Facebook’s Twiter distraction

This morning Facebook-focused website Inside Facebook posted an extensive interview with Facebook founder Mark Zuckerberg, which is sure to be dissected over the next few days by media and internet analysts everywhere.

There are some real gems here, not least of which is an admission that Facebook is “comfortable” with estimates that the site’s revenue is somewhere between $US1 billion and $US1.1 billion.

“I think it’s really hard to predict this stuff. The biggest driver for revenues and costs for us is the number of users. Last year, we went from 150 to 350 million users – how could you predict that?” Zuckerberg said.

“I think people are getting a better feel for it, but in general I think people underestimate the value of the whole thing.”

That revenue estimate is actually a lot higher than many thought – around $US700 million was the latest forecast – and could hint that the company is moving ever closer to floating, although Zuckerberg has said repeatedly there is no hurry to do so.

But what was particularly interesting was Zuckerberg’s reflections on Twitter, which is probably Facebook’s biggest social media rival and was a site that Facebook once considered acquiring.

While Zuckerberg praised the company – “They do one thing really well – that’s powerful” – he also admitted that he may have spent too much time watching what his rival was doing.

“I looked at their rate and thought if this continues for 12 months or 18 months, then in a year they’re going to be bigger than us. I guess I extrapolated too much from our own experience of what was possible, but it just turned out that that their growth rate was kind of unnatural,” he says.

“Most of the lessons I take away from the whole thing now are that, as good as I think they are, I think I personally just paid too much attention to it… it was interesting because we’re a pretty young company, and we haven’t had that many other companies in our space.

“Learning how you work with other companies is an interesting thing that I’ll hopefully figure out over the next decade, and it was just interesting learning from watching them.”

It’s a fascinating admission, which leads to a question Zuckerberg has probably been asking himself – did I waste time watching Twitter when I should have just focused on my own backyard?

Keeping a close eye on your competition is healthy and smart, but Zuckerberg’s point is that you can lose your focus if you look too hard, particularly when that competitor is being hyped as Twitter was.

It’s a great lesson from an interview worth reading in full.