In a typical Silicon Valley speed, Facebook coverage moved from being all glamorous to more realistic coverage that focuses on the challenges ahead. It looks as if the company has matured in a matter of weeks and now needs to deal with the real world problems and not only with the hype.Seth Godin compared Facebook with good old Hotmail. He foresees similar monetization challenges for Facebook, since they never developed a permission asset and a real relationship with their customers. (It is amazing to see that the question of how to monetize a free service is still open, more than 10 years after Hotmail was launched.)

Alas, I am not going to discuss monetization today. I think Facebook has another big challenge for long-term sustainability (and they have $15B to sustain…): it does not solve any real problem for its customer base. Continue reading “Which Problem Is Facebook Solving?” →