Facebook Chief Operating Officer Sheryl Sandberg spoke to the American Magazine Conference yesterday about the business model (or lack thereof) of Facebook. As one would expect, she led with her A game, detailing a joint promotion with MTV that had results that "were really positive," though the article doesn't say if she cited any numbers or talked any level of specifics (nor, if you read the description, does it sound like something that would scale up easily without creating massive amounts of spammy goodness in your Facebook feed).
That out of the way, there wasn't much left for Sandberg to spin:
"We need to find a new model and new metrics," she added.
Which is really about as sad a way of saying "nothing's quite working" as I can imagine.
It's a problem that's plagued social networks from the start: You get a ton of users, but there's no real way of flipping them into dollars. Traditional advertising gets no traction, and attempts at sticking advertising too completely into people's social space--attempts like Facebook's own aborted Beacon--have pushed far too hard on the creep-meter.
It's the age old Silicon Valley conundrum: All dolled up with nowhere to go, and no business plan to guide you. One imagines that the current economy isn't going to help them out much either. Facebook is already on tap to lose $150 million this year (and that's old numbers now). What does next year hold?
I suppose, ultimately, it doesn't matter when your valuation is $15 billion, and Microsoft has your back (they awkwardly integrated Microsoft web search into the site just this week), but still--do you think Facebook execs occasionally wake up at night with cold sweats, worrying that perhaps they've built their house upon rapidly disappearing sand?
Nah, me neither.