After failing in their US$47.5-billion bid for Yahoo, the giant Microsoft is looking more closely at Facebook. While the Wall Street Journal reported that Microsoft bankers have begun to look into a Facebook purchase, neither side has commented on the story (a sure sign that something is afoot).

Facebook in itself is a giant… one that could make Yahoo blush one day. With more than 70 million active users its value was pegged at US$15-billion last October when Microsoft bought a minority stake for a mere US$240-million.

What makes Facebook an even greater value than its investment price a mere 8 months ago is its growing popularity – and growing platform. There are only 7 websites on the planet that receive more monthly traffic than Facebook – and Facebook only opened to the public 18 months ago after starting as a college only niche. Of the sites that get more traffic (Yahoo is 1st, Google 2nd, YouTube is 3rd), Microsoft’s flagship portal sits in fifth (according to the industry benchmark, Alexa.com). Its viral power is far stronger than MySpace (notwithstanding the music scene), and its growing at a faster clip. I don’t know of anyone that uses MySpace, and yet virtually everyone I know under the age of 45 has a Facebook account. According to ZincResearch.com, 90% of Canadians between the ages of 18 and 34 are Facebook members (9 million).

Of perhaps greater interest is the ever-expanding “Facebook Platform” and its potential as a platform service inside the corporation (for example, intranet platform). Facebook Platform is the place where all of those creative nerds build and add those cute little applications that are optional add ons to your Facebook profile. Popular applications include “Fun Wall” (2.5 million active users), “Scrabulous” and that dam vampire biting ‘game’.

All of these are nice, viral tools with little or no business value (more than 23,000 have been created in one short year of existence), but the platform has the opportunity to be expanded to host “intranet” type functionality and collaboration tools. Create an invite-only Facebook site, sprinkle in some applications and voila – you have the semblance of a corporate intranet. Of course, I said “semblance.”

According to Facebook, some 1000 business applications have been created. One application, Feedheads, allows the users to “share the feed items you like with your different friends and networks while also displaying your shared items on your profile.” It also works with Google Reader and NewsGator. So, in other words, think of the collaborative calendar offered by Lotus Notes (or Outlook) where the user can see the schedules of others. Feedheads allows you to see a lot more than their schedule depending on what that user or colleague wants to share (e.g. interesting articles, reports on the competition, meeting reminders, etc.).

Notwithstanding the security challenges of a hosted platform, and those security holes that Facebook has worked feverishly to close (or prevent), the Platform is not a real substitute for the intranet which must feature among other things, federated search, application integration, robust security, etc. (At Prescient Digital Media we’re using it as a networking tool -- feel free to join us on the Facebook community Intranet Global Forum).

“The problem for any business considering Facebook is that it’s a determinedly consumer play, to the extent that I don’t think it can ever seriously fly in the enterprise,” says analyst and ZDnet writer Phil Wainewright. “Facebook trades free functionality in return for attention and relationship data — and users give up a lot of their control over that data. Businesses aren’t willing to make that trade-off.

Google is far ahead of Facebook in this respect with the Google App Engine (Google Gadgets), and already has made impressive inroads in the enterprise software business with the Google Mini and Google Enterprise Search. And now you can see why Microsoft is particularly interested in Facebook (more than just acquiring those eyeballs).

The Facebook Platform is not a legitimate enterprise or intranet platform… yet. But it’s only a year old and continuing to evolve; don’t think for a second that Facebook’s management isn’t looking at your business and the revenue potential of becoming the host of collaborative employee applications – or the entire intranet. Microsoft knows it too, and wants a bigger slice of that multi-billion dollar pie.

It was great to read Toby's informative post about Facebook. We recently joined the wonderful world of Facebook as an instititution through the creation of a Colgate University page.

This easy-to-create and administer page was a way for us to have a presence on Facebook without imposing ourselves on students who don't want to be bothered in that space. Anyone and everyone can become a "fan" of the page. We have 107 fans as of this minute, and we've done next to nothing to promote the page since launching it about three weeks ago.

Has anyone used Box.net before? I used it for the first time the other day. It's an online storage and collaborative space that allows you to upload photos and files. We used it the other day to work with a vendor on a Flash e-mail. The vendor created a shared space and I was able to upload photos and a Flash file so they could work on them.

Pretty interesting. I don't know if others have played around with it or are using something similar. The "lite' version of Box.net is free, and there are different levels of capacity at different montly cost levels after that.

We struggle sometimes when working with vendors on sharing large documents. This seems to be one solution.

There are a number of reasons why a corporation or a not-for-profit should adopt Web 2.0 or Enterprise 2.0 tools. Enhancing communications and collaboration with customers and employees is the primary, over-arching driver for most. But there’s another more pressing need: snooze or lose.

“You really have no choice,” says Steve Krol, EVP of Professional Services with Lyons Consulting Group, which has worked with the likes of AON, Porsche and even Playboy. “Social media represents a full-fledge media /communication channel that will evolve with or without you. It’s another accepted form of communications that people want.

According to a web survey by the Software Information & Industry Association, only 41% of participants are using social media, but 35% plan to use it. While the survey is not scientifically significant for all organizations in all industries and is biased towards the audience that participated, the numbers are pretty close to the mark. As it relates to large organizations, the numbers echo other recent study findings from CIO and Forrester. However, the adoption numbers are far smaller in small and medium size organizations.