1. There is a definite barrier to entry. Yes, the technology is replicable, but speed is the competitive advantage on the web – and critical mass is achieved by getting millions of people wrapped up in their functionality to a point that makes it impossible or at least unlikely to switch. The people who use Facebook are religious about it and are building up connections, affiliations and content. What’s also interesting about Facebook is that people are constantly updated and drawn back into the community (people I observed use it almost as much as email).

2. They don’t have a magic bullet right now, but that’s OK. Lots of sites build up traffic and then figure out interesting ways to monetize that traffic. It sounds very 1999, but that’s actually working these days given the critical mass of the web.

I think you have every right to remain skeptical until they show you something really big. But I do believe that indispensible tools (like Google) have big monetization potential, and in the web game I don’t think you need the big pockets of News Corp to exploit them.

I agree that in the end, social networks are soon to become very accessible to very specific markets and I personally think that is fairly exciting.

Thanks for the post.

(1) History. We have seen so many search engines die in the path to Google (Inktomi, Alta Vista, etc.). To be sure, Google has the edge NOW, but disruptive changes in hardware and algorithms do happen.

(2) Google’s behavior. If they really had a barrier to entry on Search, they wouldn’t have to be scrambling to do so much more (building their own private internet; introducing new products such as GMail, Google Spreadsheets, etc., etc., etc.). There is probably some fear of repeating the mistakes of the past in the Google upper echelons. I wish them luck, but history tells us that it is incredibly difficult to keep the advantage.

The same could be said of the social networking sites. Facebook users may seem loyal, but let me say one word: Friendster. The speed at which an entire community jumped off to find a new tool was remarkable. It will happen again.

This, then, is a huge risk for Jobster, both in terms of their general business plan (they have no barrier to entry for their competitors, either, and they obviously can’t execute, which is what can differentiate companies that all provide the same service), and in their partnering. If Jobster really wants to make money, the smartest thing Jobster could do right now would be to lay off another 60 people. Honestly, it only takes a few engineers to run a software product with so few users. Go ask Craigslist.