subject: FaceBook Overtakes Google in Usage [print this page] Facebook overtaking Google in terms of usage appears to be an important milestone and may reflect the credibility of the Facebook platform as an important entertainment destination. While many see strong growth in casual games on Facebook, many see opportunity for vertical and premium content (such as hardcore games and sports games), the mainstay of traditional game developers.
Think Equity believesthat companies with access to quality content and with strong operational expertise for social apps may have higher likelihood to claim stake in this emerging potential opportunity theyare also optimistic for growth in this potential opportunity via higher conversion rates (stemming from emerging payment mechanisms, such as Facebook Credits) and monetization potential from advertising.
KEY POINTS:
According to ComScore, U.S. web users spent more time on Facebook than on all Google sites (including Youtube, gmail, and search) in the month of August (recall that Facebook overtook Yahoo sites in the month of July in terms of usage).
Many believe that Facebook is an emerging opportunity for the traditional games publishers, which is not yet fully capitalized.
While the key factors in the first round of competition for Facebook games were mostly about operational expertise (e.g., building hooks for virality, monetization, and behavior analytics), the key factors in the next round of competition for Facebook Games (in addition to operational expertise of social apps) may be the access to premium content.
While the vertical apps may attract a relatively smaller audience these apps could drive a meaningful revenue opportunity for the game publishers, given higher monetization.
Facebook credits could enhance users propensity to spend on virtual items, given the mobility with a unified currency and that Facebook Credits may be seen as a trusted payment provider by users.
Changes to Facebook platform could ultimately enhance users' experience and make the platform stronger.
While Facebook games currently derive most of its revenue from virtual items, advertising could emerge as another potential growth opportunity.
