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Facebook Builds a Moat

You can build a feature like this, in other words, but creating value from it requires training people to use it, and getting people to sign up for it. That will follow what I call "Moore's Law of Training," which states that there is no Moore's Law of Training. People learn, in other words, only as fast as they learn. They adapt to new things only as fast as they adapt, and everyone does so at different rates.

So what happens now? People who love Facebook are going to love KGS. People who don't love Facebook won't get as much from it. This separates the Facebook lovers from other users, in terms of the value they get from the service, so Facebook's numbers are bound to get more honest.

As with everything else, social is moving into its consolidation phase. There will be far fewer social networking companies at the end of this year than there are now, and the venture capital window has long since closed. Facebook is going to be one of those survivors. How much is that worth to you?

At the time of publication, the author was long GOOG and MSFT.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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