Live

Watch CBSN Live

Facebook Desperation Watch: Zuckerberg Looks Over His Shoulder

Facebook is one busy company this week. It's on the hunt for acquisitions, aiming to make 20 this year. Plus, the company will make it easier for users to see who can actually see what they post. (That's right -- "everyone" means everyone on the Internet, not everyone you've friended on Facebook.)

In other words, it's just another day here at Facebook Desperation Watch, as CEO Mark Zuckerberg fends off the growing strength of social networking competitors and realizes that the days when Facebook could snap up users and keep them may be over. That means finding other ways to slow down the likes of Google (GOOG), Twitter, and Tumblr.

They're gaining on you
Others are gaining on Facebook in various ways. Google+ hit 25 million users in the twinkling of an Internet eye and it's received about a million feedback messages so far. Users are spending more time on the site as well.

But the competitive world isn't just Google+. Twitter keeps trying to improve the user experience with expanding features like image galleries -- features that have been a tool for Facebook to keep its users coming in. And microblooging site Tumbler is reportedly talking to VC firms about raising $75 million to $100 million, which would give the company a valuation of roughly $800 million.

The specialty sites are a significant issue to Facebook as well. People only have so much time to spend online. The more time in other sites, the less time clocking in theoretical ad views on Facebook. The more money available to other companies, the greater a chance of success they have.

Indirect attacks
Facebook is big enough now that Zuckerberg can't simply grow his way out of trouble. How much bigger can Facebook's user base get, anyway? That's why he's working more indirectly. One way is through acquisitions. The aim isn't to buy up more features to drive the site, though that's a side benefit.

More important is locking up technical talent in Silicon Valley and keeping others from hiring people with the skills they need and as quickly as they want. There's already heavy competition for employees. Last fall, Google gave a big across-the-board raise to keep more employees from drifting off to Facebook. Even Google can be hurt by a talent drain. So could any other social networking company in the area.

Privacy control was a move in another direction. Facebook has developed a fairly horrible reputation on the privacy front. Without creating what appears to be significant improvement, the company might lose users and appear ever more a potential target to regulators. It can't afford to be seen as the social-network-that-is-willing-to-sell-you-out.

Related:

Image: Flickr user zaqi, CC 2.0.
View CBS News In