In our Addicted to Social Media podcast #44, I mentioned that Facebook could become FaceBank. In this post I go into more detail on a fascinating possibility.
Last week, it was announced that Goldman Sachs will invest $450 million in Facebook in addition to helping the company raise an additional $1.5 billion. This is a massive amount of money that will allow Facebook to do practically anything it wants (as if it couldn’t already). But while the pundits debate what Facebook will do with that money and whether or not it should, will or won’t go public, Facebook could become even more massive and powerful, ultimately evolving into FaceBank.
Could Facebook become FaceBank?
Facebook would certainly need much more than the few billions it’s raising in order to transform itself into a bank. However, if Mark Zuckerberg can successfully compete against companies such as Google (something he’s clearly positioning Facebook to do in both search and advertising) then Facebook would be able to generate the billions in additional revenue per quarter that it would need to back transactions from its 500+ million members.
Indeed, Facebook already has much of the critical infrastructure it needs in order to enable such transactions. Aside from the robust server infrastructure Facebook uses just to run the site, it has Credits, its virtual currency product, and Facebook social plugins such as the Like Button, Like Box and Login Button that are currently being used by at least 2 million websites. With these components already in place, Facebook is very close to being able to offer its users the ability to purchase products and conduct other financial transactions amongst each other using Facebook as the intermediary.
Would Facebook become FaceBank?
Of course, to do this Facebook would have to open itself up to an incredible degree of scrutiny, perhaps in many countries. This is something that Facebook will have to do anyway if it is going to go public, but this is also something that Zuckerberg doesn’t seem interested in doing.
However, in a FaceBank world, Facebook’s current $50 Billion valuation would merely be a drop in the bucket. If Zuckerberg and company could transform Facebook into a FaceBank, it wouldn’t be hard to imagine Facebook surpassing Apple’s $300 Billion valuation, especially if Zuckerberg achieves his goal of having 1 billion members. If this were to happen, in our bubble-based global economy, could a trillion-dollar valuation be far behind? And what would a company that commands such wealth and that knows so much about a significant percentage of the world’s population’s interests, likes and desires ultimately do then?
Let me know what you think in the comments.