Upstart Sites Keeping Facebook On Its Toes

After several tries, it looks like Google (Nasdaq: GOOG ) is making some
headway against Facebook. Its Google+ social network has more 40 million users.
But let's face it that still pales in comparison to Facebook's global
dominance, which counts more than 800 million users, half of whom come to the
site every day. In addition, there is still skepticism about the level of
engagement with Google+. Does that mean Facebook impossible to beat? In the
consumer Internet world, a lot can happen. After all, other once seemingly
invincible platforms – like Yahoo (Nasdaq: YHOO ) and MySpace – have seen
quick erosion. Any threat to Facebook is likely to come from an upstart that
offers some unique twist and has a team that is extremely hungry to win. One
worthy candidate is Tumblr, which is a mash-up network of blogging, pictures and
videos. And there's another recent entrant: Pinterest. It's kind of like a
social corkboard. Simply put, you can "pin" pictures through your
browser's toolbar from just about anything, such as weddings, parties,
hobbies, recipes, etc. Then you're friends can comment on them. Or you can
follow the pins of your friends, which can inspire new ideas, such as for
something to cook, or an interesting new product to check out. It's a simple
idea, but it has lots of power. The site is visually appealing, which is
important since it should help Pinterest go beyond the typical early-adopter
hacker community and get traction with the mainstream (70% of its current
audience is female). Site aesthetics have been critical for Facebook's
success. So far, Pinterest has gotten lots of traction. Just in the past five
months, the user base has spiked more than 700%, to more than 3.3 million, and
that's still just on an invitation-only growth model. As a sign of the
site's appeal, major brands have been setting-up their presence on Pinterest.
These include companies like Whole Foods (NYSE: WFM ) and Williams-Sonoma (NYSE:
WSM ). Plus, Pinterest has raised $27 million in venture capital. It's true
that Pinterest is still fairly new and it may ultimately flame out – that's
the norm in the wild world of social networking. But the strong success of
Pinterest does point out that online users are always willing to try something
new – which serves as a warning for Facebook. Tom Taulli runs the
InvestorPlace blog " IPOPlaybook ," a site dedicated to the hottest news and
rumors about initial public offerings. He is also the author of "All About
Short Selling" and "All About Commodities." Follow him on Twitter at
@ttaulli . As of this writing, he did not own a position in any of the
aforementioned stocks.