Facebook Names Ex-AOL Official Marketing Chief
Social-networking company Facebook Inc. has hired a young Web veteran to fill its top marketing role in a bid to bolster its management ranks and find new ways to make money. — Chamath Palihapitiya, a former executive at Time Warner Inc.'s AOL unit …
Context & Ripple Effects
Facebook enters July 2007 on a run of momentum: its May Platform launch had already drawn analyst claims that Facebook is becoming 'the new AOL' (June 29), comScore logged a flood of new traffic (July 5), and the company confirmed on July 6 that it will build and improve its own search engine rather than lean on existing engines. What it has lacked is management depth to convert that audience into revenue.
Hiring Chamath Palihapitiya — a young Web veteran from Time Warner's AOL unit — as marketing chief lands with an irony the blogosphere noticed immediately: the same week's syndicated commentary ran under 'Maybe Facebook is the new AOL.' The hire pairs the AOL comparison with an actual AOL operator, at the exact moment Facebook is behaving like a portal-era company — walling a platform, building proprietary search, and debating what third-party apps are worth.
First-order effects
- Palihapitiya takes a top marketing role explicitly tasked with bolstering management ranks and finding new ways to make money, arriving just as comScore-confirmed traffic growth gives him inventory to sell.
- His AOL background maps onto Facebook's two confirmed moves — the May Platform launch and the July 6 decision to build its own search engine — putting a portal-style monetization veteran inside a company pursuing portal-style control.
Second-order effects
- App developers, already arguing over what a Facebook app is worth since early July, gain a named executive whose job includes turning platform activity into revenue — sharpening the question of how value splits between Facebook and its developer ecosystem.
- Building proprietary search while hiring for monetization pushes Facebook toward competing for search-ad budgets against established engines, forcing those rivals to weigh social-network traffic as ad inventory.
Third-order effects
- If the pattern holds — platform launch, proprietary search, portal-veteran hires — the 'new AOL' framing stops being a jab and becomes a structural description: consumer web platforms consolidating distribution and monetization behind their own walls.
- The hire signals that the scarce resource in the post-Platform startup world disrupted since late June is operating talent from the last walled-garden era, setting up a talent market where portals supply executives to their would-be successors.
The trend: Consumer web platforms are absorbing portal-era operators and portal-era economics as they turn from destinations into walled-garden ecosystems.