So yesterday I am flying back from Slovakia through London and I hear to girls behind me talking about Facebook. They are both discussing the fact that they would NEVER buy Facebook stock because they are both leaving Facebook, and of course it was just a “fad” and everyone else who joined is just going to get off as well so pretty soon (I believe the quote they used was “as fast as they became big, they will be small again”) there will be no one on Facebook. So of course I had to listen in more. Seems like the real reason is both of these girls had something bad happened to “a friend” of theirs. Something about some photos and getting into trouble. Then they were discussing how hard the privacy settings were so instead of trying to figure them out, they were just going to drop Facebook. I guess she hasn’t heard that Facebook has almost 1,000,000,000 users in the world, and I think I heard that is 16% of the world’s population. (I only wish I could have asked them, “Now what social network will you join?”)
Look, like social networking or not, it has now become an integral part of our lives. As a test, on the rest of the way home I counted how many times I saw the Twitter and Facebook logos. At the airports, on billboards, on magazines, at the coffee shop, on my iPhone. I counted 53 and I started at 1:00pm London time. Then today, I tried the same thing, reading my favorite blogs, answering email (with the logo’s at the bottom or advertisements), checking out competitive web sites. I got another 72 in less than 8 hours and I never left my office. Now I am not saying that privacy policies aren’t difficult to navigate, and they should be easy and protect a person’s right to privacy, but the fact of the matter is, social networks are here to stay and if you want to make things you do in life a little simpler, and be a part of the “in” crowd, you’re going to have to participate.
Now, I am a big Facebook and Twitter user and I find them both very interesting but for other reasons. I am into social media for two reasons. Marketing and Technology. I like to understand how when you have a billion people who all can communicate with one another, make something resonate. What makes a meme a meme. What is it that makes the school of fish go one way or another (and by fish I mean groups of people). When you can figure that out, you can really figure out how to market your products (and by products I mean technology). It really takes data.
What kind of data? Big Data. And this is where I think a lot of folks don’t understand the likes of Google, Facebook, Amazon etc… A couple of years ago a good friend of mine, Dave Vellante founder of Wikibon started plotting the market capitalization of a number of infrastructure companies (Apple, EMC, Cisco, Symantec, etc..)
We also plotted companies who provide cloud like services (Google, Amazon, Salesforce.com, Rackspace). In every case, the cloud infrastructure service providers market cap have all gone up. The infrastructure players who cater to cloud computing, such as VMware, have done well, but I can’t say that about all the infrastructure players.
Here is my theory as to why Facebook, as well as folks like Google and Amazon are set for growth. They have technology capabilities that others like EMC, NetApp, Cisco don’t have. If data, or Big Data, is the next big thing in IT, who knows better how to deal with that than Facebook? So, I don’t have the latest stats but lets just paint a picture here.
1) Facebook has almost 1B users – that is 1B mailboxes, do you know another company that has 1B mailboxes under management?
2) Photo’s – In 2009 (remember in 2009 there were 200M users – today they are 4x that
- They had 10 Billion photos (actually they had 40 Billon, they make 3 copies)
- 2-3 TB of photos are bing uploaded every day (I hear today that number is more like 20TB)
- Have over 1PB of photo storage (I am sure it is double that)
- Serve 15 billion photo images per day
- Photo traffic peaks at over 300,000 image per second
3) In 2011 they were running 300,000 servers
4) As of a stat in 2011 – 28% of people check their phone from their mobile device – so they support BYOD (bring your own device)
5) There are about 5,000 to 6,000 apps on Facebook so it is a platform you can develop on
Here is what I am saying, they know how to manage data probably better than anyone in the world. They know Big Data. They know how to extract information out of every piece of data they have. How do they know how to do this? They know data and they know IT. They know how to scale and they know analytics. They know meta data. They know things traditional IT is going to need to know how to do and yet the technology that Facebook uses isn’t really available to the general public. One day when these guys really want to make some money, they will turn their secrets on to the rest of the IT world and help us all to be more successful. I hope that day happens and that is exactly why I am buying some Facebook stock. And by the way, when the do go public, at approximately a $100B valuation, they instantly become #6 on my list. Just below Oracle and just above Amazon.