Why did Facebook win the social networking sweepstakes while hundreds of other websites failed? Numbering among those reasons are timing and the strategy to launch the service through colleges. Facebook also was much faster than rivals like Friendster and MySpace.
But perhaps the key reason for success: Facebook’s user interface. Basically, it has been fairly clean.
Facebook realized there is a powerful need for people to connect with friends. So why not make it as easy as possible? The strategy has been spot-on.
But lately, Facebook has been giving into the temptation of implementing more and more change. For example, this week the company launched another redesign of its user interface. Now the News Feed has a “top story” listing, which is based on some type of algorithm, that’s placed above the chronologically listed “recent stories.” On the right side of the page, you’ll find a ticker that shows the activities of your friends, some of which are repeated from the story sections.
As should be no surprise, there has been an uproar. With 750 million users, it is impossible to please everyone — especially with such intense daily engagement. Still, Facebook needs to be extremely cautious. Numerous cases have shown big sites suffering sharp reductions in user activity because of redesigns, such as with Digg and Netscape.com.
Did Facebook bother to test its redesign? It did. But testing is far from perfect. Just look at Netflix’s (NASDAQ:NFLX) recent changes with its pricing and branding. It’s been a disaster even though the company has some of the world’s best Internet marketing gurus.
It’s true that if Facebook detects unusual problems — and it will quickly — it will make some tweaks. This has happened with prior redesigns. So it seems highly unlikely that there will be a drastic change in the user base.
However, something else broader is at work. During the past few months, Facebook actually has been adding many new offerings, like video chat — based on Microsoft‘s (NASDAQ:MSFT) Skype — as well as facial recognition, improved commenting, a new photo viewer, privacy rules and so on. The company also is encouraging more development of third-party applications and services.
Perhaps such things are the result of the competition from Google’s (NYSE:GOOG) G+ social network or even pressure from LinkedIn (NYSE:LNKD). Whatever the reason, it looks like Facebook’s innovations have not been up to its usual high standards. Consider that the company already has cut back on several recent features, such as Places and its daily-deals service.
In a way, Facebook could be going down the same path that Yahoo (NASDAQ:YHOO) took — that is, adding too many things to the site. The result is an overly complex experience that detracts from the core service. “Hey, do you really know what Yahoo is about?” Unfortunately, users and investors ultimately might ask the same question about Facebook.
Tom Taulli is the author of “All About Short Selling” and “All About Commodities.” You can also find him at Twitter account @ttaulli. He does not own a position in any of the stocks named here.
