Facebook: The Media Company That Could Have Been

BIIgnition.pngNEW YORK -- In mid-April, Facebook launched a Facebook + Media initiative focused on helping news, television and music partners "drive referral traffic, increase engagement, and deepen user insights on your site," presumably with the intent of closely integrating Facebook with existing media properties and extending the reach of the already monstrous social network.

But is Facebook just an accessory for media companies, or a media company in itself? At Business Insider's IGNITION conference, David Kirkpatrick -- author of The Facebook Effect -- talked with Wendy Harris Millard of MediaLink LLC and Mike Lazerow of Buddy Media about Facebook's odd evolution.

The real question at hand is whether Facebook really is a media company -- that is, a company that produces and distributes attention-grabbing nuggets of content and makes money on them, to paraphrase Business Insider's Henry Blodget.

By this definition, the answer is yes. "Facebook is a media company fueled by technology. All of Facebook's revenue comes from media and ad revenue, hinged primarily on its role as an extraordinary possibility for consumers to talk to each other," Millard said. "Dating site, shopping, ecommerce, etc.... Facebook can do all of it. They can grab a foothold in a lot of the industries, from media to commerce to politics, by distributing content and hearing back. If you can reach more than 500 million people and you don't do so, it's grossly negligent as a business."

At the same time, Facebook doesn't necessarily produce its own content. Sure, Facebook can provide a space for commerce and branding services for every company from News Corp to your local drycleaners, but it's hard to conceive of Facebook producing something rather than facilitating its production. "Facebook doesn't want to own each individual application like Yahoo does with Yahoo Sports and Yahoo Finance," Lazerow said. "So what's the product that it can monetize? Facebook has hit on an underlying human need that people didn't see before Mark [Zuckerberg], and that's the real need to share and connect. AOL Chat and MySpace was anonymous. Facebook said 'you are who you are' and built itself around that."

Perhaps that's because Facebook is a media company that's not trying to be a media company. It's more of a media infrastructure company; Facebook builds roads, pit stops, forums and other spaces on the Web that have become essential for virtually every business on the planet to reach its desired audience. But with the social network's ubiquity, it's as permanent a destination for content as CNN, Amazon or the iTunes store. Even Google -- the "one trick company that pulled off the biggest trick in history," as Lazerow put it -- has trouble diversifying. "When I go to Google, I'm in and out as fast as possible," Millard said. "With Facebook, we're more inclined to stay and look around."

With its reach and influence, Facebook could move into producing original content but probably won't. Why? "Facebook doesn't see itself as a media company," Millard said. "Being based in Silicon Valley, you think of yourself as a tech company. If they were founded and based in New York, which is still the media capital of the universe, they'd probably be a totally different company today."

More from Business Insider's IGNITION: Future of Media conference:

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Jared Keller is a journalist based in New York. He has written for Bloomberg Businessweek, Pacific Standard, and Al Jazeera America, and is a former associate editor for The Atlantic.

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