The Facebook tweak that killed a billion-dollar industry - Fortune Tech
"Here's where things get interesting. According to PageLever, a firm specializing in Facebook analytics, user engagement with tabs on Facebook Pages is down a staggering 53% since Timeline launched. "Without the option to set a custom tab as the default view, most users will never see a tab again," explains PageLever founder Jeff Widman in an interview with Mashable. "We've heard from several users they didn't even realize tabs still existed with Timeline."
So what? Over the years, countless companies were born to help brands customize the look and feel of those default landing tabs and other tabs on Facebook Pages. And we're not just talking about mom-and-pop design shops. Let me name drop. A good part of the business at Vitrue (acquired by Oracle (ORCL) for $300 million in May), Context Optional (acquired for $50 million in May 2011) and Buddy Media (acquired by Salesforce (CRM) for $689 million in June) is dedicated to customizing those very tabs for corporate and enterprise clients. Just those three companies alone are valued at more than $1 billion.
Now - nearly overnight - a significant piece of their business model has been compromised by a seemingly minor tweak in Facebook's layout (Betabeat's Jessica Roy goesso far as to ask if that's why Buddy Media was so eager to sell)."
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Same thing that happened to Buddy Media, happened to Involver, which Oracle just picked up for next to nothing after Facebook "tweaked" and killed Involver's business model.
The reports of this industry's death are greatly exaggerated.
Social Enterprise vendors have "responsive to change" baked into their DNA. These companies didn't create value by managing page tabs - that would have commoditized near instantly. They created value by helping companies augment their teams and processes to take advantage of a world that moved far faster than they were used to.
No one in social marketing thought for a second that they were building on top of platforms that wouldn't change dramatically over time. The narrative here is popular and certainly timeline was a very important change, but let's be careful not to overstate.
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Tyler, good to know. Thank you for adding this!
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