Facebook's Identity Problem

Saul Hansel of the New York Times has found his golden application. The Rhapsody music service has just launched a new application that lets you listen to a limited amount of free music and optionally purchase a monthly membership if you choose, ultimately porting their entire service within the confines of the Facebook platform.

What was significant for Paul was the applications ability to automatically import your favorite artists and add them to your Rhapsody playlist. The other thing of significance is that Facebook is creating “an identity that can cross applications.” That’s significant and it is one of the reasons that technologists have been so enthusiastic about the young platform. Could Facebook be the successful version of Microsoft Passport?

I think it could but as Paul points out, there is one issue that hasn’t been solved by Facebook: “using its information off the Facebook site.” This is something that I’ve been hoping for a while. The real challenge is how Facebook will be able to monetize activities off of the Facebook site. Ultimately they won’t be able to. I would argue that this doesn’t matter though because if Facebook becomes the standard for managing “your social graph,” Facebook won’t need to worry about users leaving the Facebook site.

That’s because users will still return to Facebook to manage all of their contacts, view pictures and manage events. Conversely, completely opening up Facebook identity portability would anger platform developers who could return to building websites on the outside. While I believe that Facebook will not embrace portable identities in the near future I do see it as an eventual necessity if Facebook wishes to maintain their dominance in the social networking arena.

The end of Paul’s article was interesting in that he has ultimately admitted that he has become a Facebook convert. He still believes in the “Golden Application” that I have spoken about for so long. As he says, “With so much energy devoted to Facebook, there will be a lot of effort to create more useful applications, rather than merely cute ones. If Facebook can relax its rules some and pay attention to the privacy concerns of its users, it is still in a great position to solve some vexing problems for both users and entrepreneurs.”

The bottom line is that Facebook is nowhere near the end of their reign as the leader in social networking innovation. Do you think Facebook will maintain this leadership position by eventually making Facebook identities and connections transportable to other websites?