Monday, February 22, 2010

Facebook buys Malaysian startup Octazen

Sunday, 21 February 2010 13:11 THE world's biggest social networking site Facebook has just acquired a small Malaysian-based technology company in a secretive deal that has the Web buzzing.

Many industry watchers were taken by surprise when the news broke Saturday that relatively unknown Malaysian startup Octazen Solutions suddenly came into the spotlight with this takeover. The acquisition price was not disclosed.

According to Facebook spokesman Larry Yu, the buyout was a "talent acquisition" which also roped in Octazen's two engineers to work with Facebook.

Seeing synergyoctazen

Yu was reported as saying: "We've admired the engineering team's efforts for some time now and this is part of our ongoing effort to add experienced, accomplished technical talent to help drive the company forward in its effort to be the central way for people to connect and share information."

With immediate effect, Octazen Solutions announced on its site that the company "will no longer accept new service contracts or renew existing service contracts, and will enter a transition period to wind down operations."

Unlike search giant Google, the Palo Alto-based social networking company rarely acquires other companies. This is only its third acquisition following the buyout of Parakey and FriendFeed.

Startup company Parakey, a Web-based computer user interface described as "a Web operating system that can do everything an OS can do", was the first acquisition by Facebook, while FriendFeed is a real-time feed aggregator that consolidates the updates from social media and social networking sites.

The question being asked is: What kind of business is Octazen Solutions involved in?, a website that calls itself the unofficial Facebook resource, pointed out on its site Saturday that Facebook has been working with Octazen for an unknown period of time.

Contact importer

Back in October 2009,'s writer Nick O'Neill had highlighted the importance of Facebook's contact importer, the product that encourages new social networking users to use in order to see which of their friends are also on the same site.

O'Neill had given the skinny on Facebook's viral growth and revealed how the company was able to continuously attract new users. The secret was a software tool called the contact importer.

Writing on his site, O'Neill explained that Facebook has managed to be so effective at growing because the company uses a contact importer that enable users to import all of their contacts via email.

He wrote: "It’s become the standard tool for instantaneous growth, however, many companies fail to get it right.

"Facebook, however, has mastered the art of the 'viral loop' and there is a lot to be learned from the company’s success."

The fact that Facebook has experienced explosive growth for the past few years was nailed down to this particular tool which founder Mark Zuckerberg had said was "the primary source of growth" for its social network.

Adding more value

As Facebook continues to consolidate its dominant position, market analysts noted that Zuckerberg's company is seeking value in social media in order to further enhance its site offerings and better serve its users.

While many other startups have taken note of the extremely effective Facebook model, very few have succeeded in duplicating it in an effective way.

According to O'Neill, the other social Web force, Twitter, has also used the contact importer and came closest to the Facebook model, resulting in massive growth for the 140-character social site in less that two years.

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