July 18, 2008

Rumors are that FaceBook is developing a payment service and Zuckerberg doesn’t like the idea.

And I agree. It’s a dumb idea that says “me too”. FB gives users no logical value-add by offering payment transaction gateway. Google’s checkout service hasn’t been a blazing success for precisely this reason. But FB has something Google only dreams of having: actionable social graphs @ global scale.

So I present to you FaceBay, a social graph-aware auction service.

Unlike an EBay wannabe, FB already has an established global pool of users - and it’s growing faster than EBay’s users. The fact that FB has unparalleled access to people’s network graphs allows them to sell items with far smarter targeting than EBay does today.

Smarter targeting would result in faster & higher sales - resulting in a win-win for the seller & FB. Most new auction platforms fail due to a skewed buyer-seller ratio. I can’t see FB having a problem with that.

Zuckerberg’s probably thinking it’s going to be difficult building a powerful network graph integrated auction engine with a solid recommendations system. Well, that’s where FB’s BFF Microsoft comes in :).

Microsoft spends waaaay more than FB on research and when it comes to network graphs, auctions & recommendations - they have some of the best people on Earth: Christian Borgs & Jennifer Chayes. They even solve “hard” phase transitions together! ;)

So go on there Zuck, say hello to MS, and see what synergies you can pull-off! I am long on FB, short on Ebay.

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