Peer production and its impact

Flickr acquired by Yahoo for anywhere between 30 to 50 Million dollars
YouTube acquired by Google for 1.5 Billion dollars
Facebook received a Billion dollar bid from Yahoo… and 750 million before that from Viacom. Not bad for a 3-yr old startup. By the way, the 23-yr old CEO and his angel investor think it is worth far more. So they did NOT sell!

You either have to have balls of titanium or you have to be nuts to refuse those offers. He is probably both…

So, what is it about the Web 2.0 companies that is pushing these deals into outer space? Are their so called social networks really worth so much? Let’s think about it…

What value does Facebook bring to the table through its “30 million and counting” members? Or does the fact that is it the sixth largest website on the net make any difference (1% of the entire traffic on the web goes to Facebook)? Maybe the loyalty factor adds some value (almost half the members visit Facebook every single day!). Or consider the fact that it is largest photo site (6 million photographs uploaded everyday), even bigger than dedicated photo-sharing sites like Flickr. So, you got millions of connected users forming millions of virtual communities around common grounds and areas of interest… big friggin deal??? YOU BET!!!

You will get an idea of the potential, if you…
- try to quantify the reach of this massive network
- think about the targeted advertising potential of this site
- visualize the buying potential of this motley group of people
- imagine the media penetration achievable through this audience
- think about the possibilities for social research – latest trends, fashion, opinion
- comprehend the power of this lobby, if it were to come together for a cause
- IMAGINE…

No one ever visualized the power of peer production… it just happened… like all other quantum jumps in human progress. This phenomenon that started with the open source movement is now beginning to challenge the very core of proprietary software and thereby reshaping the assumptions behind the traditional way of doing business and making money.

The bigger question being raised here is – is it necessary to have proprietary products or access to limited information to be able to make money? Is collaborative software and peer production ushering the end of software products as we know them?