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Facebook could be next Google

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A new fad is sweeping across Silicon Valley, causing excitement, confusion and hyperbole not seen since the dot-com bubble.

It began in May, when Mark Zuckerberg, 10 days after turning 23, took the stage in a San Francisco warehouse and announced he was opening up Facebook, the social network he founded at Harvard University, to outside programmers. Anyone can now build little programs, or “widgets,” into the network.

To illustrate his idea, Zuckerberg projected onto the wall behind him a “social graph” — a pattern of nodes representing Facebook users and the links among them. Since then Facebook and the idea of the social graph have become the favourite, if not the only, topic of conversation among the valley’s geeks, venture capitalists and Internet moguls.

Zuckerberg compares his graphing of human connections to the work of Renaissance mapmakers. Facebook is growing furiously and may catch up with MySpace, the biggest social network. Outside programmers have added about 5,000 widgets.

One of Facebook’s investors estimates the social network’s revenues in 2007 at only $100 million, mostly from selling ad space, with tiny profits. Nevertheless, the Internet’s giants — Yahoo!, Microsoft and Google — are offering to buy Facebook or a stake in it for a price that would value the firm at many billions. At a Facebook conference on Graphing Social Patterns, panellists said the firm might be worth $100 billion and that it is the new Google.

How much of this is hype?

Facebook has made two genuine breakthroughs. The first was its decision to let outsiders write programs and keep all the advertising revenues these might earn.

This has led to all kinds of widgets, from the useful (comparing Facebookers’ music and film tastes, say) to the inane (biting each other to become virtual zombies). The entire Internet industry reckons this was clever and is planning to copy it.

This week MySpace said it would open its site to outside programmers. Google, which owns Orkut, a social network extremely popular in Brazil and parts of Asia, is expected to do the same soon.

Facebook’s second masterstroke is its “mini-feed,” an event stream on user pages that keeps users abreast of what their friends are doing — uploading photos, adding a widget and so on. For many users, this is addictive and is the main reason they log on so often.

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