Monday, I profiled Tencent, China's largest Internet company. Wednesday, Facebook announced the launch of their location-based app, and I noted that the company is looking more and more like a business, and less like a piece of technology.
In the wake of Facebook's announcement, a Chinese investment banker wrote in with this perspective about the company's new strategy:
The natural analogy [for Facebook] is Tencent. Slow follower as I have called them (though that is entirely unfair since they did do the virtual goods thing earlier and better than most).
The beauty of Goog is that the cash machine was just one machine. FB will need to stack a lot of businesses together. Again, Tencent proves that the most important thing is the user base. Monetization is easy on a sticky base, even if you have to essentially build a myriad of businesses.
It's a good point. If you look at Tencent's business, they began with an IM service, which is a kind of social network. Once they'd built the best network, they started rolling out different products like mobile services, games, virtual goods, and more involved social tools.