Facebook founder and CEO Mark Zuckerberg announced that music, TV shows, and books will be the next products integrated into the social network, following in the path of computer games that have been integrated into the online community. Netflix (NASDAQ:NFLX) has recently begun purchasing rights to first-run TV shows and has been in talks with Facebook about ways to integrate social networking tools into their site. Here’s why Netflix keeps winning.
This news is just Zuckerberg’s latest push to beat out Google (NASDAQ:GOOG) for advertisers, Facebook’s chief source of revenue. Facebook generated $2 billion in adjusted earnings this year in large part because of advertisers Coca-Cola Co. (NYSE:KO) and Adidas AG (ETR:ADS).
Zuckerberg’s plans for integration are also intended to compete with platforms like Apple‘s (NASDAQ:AAPL) iTunes, Google‘s television services, and online players like Hulu LLC (NYSE:GE) and the unstoppable Netflix, all doing big business that Zuckerberg hasn’t been able to get a piece of, until now. Facebook made a deal with Warner Bros. (NYSE:TWX) in March to distribute popular films for one-time rental fees through the site.
When Facebook began allowing third-party video game developers to create content for the site in 2007, he essentially created a new industry that fueled the popularity of Facebook, but also created more jobs at other companies and built businesses like the Zynga Game Network Inc., now the largest social-gaming company in the industry, and the second most valuable game developer. For those familiar with the game, Zynga is responsible for Facebook-favorite “Farmville”. The company currently has a market capitalization of $8.2 billion on the SharesPost Inc. private-company exchange, and they are currently planning to file their IPO with the SEC by next week.
Integration of new technologies and media types into the the site makes perfect sense and could be seamlessly integrated into people’s profiles where users often list their favorite movies, TV shows, and music. “Listening to music is something people do with their friends,” Zuckerberg said at the EG8 technology forum in Paris. “Movies, TV, news, books — those types of things are things I think people just naturally do with their friends. I hope we can play a part in enabling those new companies to get built, and companies that are out there producing this great content to become more social.”