Facebook Is On Fire, MySpace May Be Fading.

Facebook is hot. You hear it all over the US and Britain. Corporations may love Second Life, but smart people are pouring into Facebook and it apparently is exploding.

Marc Andreesen, Netscape and Ning co-founder, has a great analysis of why Facebook is the new net platform in his blog. Basically, what’s happened is that on May 24, Facebook launced a set of application programming interfaces (API’s)and services that permit developers to introduce new features and content. Since they people have been pouring in to introduce and register new applications and users of Facebook are adding those applications to their pages.

Andreesen argues what Facebook is doing is far more sophisticated that what MySpace is doing. Once you start using new application on Facebook, it notifies your friends and they can start using it as well. A new application can spread to millions of users very quickly. Perhaps most important, new applications can run ads and sell products and services—and you get to keep all the revenue.

One of the most important pages of the latest Inside Innovation is the INdata page which shows how social media is a fast-moving construct that different demographic groups move through quickly. Just as corporations are discovering Second Life and MySpace, a big chunk of their customers are shifting to Facebook. And the folks at Facebook are rewriting the rules of social media, even as we speak, with their brilliant introduction of a suite of widgets that make it perhaps the most inviting platform out there.

Bottom line, the future of the web may be services, entertainment and information coming to you via your own page rather than you chasing around for each and every thing. The relaunch of the Facebook social networking site may be a quiet revolution in the making.

Before it's here, it's on the Bloomberg Terminal.