SPIEGEL Interview with Investor Alexander Samwer 'Facebook Is Already Light Years Ahead'

With their investment in Facebook, the trio of German entrepreneurs known as the Samwer brothers aim to help the social networking site succeed in Europe. In an interview with SPIEGEL ONLINE, Alexander Samwer explains why he believes Facebook will knock its competitors out of the ring.

The German entrepreneurs known as the Samwer brothers will devote their expertise to making Facebook a success in Europe.

The German entrepreneurs known as the Samwer brothers will devote their expertise to making Facebook a success in Europe.

SPIEGEL ONLINE: You just announced a strategic partnership ...

Alexander Samwer: ... Yes, we invested in Facebook this week -- a very significant investment. This makes us, next to Microsoft in the United States and (Hong Kong billionaire) Li Ka Shing in Asia, Facebook's key partner for its expansion in Europe. We are very proud of this and have great expectations for our investment.


Samwer: Next to Google, Facebook is the most promising and most innovative Internet company. We see an insane amount of potential, both for its international expansion and for the expansion of the platform and its openness to outside developers.

SPIEGEL ONLINE: A "very significant investment." Does that mean that it is of the magnitude of that made by Microsoft, which acquired a 1.6-percent share for $240 million (€161.4 million)?

Samwer: It's not quite of that magnitude. We can't say anything precise about the financial details, because we have a confidentiality agreement with Facebook.

SPIEGEL ONLINE: Is it just about an investment, or are there business discussions, too?

Samwer: Of course, we're confident in the success of our investment. Facebook doesn't really have an open circle of investors. Rather, it selects partners based on their targets for regions of expansion, partners who will accompany it and significantly help it on its path to success. And that's exactly what we intend to do here in Europe -- to join Facebook as it builds up its business, using our network and our experience. Sixty percent of Facebook's existing users already live outside the US.

SPIEGEL ONLINE: A while ago, you made an investment in Germany in StudiVZ, which is very similar to Facebook. Are you going to be competing now with your own child, so to speak?

Samwer: StudiVZ is now owned by the Holtzbrinck Group and not by us. It's open competition between the best ideas, and the best company will be the winner. Facebook has a very strong technical platform and is undergoing a period of momentous growth.

SPIEGEL ONLINE: In Germany, StudiVZ is the uncontested leader. Does Facebook even have a chance? After all, changing platforms can also translate into high social costs for users.

Samwer: We take a very long-term view of the situation. Social networking sites are not a fad; rather, they're almost like the television of the future. People spend a whole lot of time on the sites, they find content that interests them and that helps them make friends and acquaintances. We're already starting to sense a little traction after having opened Facebook up to outside developers. There are more than 7,000 applications, some of which have millions of users and have become attractions in their own right. This system will establish itself in all of the key markets. It's a bit like it is with Microsoft Windows: If the majority of software runs on one operating system, it will establish itself. If a huge community of developers programs applications for Facebook that are so creative that no one can compete with them, then it'll almost be unbeatable.

SPIEGEL ONLINE: Isn't Google launching a counter-initiative?

Samwer: Google launched its own OpenSocial initiative shortly after Facebook opened up its API to developers. So far, though, it hasn't really become a serious competitor.

SPIEGEL ONLINE: One of OpenSocial's partners is also LinkedIn, the business-oriented networking site in which your family also has an investment. Meanwhile, Facebook is becoming more and more like a business-oriented platform. Do you fear you might be competing against yourself?

Samwer: The differentiation is clear. LinkedIn is a clearly defined professional career-building network, in which searching for jobs and recruiting play important roles. Facebook is a social networking site geared toward a broad range of general interests. Of course, some people will make business contacts there, but one is mass-market and the other one is a career-building network. We don't see any significant conflict.

SPIEGEL ONLINE: Is Holtzbrinck, which now owns Facebook clone StudiVZ, making a mistake a mistake by not opening up its platform to outside developers?

Samwer: StudiVZ will surely open itself up, too, or hook up with some other start-up. Given the strength of the creativity it unleashes, there's no real way to avoid it. Facebook is already light years ahead. In the US, there are investment funds exclusively invested in Facebook applications. And the developer has to ask himself, too: Should I make that for the 60 million people who have joined Facebook or for some national network with a fraction of those users?

SPIEGEL ONLINE: What if this who phenomenon turns out to be nothing more than a fad?

Samwer: That it is not. Social networks satisfy several basic human needs: They help people to keep in touch, to set up dates, to chat, to socialize, to meet new people, to learn about new countries and to share common interests. People are watching less and less TV, and they're spending more and more time online. And it's there that the attractiveness of social networking sites is unbeaten -- and where good advertisements can be placed.

SPIEGEL ONLINE: Do you have a Facebook profile?

Samwer: Yes. I studied at Harvard for two years right after Facebook launched, and I learned about it there. I opened my profile at that time. Today it is obviously updated. I saw for myself how it developed. At first it was a local university network, but nowadays far-flung old friends from Hong Kong and Italy are using Facebook to get in touch again.

Interview conducted by Christian Stöcker.


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