According to the TimesOnline, Steve Ballmer, CEO of Microsoft, has said that Facebook risks becoming a fad. I could not agree more although I don’t think it’s going to happen in the immediate future. Ballmer is correct though when he argues that there is “a faddish nature about anything that basically appeals to younger people.” As I suggested on Sunday Facebook is going to have to open up their network and attempt to become the “social backbone” of the web. Without doing so, I agree that Facebook could become a fad.
While Facebook is popular among the youth, it is also gaining traction among the older demographics. I believe that this is more so than it had ever been with other social networks. I frequently refer to my mother being on Facebook. She’s not the only one on there in her demographic. There are millions more. According to the Times, Balmer “added that there was little in the way of technology to justify the lofted valuation attached to a site expected to achieve revenues of only $150 million this year.”
The times states that “Mr Ballmer also noted that sites such as Geocities, an online community that was bought for $3 billion by Yahoo! in 1999, at the height of the dot-com boom, ‘had most of what Facebook has.'” Ultimately, these statements and others suggest that the $500 million investment by Microsoft for a 5 percent stake are increasingly unlikely. Did Zuckerberg turn down another offer, expecting a valuation of $15 billion as the Wall Street Journal previously suggested? All we can do is speculate.