Meet Facebook, the Business

facebookplaces.jpgTonight, Facebook officially announced Places, its location-based competitor to Foursquare. The much-foreshadowed announcement means that you'll be able to use your phone to "check-in" at and share the places you go with your friends.

The general reaction, as with Facebook's new Questions app, seems to be that the company has built a high-quality, low-risk product. For example, the eminent reviewer Walt Mossberg tried out the service and liked it just fine. "I've been testing the new service, and found it easy to use and reliable, with mostly logical privacy controls, an issue on which Facebook has been bruised in the past," Mossberg wrote.

But Questions and Places aren't technologically innovative products. Other companies, Quora and Foursquare respectively, already do what they do. But to focus on that would be to miss the point: what we're watching is Facebook figuring out new ways to monetize its half a billion users. They let the little guys figure out that search-result friendly Q&As and location-based services seem to be good businesses -- and then launch something similar.

Exciting? Maybe not. Effective? Those startups don't have Facebook's 500 million users and proven ability to drive scale and adoption.

If you're one of those people (like myself) who can't understand why you'd want to check in everywhere you go, forget about the nature of this specific product. There's a more interesting structural story here. We've known Facebook the social network, now it's time to get ready for Facebook the business. Facebook employees, even privately, have stuck to the line that they're building the best social network they can and that it isn't about money. Monetizing has been almost a dirty word. (Almost.) I think we're about to see that subtly change.

Remember when Google didn't really focus on the money? "In Google's case, we were really interested in developing our search technology. It wasn't a get-rich-quick thing, and it still isn't," co-founder Sergey Brin said back in 2002. "We're trying to build better and better products and a stronger and stronger company, but you don't see us running around trying to make a buck by IPO-ing or selling the company."

Then, one day, the company started to crank up the Google AdWords money machine, and became the largest Internet company around.

Don't be shocked to see Facebook follow a similar path, if Zuckerberg is lucky.

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