[dillydally]

You're wrong and I'm happy to bet against you.

Proof points: 1. Tencent QQ is a Chinese social network for games. It's essentially Facebook+Zynga combined. Many of the top games on Facebook are ports of popular Chinese games, e.g., the farming genre. Tencent has been around for 12 years and did over $1Bn in revenue in 2009, representing a 61% increase in profits.

2. Over 500MM people use Facebook every month. That demand doesn't just disappear. The only way Facebook is going to lose is if someone comes along and gives people something better to do with their time.

3. Facebook has their pick of engineering talent in Silicon Valley. If you're an engineer looking ad a mid-sized startup, Facebook is the best place to work, hands down. Look at their open source projects (e.g., Cassandra.). How about their PHP compiler? Or their numerous patches to memcache? It's clearly an engineering-driven company.

4. Just because you think something is frivolous doesn't mean it isn't valuable. Was Atari frivolous? Electronic Arts? EA, obviously, is still around and immensely profitable. Moreover, the same VC that backed those companies also backed Apple, Oracle, and NVIDIA.

There are plenty of startups working on problems lower on the stack. One can innovate at any level -- why is Minecraft any less valuable than a video game that pushes the limits of modern 3D algorithms?

Was Facebook less innovative than PayPal? Oracle?

Personally, I think the attitude you show in your response is a defense mechanism. You feel like you're somehow "above" Facebook and therefore their success isn't valid.

[prodigal_erik]

At 1400 employees and four international headquarters, is Facebook really considered a mid-sized startup? To me that phrase evokes a few dozen people who took a sublet last year....

[anigbrowl]

I don't want to trash any particular company. The thing about simple and obvious business models which satisfy a basic need is that they're easy to replicate. My view is that every so often one company hits on a mix of utility and accessibility that satisfies enough people's needs well enough that the firm becomes a giant of the industry...arguably, it becomes an industry unto itself, so well-known and well-liked that an entire ecosystem grows up around serving the needs of its users.

But the the frontier expands, and the very high integration which formerly proved such a huge advantage is now a source of inertia.

How many of us here have signed onto CompuServe or AOL lately? How many competitors did they leave dying in the dirt? They linger on, but as strange undead shadows of themselves. Apparently a few people are still willing to pay $199/year to sustain that pioneer feeling, but I doubt I'm missing anything: http://webcenters.netscape.compuserve.com/menu/