Paul Graham's Letter to YC Companies

Yes, that's possible. But then it will be doing something new and different, isn't it? And it has to be more based on the spending power it has. And not related to its social network power.

Google put G+ on its home page, with not much success. Similarly, why should FB get a leverage out of just putting search on its home page. Unless the search is really better than Google's. What advantage FB has over say blekko in competing in search?

Agreed. Facebook could do everything.

Any economical transaction involves a social transaction as well. Facebook, can be the underlying architecture of every economy.

Facebook is at the core of a large, new economic ecosystem: apps, websites, ads, mobile, causes, almost everything you can think of. They can enter in any business, and for sure they are going to expand these below, to rich an enormous amount of revenue over the next years.

Ads: I don’t know about any platform that will be able to show ads to (soon) +1B people. Their current page views is impressive, around 1 trillion/month. Ads revenue still small, compared to the amount of users they have, because the right formula to show the ads to the right people takes time to arrive at a perfect level. But when it does, it will be like a sniper, it will show a product/service you want, the moment you want. The social graph is becoming the DNA of the entire world population, it will increase its value as time passes.

Platform/Apps: They have built one of the biggest platforms with 9MM apps. Third-party apps integration and the entire FB platform is just one the most powerful things on the internet. It allowed new companies to plug into the FB community and scale a new user base quickly. FB is basically becoming an app ecosystem, maybe more powerful than Apple itself. Millions of devs are implementing their FB authentication system “FB connect”, giving FB the ability to know every detail about an app usage, the ability to gather data and visualize those data to people that matter to them. Moreover, with the new App Center they can send a big portion of traffic to various mobile app stores and take a cut out of the revenue for all those “price x install” apps: in May 2012, 90MM users were sent directly to Apple’s App Store. 7 of iOS Top 10 apps and 8 of Android Top 10 apps are integrated with Facebook. App maketing is very lucrative. The ‘LIKE” button is having a tremendous impact on media, brands and basically on the overall internet traffic; it’s a viral machine. And being able to show “events/actions” in a user timeline, is incredibly powerful; listen, watch, read, cook…can you get an idea?

Specific APIs: There is some sort of overlap between APIs and FB platform. As of today all FB APIs are free. But I don’t believe in giving for free additional value will last forever. Directly or indirectly FB will start to monetize its API calls. Directly by charging the premium usage of the Social Graph data or other specific ad-hoc new APIs and indirectly by taking a cut of the revenue that third-party developers are generating by leveraging FB APIs. The Social Graph owns more than 100 Petabytes of user data, that’s 2x the size of the entire written works of mankind. 12,8% of the world population generates real-time data, analyzed and stored by Facebook. Obviously, some APIs will remain free but the rest will be a cash machine.

Coupons/Deals: They failed here, but they will not give up. With FB Mobile, they know where you are. They can show you related deals the moment you enter in club or a grocery. A Groupon-like experience, but empowered with a more accurate location, your personal tastes and of course, friends with their recommendations. 

Facebook Credits/Payments: I believe this is going to be a tremendous revenue stream over the years. It may even surpass the Ads revenue one day. I envision a world, where every time you have to pay over the internet and offline you will have to just click a button: “Pay with Facebook Credits” from Ebay to Expedia or use your FB mobile app at the cashier. It will become the universal currency.

Much more: there are a tons of things that they can do, from user subscriptions (imagine having just 10% of the users paying $9/month to access premium services); travels, to organize weddings. But you know what? They don’t need to, there is the platform for that.

Facebook is basically becoming a new kind of telco. Facebook is speed. A new version of Facebook is released every Tuesday, there are 12,000 modifications per month, more than 1000 developers deliver code to be released each week.  Facebook average employee is 26 years-old.

FB could do everything.

>>Recently I am seeing some 'xyz watched some on Social cam' kind of statuses on FB, of some xyzs who I am sure have not noticed such broadcast to their friends. These kind of mistakes, might just result in some very embarrassed and angry people.

This is true. Since I observed this. I take care to log out of Gmail/Facebook/Twitter once I am done with them. And I never browse anything when I'm logged into into one of those sites.

>>Am I the only one scared of clicking on anything, on any web page on the Internet, that is wrapped in 'Facebook blue' ?

A lot of people are scared. I had to call friend to tell him personally that the he watched that is showing up as the status might be embarrassing and he had to login and delete that from this status.

Isn't it a bit early for someone like pg to be calling this?

Calling it publicly essentially creates the effect, especially from an accelerator lead.

I'm not so sure you need to be so worried with your heavy heart, Eric. I know you and MemSQL will be just FINE. Certainly with all of your YC connections, you must be able to make something happen? You must have at least one strategic friendship you gained say... six months ago that could be of some tremendous value to you? Sometimes you need to socially climb and never look back in order to get what you want. I learned that from someone I used to respect. To me, a man without integrity is nothing. He's worthless. And so too is the value of his pursuits.