We have much to thank Facebook for - it has led the way in training society how to communicate in networked environments and has shone the technology community how to optimize communications technology for engagement. But Facebook has a big issue that is growing more acute with its IPO - its business model is in direct conflict with its networked-based engagement model.
From a business model perspective, Facebook is little more than a copy of existing media models with 68.8% of its revenue coming from text and display ads. This incents them to build functionality that encourages interactivity... but that is largely where it ends. This is highly problematic for organizations that are working to re-invent how marketing and communications is done, using interest and influencers to develop pull for products and services. To change the cost structure of marketing, organizations need to help facilitate communities and with them relationships between community members so that education and information can scale out, through chains of influence. Facebook has no incentive to support this new marketing approach because it directly conflicts with their advertising-based business model. The move by GM to pull Facebook advertising (but not their presence) was fascinating to me for this reason.
I have long had a complaint about Page functionality in this regard - it does little to help a community manager welcome new 'likers', connect people to each other, curate content or carry on a topical conversation over a period of time (there are 3rd party plug-in that do a better job at this). That functionality would really help brands engage in a more involved conversation with their markets and change how they approach marketing. Instead Facebook, through its functionality, encourages brands to treat their Facebook pages as simply smaller channels that are similar to their big channels, albeit with a bit of interactivity.
On the user end, I've noticed the need for revenue growth in my stream, which is increasingly filled with page updates vs. updates from my friends. While there used to be a degree of control over my feed, that control seems to have diminished steadily. This is another huge risk for Facebook and every user will have a tipping point when they feel like Facebook has just become one large advertisement and they start to either visit less and less or they un-like Pages in an attempt to see more of what they really care about.
Finally the biggest risk that Facebook has is their networked engagement model itself. While growing, it provided a huge positive feedback loop that allowed them to grow geometrically and very, very quickly. That same dynamic can turn into a negative feedback loop as users jump ship.
Watching the Facebook story play out has made me wonder whether they really understand the changing business environment in which they themselves helped to create - or whether they do understand it but are now caught in the catch-22 of the innovators dilimma; they had to start with an advertising model because that is what corporate customers understood but now they are so dependent on the advertising model that they cannot get themselves out from under it. Either way they are increasingly treading a fine line between keeping their users engaged and providing real value to corporate clients and there are plenty of traditional corporate clients to help hold them back.