Tonight, Charlie Rose airs his interview with Facebook’s Mark Zuckerberg and Sheryl Sandberg.It’s got a lot of interesting bits in it, but one of the most revealing parts is where the two execs talk about how Facebook is not going to make games.
The reason: Facebook wants to be a platform company. The only way to become a platform company is by building the best possible platform to do one thing — in the case of Facebook, to connect people. As soon as you lose focus and start moving in 100 directions at once, the platform starts to suffer.
This is the classic Microsoft playbook, as we wrote a couple months ago.
But that only works for so long. As Microsoft learned, once a platform reaches a certain size, it’s very hard to keep it growing. So the only way to keep growing as a company is to move into adjacent markets, which usually means building apps on top of the very successful platform you’ve created.
Case in point: Windows and Office.
Facebook is probably years away from the saturation point for its platform — it may have more than 800 million users, but it’s not earning much money per user yet.
But at some point, it’s going to see revenue per user start to plateau. And then, Facebook is going to have to start moving into other markets.
Here’s the relevant bit from the transcript:
Mark Zuckerberg: One thing that we haven’t talked about at all here are games, right. I mean, games is probably the biggest industry today that has gone really social, right. I mean, the incumbent game companies are really being disrupted and are quickly trying to become social. And you have companies like Zynga.
Charlie Rose: Yeah, well –
Mark Zuckerberg: – which are going public soon and will be valued at most likely at multibillion dollar valuations. And basically all of their games are built on top of Facebook for the most part.
Charlie Rose: Exactly.
Mark Zuckerberg: And a huge number of other companies as well. So I mean, does Facebook build any games? No. We build no games.
Charlie Rose: You say that today –
Mark Zuckerberg: No, we –
Charlie Rose: You say that today.
Mark Zuckerberg: Actually –
Sheryl Sandberg: I’m pretty sure we’re not going to –
Mark Zuckerberg: No, I’m pretty sure we’re not going to build any games.
Sheryl Sandberg: [unintelligible] we’re not going to build games.
Mark Zuckerberg: We build –
Charlie Rose: Well, why are you so sure?
Mark Zuckerberg: Here’s why. Here’s why.
Charlie Rose: I’m only saying this because people thought that Steve Jobs –
Mark Zuckerberg: I’ll tell you why.
Charlie Rose: – would never go into retail, and he did.
Mark Zuckerberg: I’ll tell you why.
Charlie Rose: All right.
Mark Zuckerberg: Because building games is really hard. And so that’s –
Charlie Rose: So that’s the only reason.
Mark Zuckerberg: And we’re doing — what we’re doing is really hard. And we think that we’re better off focusing on this piece. I think that building a great game service is really hard. Building a great music service is really hard. Building a great movie service is really hard. And we just believe that an independent entrepreneur will always beat a division of a big company which is why we think that the strategy of these other companies trying to do everything themselves will inevitably be less successful than an ecosystem where you have someone like Facebook trying to build the core product to help people connect and then independent great companies that are only focused on one or two things doing those things really well.
Sheryl Sandberg: And those companies can’t — don’t have the discipline to do it, right. They get big, and everyone wants to do everything, and they just say yes. And then they don’t do everything well.