Facebook’s path toward complete world domination is filled with peaks and valleys. Mark Zuckerberg and his team make decisions on how to run their business that thrill and terrify in equal measure. The 2010 introduction of Facebook Credits, a virtual currency purchased with cash and used to buy services and goods in the social network from movie rentals to Farmville items, has proven extremely lucrative for the company. Meanwhile, other choices like the network’s latest redesign have given users and analysts pause. Of the many announcements made during this week’s f8 developer’s conference, the only people that should be concerned are the company’s rivals.
Here are three of Facebook’s new initiatives and the companies that will be impacted by the network’s evolving business:
The announcement that Netflix (NASDAQ:NFLX) has entered into a partnership with Facebook could not have come at a better time for the company or its shareholders, who still are feeling the burn of the streaming video company’s meltdown. Although Facebook integration into Netflix is only available in Canada and Latin America at this point, it will be coming to the U.S. as soon as the company finds a way around a law preventing U.S. members from sharing what they watch.
As Facebook has ramped up its own video rental services, it looked as though the network would be competing with Netflix, but their partnership creates a unified front against other streaming competitors. In particular, Dish Network’s (NASDAQ:DISH) new Blockbuster streaming service, Amazon’s (NASDAQ:AMZN) Amazon Prime streaming video, and the News Corp. (NASDAQ:NWS), Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA)-owned Hulu should all prepare for Netflix to recover some of its lost ground thanks to the support of Facebook’s 750 million users.Spotify
The U.K.-based streaming music Spotify isn’t the only Internet radio company Facebook announced a partnership with at f8. The company also is teaming up with MOG, Rdio, Slacker and iHeartRadio to make for a unified front of web music services on Facebook users’ profiles. The service undoubtedly is going to cause trouble for the already embattled Pandora (NYSE:P), but that’s hardly the only publicly traded company in the music business that potentially will lose business to Facebook and its partners.
Amazon and Apple (NASDAQ:AAPL) are just two of the companies trying to transform their download-based digital music businesses into cloud-based services this year (through Amazon Cloud Player and iTunes Match/iCloud, respectively.) With Facebook heavily promoting streaming services, these bigger companies will have to work even harder to promote their new wares.Facebook News
Facebook announced partnerships with News Corp., The Washington Post Co. (NYSE:WPO) and Yahoo (NASDAQ:YHOO) that will go a long way toward transforming how news is consumed through Facebook. The social network no longer will act as a jumbled series of links to stories posted on user profiles, but a wide-ranging news aggregator providing articles through new pages on the network and mobile apps. These include the Washington Post’s Social Reader app, Yahoo’s Into Now app (which previously focused on television rather than news), and News Corp.’s previously iPad-only The Daily digital paper.
These partnerships should help YHOO and WPO a great deal by bringing in new prospective audience members. These partnerships are bad news for other major news aggregators, particularly Google (NASDAQ:GOOG). Facebook already is cutting heavily into Google’s display advertising revenue, and lost viewership at Google News will only exacerbate the problem.