A good explanation of the Facebook phenomenon.

Facebook is the current hot topic of the Web 2.0 scene. If you were
wondering why it has got so many industry analysts interest (aside
from the lawsuit, take a look at a recent article on
CNN Money.

It’s a long article, but boils down to 3 points:

1 – Facebook allows people to earn money for their hobby applications,
and gives real developers a platform to reach a growing community.
This will attract many developers.

2 – There are two ways to make money. (a) provide a product (or
service) people will pay for. Or (b) gain an audience and market to

3 – You need to understand your audience, what you offer to them, and
what method of monetization makes sense. The sooner in the process
the better.

The article does not mention any possible threats to Facebook, but
there is a big one. There is really no technical reasons that stop
another site offering the same thing they do. The head start Facebook
has means the users are already there which has a very powerful
network effect. This is not anything like complete protection as a shift in
hype, a serious technical outage or a security breach could quickly drive
users away. And there is still no true ‘killer app’ on Facebook yet, even
though Files may be getting close.