While I think Facebook will ultimately die, it can do several things to make its time on Earth more pleasant and profitable.
Evolution is a double-edged sword. On one hand, you must innovate or die (bicycle company Specialized rarely gets credit for using that phrase). On the other, evolving for innovation's sake or, worse yet, evolving because you're not really exactly sure what you are in the first place, portends problems.
I do not propose cosmetic changes to Facebook. Or the addition of features that redirect the user experience, such as the controversial timeline. At least on the desktop, Facebook should have never veered too far from its original incarnation.Instead, I suggest strategic shifts, some of which are already in place. 1. Focus on being a destination for entertainment, such as gaming, fantasy sports pools, photo sharing and such. Stop trying to do the things Twitter does so well. Facebook cannot succeed, long-term, as a competitor to Twitter in areas such as news, information and casual networking. 2. Abandon news-sharing partnerships with Yahoo! (YHOO) and The Washington Post (WPO). Again, Twitter already performs this function -- quite well and mostly on an informal basis. Trying to link Yahoo! and WaPo accounts with the reader's Facebook account only annoys users and perpetuates privacy concerns. 3. Crush the competition. Stop buying it. I can see the sense in the Instagram acquisition. Here's a company that not only burst onto, but dominated the photo-sharing scene. Facebook pulled a competitive block. That however needs to be the exception. If you want talent, hire a headhunter and poach it. The notion of buying an entire company for its creative staff smacks of a poor use of cash to me. 4. Don't make hardware. You're not Amazon.com (AMZN). And you have no viable reason to make it look like you're competing with Apple (AAPL). Jeff Bezos conceived Kindle Fire as a way to drive sales and bring more people into the Amazon ecosystem. We now know that was an achievable goal. It had nothing to do with competing with any other hardware maker, particularly Apple.
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