Can Facebook Avoid The Curse Of Friendster?

Have you ever heard of Friendster? If you live in the United States and are under the age of 20 then probably not. Anybody in the social media space knows Friendster as a metaphor for a great success gone awry. Friendster was the first site to make social networking mainstream through an invite only system which attracted millions of users during which time the founders turned down a $30 million acquisition offer from Google.

Every successful social network has received an offer from Google and other internet giants at one point or another and Facebook is no exception. MySpace and Bebo both eventually caved to the pressure of larger offerings worth hundreds of millions of dollars. Both companies are now losing traffic to Facebook which has become the largest global social network. Don’t call Facebook a social network when you are with Facebook employees though … especially around Mark Zuckerberg.

The phrase “social network” has been tainted with failure and Mark Zuckerberg wants no part of that. Instead they prefer to call Facebook a “social utility”. The hope is that Facebook can continue to experience growth for years to come. With Facebook surpassing 225 million and on track to surpass 300 million this year, one has to wonder when Facebook’s reign will come to an end. Even more important than ongoing user growth is continued revenue growth.

The company is expected to post more than 100 percent revenue growth this year according to numbers that have been floating around over the past few days. It will be important to continue that trend. Some of that growth may come from displaying ads on Facebook Connect sites as he told Reuters. One issue currently is that Facebook’s eCPMs are still dismally low which won’t be much help to most web publishers.

Then again Facebook’s ad platform is just evolving and ultimately if the company can retain users and truly be the center of their “social graph”, Facebook could be sitting on a breakthrough innovation. The only key now is retaining those users and given the rough history of social networks, Facebook will need to be the first to buck the trend. If Facebook can buck the trend than a public offering “in a few years” is in fact a possibility. If it can’t, it will truly be one of the most spectacular failures ever.

No matter what ultimately ends up being the most profitable revenue model, Mark Zuckerberg’s determination to build something massive is clearly strong. The company continues to push ahead and no error so far has been able to knock the company off its rapidly growing pedestal. Now we’ll just have to wait and see what the future holds. One thing is clear: Mark Zuckerberg is in for the long haul, one of the longest hauls any Silicon Valley startup has experienced prior to going public.