The explosion of social networking commerce will lead to the unlikely candidate of Facebook becoming the world’s biggest bank by the middle of the decade, according to a technology observer and entrepreneur.
People who don’t have a Facebook account should get one or risk having a financial profile created for them says founder and president of Metal International, Ken Rutkowski.
“My Facebook rank is number 29 of all the users and I have raised $100 million in funding for a few different companies,” Rutkowski said.
“Old school media companies have a market capitalisation of $US241.7 billion but the new school media companies are worth $319.7 billion,” he said.
Of the “new school” media companies Google has the largest share with Facebook coming up behind it. Facebook, however, has more ambitions in its sights than just social networking.
“Facebook has 680 million users and that’s massive,” he said. “Who doesn’t have a Facebook profile? Let me tell you why it’s important why you do.”
“Facebook will be the largest bank by 2015. I hear you say ‘how can they be a bank’ what’s going on?”
According to Rutkowski, Facebook credits allow people to play games and Facebook is already doing deals with the banks for credit profiles.
“If you play games on Facebook, which, by the way 40 to 50 per cent of the time spent on Facebook is playing games, and those games – like Farmville and Mafia Wars – are paid for and you have to buy credits for that and they are called Facebook Credits.”
Rutkowski cited the company Zynga that created Farmville as being worth almost $12 billion now and it “didn’t even exist 18 months ago”.
“In China and a lot of the Asian areas right now that is becoming a massive revenue source and that currency is going to start spreading and Facebook is doing deals with banks around the world right now to create an exchange mechanism,” he said.
“Why is its important to have a profile? They are going to start using that to determine what your credit worthiness is.”
“By the way, if you don’t have a profile they will make one for you so it’s better for you to create it and manage it than them. That’s why you want to be selective with what you put on there. If you have kids that are being idiots online make sure you stop them right away as they are creating a pretty negative profile long term and it happens often.”
Rutkowski runs the Founder Institute in Los Angeles which launches about 1000 companies year and prides himself as being the fist person to coin the term “Web 3.0” during a press conference with Google CEO Eric Schmidt.
Rutkowski asked Schmidt what Google was doing with “Web 3.0” and Schmidt replied Web 2.0 was just a marketing term and that he was “the inventor” of Web 3.0.
“If you have a bricks and mortar business or website you have to move people to where you are at. Then you have to manage them, then you have to measure them and then you have to monetize them,” he said.
In an interesting turn of events, Apple, an IT company, now has the most profitable retail business in the world.
“Apple retail stores do $2400 per square metre of floor space compared with Tiffany’s which does $700 per square metre per day,” Rutkowski said.
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