Yesterday, Facebook went shopping and picked up some FriendFeed. Many, including my colleague Michael Hickins, are shaking their heads in disbelief over how unwise an acquisition this likely was. And I can't completely disagree, as there's a lot of evidence for this strategic view. But the result may not be quite as terrible as all that. I know, not the rousing vote of confidence. But you have to ask whether sometimes businesses must take a move that doesn't seem wise, but that is less dangerous than doing nothing.
In this case, doing nothing would have meant not having a counter to Twitter, and that would have been tough. A problem that many companies involved in Internet communications miss is that they've only got one piece of a puzzle. As I mentioned back in June what people want to achieve can be ridiculously complex:
- Decide on whether to communicate one-to-one, one-to-several, one-to-many, one-to-very-many (full broadcast), several-to-several, or many-to-many.
- Choose whether communications happen synchronously or asynchronously, so all the people involved may participate as they wish on their own time, or all connect at the same time.
- Pick any combination of writing, audio, images, video, applications, or masses of data.
- Allow one party to do the communication and others to receive, limited participation for some of the audience, full participation for any of the audience, or any degree of participation and interaction for all parties.
- Use any combination of communication mediums, including computers, handsets, specialty devices like e-book readers, broadcast radio and television, satellite radio and television, and Internet connectivity.
Although Facebook users can post messages and links for friends to see and send something privately to another, they haven't had the ability to easily move beyond an insular I-deal-with-the-people-I-know restriction. The genius of Twitter's approach is to allow people to become electronic publishers, albeit in 140 character chunks, to audiences that they don't know and that they don't have to introduce themselves to. There is no necessary mutual relationship as in the "becoming friends" process on Facebook.
Clearly many people want the ability either to actively micro-publish themselves or to sample from what the service has to offer. And management certainly knew that the company had to expand its view of communications, which is why is instituted a new search capability so users could monitor all of Facebook for trending stories. There was no way that Facebook has the resources to go into a bidding war over Twitter.
But it could afford FriendFeed, particularly because, as Michael noted in quoting Forrester analyst Jeremiah Owyang, the company "never hit the hockey stick," referring to the sudden explosion in popularity and success that so many tech businesses plan on reaching, but that so far fewer actually achieve. Given Twitter's dominance of this particular form of communication, FriendFeed wasn't about to enter the Stanley Cup finals in the near future. So its founders and investors get a cash-out and Facebook acquires an important type of communications technology at a price it can afford.
As to whether Facebook pulls off a successful integration of the companies and makes a strategic advantage out of having FriendFeed, they jury is still out. But looking at what others have managed, the odds aren't too good. Depending how it plays out, I'll predict the newest mocking name for the result: FaceFeed.