting people to discover your business, " said Bret Taylor, Facebook's chief technology officer.

He added: "You're two guys in a garage. No one knows your name. How do you get people to discover your business? And that is really the fundamental value that Facebook provides, and that's why it's so significant for so many industries."

But make no mistake -- Facebook also gets a huge benefit.

Chief operating officer Sheryl Sandberg explained in an interview last fall that apps have helped her company evolve beyond just photos and status updates.

"We want everyone to bring their friends along when they listen to music, or bring their friends along when they read articles, or bring their friends along when they watch videos," said Sandberg. "But we do not produce music or articles or videos -- rather we put technology out there that other companies can integrate with."

Since January, more than 3,000 apps have launched on Facebook. And every app gives Facebook a better sense for what makes each user tick.

"Facebook believes, and we agree, that the music you listen to is a huge reflection of who you are," said Hyman.

That clearer picture of what and who influences you translates into more targeted advertising.

"It's a much more powerful tool for Facebook to use for marketers -- absolutely," said Hyman.

In an industry that's change or die, it may ultimately be Facebook's business friendships that keep it ahead of the timeline.


Add A Comment +

Follow CBS Evening News

Scroll Left
Scroll Right More »
CBS News on Facebook

  • 48 Hours iPad App

    Big changes for the 2012-2013 season! Watch the current week's episode for FREE up to a week after it airs or subscribe for access to all shows, classic episodes and more!