The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By Tom Taulli of InvestorPlace.com
ROCKVILLE, MD ( InvestorPlace) -- Facebook is an entertainment destination, with a massive global audience (the latest count: 750 million users). While it has had much success allowing people to communicate, it looks like the company is gearing up for the next step: adding premium movies and music. Move over Rupert Murdoch, get ready for the next media network.
As should be no surprise, Facebook has big ambitions. Keep in mind that the company recently named Netflix (NFLX) CEO Reed Hasting to its board.The company's first move into the media business may be music. Blogger Jeff Rose found that some of the code for the company's new video chat system has hooks to music downloading. Some of the keywords include "MusicDownload" and "vibes." A music service may be a part of a partnership with Spotify, a Swedish music-streaming service which has gotten lots of traction in Europe. One of its key backers is Sean Parker, who was one of the masterminds of Facebook. He was also part of Napster. Related article: Google+ vs. The World - Can Google Beat Facebook? No doubt, a deal with Spotify could be huge. Just look at Zynga -- the company has built an online gaming franchise on Facebook. According to Zynga's latest IPO prospectus, it has generated over $1.5 billion in bookings since its inception in 2007. In fact, the company is expected to generate the same amount in 2011! Interestingly enough, Spotify may enter the U.S. market sometime in July, perhaps even this week. A Facebook-Spotify combination would definitely be a big problem to rivals. One of those rivals is Pandora (P), which recently came public and has already given shareholders a wild ride.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV