What Would a Facebook Collaboration With Apple Look Like? It Almost Happened...

How would Facebook be different today if its social operating system was built into Apple's OS X? The two companies spent a lot of time collaborating early on. But, as Facebook's senior platform manager and former Apple employee Dave Morin tells it, there was resistance within Apple to "the idea that social is even something a computer can do." Morin's tale, recorded at Fast Company's Most Creative People conference in June, offers excellent insight into how Facebook figured out how to make its plan successful even as other companies failed to see its potential.

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5 Comments

  • Freddy Nager

    @Daniel A: What are your sources?

    Here's what I found in TechCrunch on March 27: "eMarketer projects Facebook revenues of $230 million in 2009. Our sources say this is way low, and that Facebook will hit at least $300 million in 2009 revenues. But the costs of running this ginormous company are staggering. Facebook may be burning though $20 million or more per month, even on top of revenues."

    Note the last clause: even on top of revenues. In other words, TechCrunch sees Facebook as possibly losing $240 million per year.

  • Danny Aranda

    @Freddy - Facebook is profitable and will be more profitable than Apple in the very near future. Facebook is projecting ~$550 million in revenue in 2009 and has been EBITDA profitable for 5 quarters. They will be cash flow positive by the end of 2010 (this is due to their massive amount of capital expenditures on servers to house what is now the largest repository of photos ever).

    Apple is a well scaled, mature company. Their profit margin is around 20%. Facebook apparently had profit margins of 17% last year after only 4 years of operation (Rev: $350mm; EBITDA: $50mm). They'll probably have a better margin this year.

    These are impressive results.

    There's a misconception that Facebook can't "monetize". I agree that revenue models for social media products are still evolving. But make no mistake. These companies are already making cake.

  • NoahRobischon

    @Freddy But I do think Facebook will figure out how to monetize itself. This could turn out to be a huge missed opportunity for Apple.

  • Freddy Nager

    I was recently at a conference where a speaker said that "Facebook looks like a social network designed by Apple, while MySpace looks like it was designed by Microsoft." At least in terms of Facebook, he was closer to the truth than he realized.

    Of course, let's remember the one core distinction between Apple and Facebook: Apple is profitable. I'm just speculating here, but revenue potential could have been the reason why Steve Jobs decided to focus his resources elsewhere.