Facebook Competitive Advantages through its technology platforms and Architecture choices

Facebook operates the largest social network on the planet. It has over a billion users that use the site every month. Its primary strategy is to bring an ever increasing network of people together on its site. It makes money by selling advertisement and payment based services to end users.

Unlike Google whose primary competitive advantage is its search capabilities, Facebook provides the ability to connect among people in a context rich way so as to keep people engaged. Its users provide their friends and families on latest updates on what is happening as well as on sharing experiences with their friends and family.

Last year, I had written a post on FB's customer segmentation, where I mentioned the initial set of stakeholders that Facebook saw itself serving. It included Users, Developers and Marketers. At that point, it was not clear how Facebook's strategy translated to what they were doing on their platforms. A year down and in hindsight, it is becoming clear how Facebook has matched its platform architecture and capabilities to these groups. This allows us to understand Facebook platforms in the following way.

The overall Facebook platform allows the following services:

1. Platform for Sharing Experiences
2. Platforms that Support Developers
3. Platform that allow advertisers to sell and position advertisements
4. Platform that allows developers to leverage the information being captured by all the interactions on the primary experience sharing platform.

Lets understand these platforms a little bit more in detail, to eventually understand how they may perhaps impact future earnings of the organization.

Platforms for Sharing Experiences

Facebook has the following platforms for sharing experiences.

1. Login: A secure way for people to log into an application or website.
2. Share: Allowing users in third party application to post to Facebook from within the application.
3. Games: Allowing users to share their successes within a game with their Facebook friends and allow game developers to collect game statistics from users.

Platforms that Support Developers

To ensure that Developers are enticed to embellish their applications with Facebook features, Facebook has built some products that allow developers to build applications more easily. These include:

4. Payments: Allow app developers to collect payments online.
5. Parse: Allow app developers to develop applications that work across platforms and collect usage data
6. Ads for Apps: Allow App Developers to promote their applications on Facebook
7. Platform SDKs: These are Software Development Kits that allow developers to access Facebook APIs within different software development platforms.

Platforms that allow Advertisers to Sell and Position Advertisements

Since the bulk of revenue for Facebook is coming from advertisements, Facebook has the following capabilities for selling advertisements.

8. Primary platform: This platform allows advertisers to create their advertisements and place their bids for running advertisements or running campaigns.
9. Ads API: This platform allows advertisers to change their campaigns and other capabilities programmatically.

Platforms that allow Developers to Mine Information and Build new applications

10. Graph API: Graph API the primary API that allows users to insert information into the narrative for a user. Graph API also has a targeted search that exposes aspects of a user's private storyline to advertisers for positioning advertisements.

The above at a high level reflect my understanding of Facebook's platforms and components. The next step would be to figure how all of this supports the strategy and future cash flows for Facebook.