The Valley is still buzzing from yesterday’s news (TechCrunch broke it, before Facebook confirmed it) that Facebook acquired FriendFeed. Although financial terms of the deal were not disclosed, folks are speculating that the price tag was around $50 million.
While it would seem logical to contribute the acquisition to Facebook’s desire to replicate Twitter’s functionality – the real story is the bigger battle that is heating up between Facebook and Google.
From Robert Scoble, the #1 FriendFeed user according to FriendFeed co-founder Paul Buchheit:
This is Facebook firing a shot at Google, not at Twitter. Twitter is mere collateral damage but Facebook knows the real money in real time is in search. FriendFeed has real time search. Google does not (although it’s bootstrapping there very fast, some of my FriendFeed items are showing up in Google within seconds now). Facebook has 300 million users. FriendFeed and Twitter do not. Google has Wave coming, along with some other things this fall and that forced a shotgun marriage between FriendFeed and Facebook.
As Facebook continues its rapid innovation (for any product for this scale, in history, in ANY industry, they make more changes more rapidly than anybody ever has), the second acquisition in the company’s history made logical sense. From all accounts, FriendFeed’s team of 12 is one of the strongest (for its size) in the Valley and they will all be joining Facebook’s Palo Alto offices (likely on the platform team).
From Facebook’s release:
“Since I first tried FriendFeed, I’ve admired their team for creating such a simple and elegant service for people to share information,” said Mark Zuckerberg, Facebook founder and CEO. “As this shows, our culture continues to make Facebook a place where the best engineers come to build things quickly that lots of people will use.”
With these additions Facebook’s quest for real-time search may have a driver. It probably wasn’t a coincidence that Akhil Wable of Facebook announced improved Facebook search functions last night on Facebook’s blog, while using the FriendFeed announcement as an example of these new functions.
FriendFeed, appears to share the same aspirations, although they’d rather talk about open, innovative communication’s platforms for the time being. Their service will remain open to its users, but their founders were very clear to note that this is for the “time being.” The engineering team will likely be working on bigger things than the FriendFeed platform.
FriendFeed’s growth has been flat over the summer, and although they have not disclosed actual users (Likely around 100,000) , their unique traffic has been stuck around 1 million for the last several months. Running into these issues with scaling may have opened the eyes of their founders to the opportunity to work with Facebook’s 250 million + users.
It’s also something the industry should look closely at when considering the future path of Twitter and its ability to scale. Even investors in Twitter have been heard saying that it may never scale close to the size of Facebook. However, they also note in passing that it could be as valuable as Facebook, in the sense of providing a valuable service to a smaller user-base (think Craigslist).
This post first appeared on FastCompany.com.