Nowadays, it seems like tech start ups are getting less and less techie and more and more social. I blame Facebook for it, though at
times, it feels like I am the only one hating it, since Facebook's $50 billion+ valuations seems to suggest otherwise. Anyways, sometime back, FaceBook had started a new service 'FaceBook Deals', but now it has been given a new 'local' treatment. With the new twist, FaceBook has prepared itself for dealing with start ups like Groupon and Living Social.
Agreed that enfant terrible Zuckeberg and his FaceBook have made many a tech titans revisit their game plan. But would he be able to withstand the onslaught of yet more radical and nimble startups like Groupon? Essentially, the success of the new model again depends on the queen bees of the social cliques existing on Facebook. It may also cannibalize the ad revenue from competing sites. The one thing that goes strongly against Facebook is the paucity of manpower required for this kind of business. Just to give you an idea about the quantum of human resources required, Groupon currently employs 5000+ employees. On the other hand, FaceBook currently employs 2000 workers globally. So, the social networking giant really needs to shore up its human capital.
Another negative point about Facebook is the lack of credibility. The company had never been known for respecting its users' privacy and security. Most of the users have had their accounts hacked at one time or another. Although, these happenings have not stopped us from using FaceBook, but it would be whole new ballgame when we would be required to provide our bank details or credit card number for buying a deal. Letting Facebook know my inner thoughts about my boss is one thing, but my credit card number, Hell No!
Does that mean FaceBook should not venture into this field? No, why shouldn't it, after all, it has massive user base and even mild success in this venture may bring couple of million dollars for the company. And as a user, I would want it to be a success, since more competition inevitably leads to better experience for consumers.