Facebook domination in 2 moves

There's a bit in the original film Karate Kid, when Daniel, almost crippled by blows to his leg, assumes the iconic Crane Kick stance and kicks his opponents chin in and knocks him out cold. Brilliant. 

That's basically what Facebook's could do to Google in two really sweet moves. Admittedly, performing those two moves could take a couple of years to pull off, but bear with me for a moment.

Here's the combo:

1. Create a means of logging purchase behaviour - i.e. Operation Become Paypal

2. Create a display ad network to sell advertising on sites outside of Facebook

Right, so. Amazon have this incredible recommendation system because it's based on actual purchase behaviour. Being able to say "People who bought this also bought this" is very powerful because it is based on realbehaviour and people are total liars. It's difficult to give good recommendations based on "People who looked at this also looked at this, a bit", it doesn't quite work. Now, imagine for a moment that Facebook knew what people have bought. They could create some kind of reward scheme like Tesco but that would only work for people who've actually taken up the scheme. They could operate a credit card, but again that's limited. But how about if they were to create something along the lines of PayPal - one-click ordering. A shop could have a "pay by Facebook" link which, like the Like feature, it pays really quickly and easily (annoying security procedures notwithstanding). Shops would totally dig it because people wouldn't be dropping out of cart experiences, and users would dig it because it would be super simple.

Now, once they have purchase data, they can start recommending things people might be likely to buy. They could cut that with the data they have about people's social graph and predict what people might be likely to buy (maybe, probably?).

So, now for the kick.

Facebook then creates or buys up a huge ad network like doubleclick (yes I know Google own doubleclick, I said LIKE doubleclick). They sell ads directly to anyone that wants to buy them. But instead of selecting the kind of people you want to advertise to and buying a number of impressions, you indicate what it is that you're selling and they basically find all the people they think are likely to buy that product, based on a combination of past purchases and their social graph. i.e. "You purchased a Kenwood mixer and some socks. People who buy Kenwood mixers and socks also seem to purchase dressing gowns too."

I'm actually pretty sad about it but I'm coming to the conclusion that Facebook is fast becoming the people's choice of identity online and that it's only a matter of time before Facebook is totally embedded across the web and they're targeting ads at us with disturbing foresight. This is bittersweet.

It's only a theory. Facebook have historically been pretty bad at recommending anything based on what they currently know. And they can't even serve good ads on their own site never mind operate an ad network. Also, they suck at service design, which is what a good payment solution needs.

Thanks to Paul Sims for the Karate Kid addition.