I think Facebook is going to make it.  They will not be a flash-in-the-pan like Friendster or MySpace.  They are in it for the long haul.  And I don’t think it is because of any purposeful brilliance of their business plan.

Let’s walk through the logic:

When I was growing up I thought the government had a file on everyone.  I thought they knew everything about us.   I did not know about transaction costs at that time.  After working in corporate America for a while I realized it would take almost as many people as there are in the US to do the work to keep a file on everyone in the US.  In short, it would be an administrative nightmare….and that is just keeping the files updated, not parsing all/any of that data.  That is also assuming people wouldn’t have a privacy/civil liberties fit that the government knew pretty much everything about them.

No doubt the government would like to know everything about you and no doubt such information is exceedingly difficult/sensitive to maintain:  Enter Facebook.

We are doing it for them, complete with correspondence, our friends and their contact information, attached pictures, our location (if using Facebook on a mobile device), what we are doing in real-time, etc.  This is the greatest intelligence database the world has ever known. It would take an army of CIA agents working around the clock to know this much about me…just one person.  We are voluntarily handing over information the government would never be able to collect on its own.

Granted I bet terrorists don’t use Facebook (probably no @terrorism feed update “About to bomb something! LOL! TTYL!”), but their friends/family might.  Or at least the government would like them too. And there is lots of other information the government might want that would be on Facebook:  like people reporting zero income but going to Vegas every weekend; people on SS Disability mowing their lawn, etc.

And that is why the government will promote the use of and support the business of Facebook.  And Facebook will cooperate (government has direct access to everyone on Facebook, whether or not you have friended the government), because there is no better business plan than being a government necessity (ask Amtrack, automakers and the airline industry).

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