Facebook Inc (NASDAQ:FB) is the new AOL, Inc. (NYSE:AOL), The Verge co-founder Nilay Patel argues in an opinion piece.
Central to Patel’s thesis that Facebook Inc (NASDAQ:FB) has become the AOL, Inc. (NYSE:AOL) of this day is the fact that the world’s largest social media platform has become the main portal through which people get access to and experience the Internet.
“Facebook is the beginning and the end of the internet for a huge number of normal people, a combination of primary service provider (user profiles, messaging, photo sharing) and 90s-style portal to the wider web,” he writes.
Furthermore, Facebook Inc (NASDAQ:FB) has its own instant messaging platform through Messenger. In its day, AOL, Inc. (NYSE:AOL) also had its users communicating through Instant Messenger.
The similarities between Facebook Inc (NASDAQ:FB) and AOL, Inc. (NYSE:AOL) when it comes to messaging platforms also extend to their acquisitions. The social media company has bought WhatsApp to capture a more international audience. AOL once bought ICQ.
Patel also says that Facebook has an apocalypse-proof way of making money. Just like AOL has its dial-up business which surprisingly is still profitable to this day, Facebook also has its ad-selling operations.
“[Facebook] will continue minting money for as long as the parents and grandparents of the world start their day with Facebook, and it will stop growing the second all of their kids move on to something better,” Patel writes.
That second part of the argument may seem to be a long way away but there have been countless companies which have risen and fallen. Unless, of course, if Facebook continually finds a way to reinvent itself and remain relevant, or make a comeback.
According to Patel, Facebook is now also pitching itself as the savior of media companies, a pitch which was also made once by AOL. What remains to be seen now is whether Facebook will buy its very own media company, he adds.
Karthik Sarma’s SRS Investment Management owned 5 million Facebook Inc (NASDAQ:FB) shares by the end of the September quarter. Jean-Marie Eveillard’s First Eagle Investment Management owned about 2.29 million AOL, Inc. (NYSE:AOL) shares also by the end of the third quarter.