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Business Impact

Facebook opens site to other companies

SAN FRANCISCO (AP) – Facebook Inc. is encouraging other companies to sell products and create software for use on the popular social networking site, hoping to expand into an all-purpose destination on the Web.

The company’s 23-year-old founder and chief executive, Mark Zuckerberg, said Thursday the move was similar to what Microsoft Corp. did decades ago, when the relatively obscure software maker began encouraging third-party companies to write programs for its personal computer operating system. The strategy made Microsoft phenomenally profitable and helped turn founder Bill Gates – like Zuckerberg, a Harvard University dropout – into world’s richest man.

”Until now, social networks have been closed platforms,” Zuckerberg told about 750 programmers attending the company’s first developer conference, dubbed f8. ”We’re going to end that.”

The Palo Alto-based startup has so far recruited about 65 companies to create software for the Facebook Platform, which will be opened up to any company starting Thursday night.

The best known third-party contributor so far is e-commerce powerhouse Amazon.com Inc., which is allowing Facebook members to publish book reviews on their profile pages. The feature will debut later this week.

Zuckerberg and his Harvard buddy, Dustin Moskovitz, co-founded Facebook in February 2004. The site was supposed to be the virtual version of paper ”face books” that Harvard and other colleges distribute to freshmen.

But within a month, the site had caught on at Stanford, Columbia, and Yale. By December 2004, it had nearly 1 million active users.

After the site opened up registration to non-college students last September, it evolved into a major social networking destination to rival MySpace.com, owned by Rupert Murdoch’s media conglomerate News Corp.

Facebook now has more than 24 million users who have logged on in the past 30 days. Venture capital firms including Accel Partners have contributed more than $35 million (euro26 million).

Critics say Facebook – which is getting more than 100,000 new registrations per day – cannot maintain its scorching growth rate. Others worry that Zuckerberg and the company’s other 20-something technophiles lack the experience and credibility to turn the site into a profitable, publicly traded company.

On Thursday in San Francisco, Zuckerberg – who sported a fleece jacket, baggy jeans and flip-flops – seemed well aware of the challenges ahead. Technical gaffes dogged his nearly hour-long speech, and he broke out in a visible sweat.

”We’re the sixth most trafficked site in the U.S. and we can’t seem to get our act together,” Zuckerberg joked as he fumbled to synchronize his presentation slides, which were in disarray.

After laughs from the crowd, he regained his composure and added, ”We recently passed eBay in traffic and we’re working on passing Google, too.”

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