Facebook Is Big, and It Could Get Much Bigger

Get ready to rethink Facebook.

Yes it's big, with more than 750 million active users. And people spend a lot of time there; that's why old-school web powerhouses like Yahoo are losing steam while Facebook grows.

And then there's the matter of the IPO: It's arguably the most hotly anticipated offering since Google went public seven years ago.

But is it just an impressive sharing platform? Or is it the next Silicon Valley mega-company?

Facebook will add fuel to the mega-company argument at f8, its annual developer conference that's CEO Mark Zuckerberg's favored platform for huge pronouncements. Previous f8s (pronounced “eff-eight”) have seen the launch of such game-changers as the Facebook platform and the Like button.

The big news this f8? Music and video. Facebook is likely to announce a system that makes it easier for users to automatically let their friends know what song they're listening to, or what video they're watching.

“Our view is that there are probably two megatrends ongoing: social and mobile,” says Daniel Ek, CEO of streaming music startup Spotify, which observers expect to play a role in Facebook's announcement. “Spotify is lucky to be riding on both of those megatrends. Our view is that music is the most social thing there is.”

F8 Facebook Developers Conference 2011
F8 Facebook Developers Conference 2011

If this big shift works, it will turn Facebook into a sort of social broadcast platform. It will help digital media companies offer more free content than they have before, with the potential to upsell users to a premium experience. (See Zynga.)

It could also position Facebook as a rival to Apple's iTunes and Google's YouTube as a hub for digital media consumption. And as Apple showed a decade ago with the introduction of iTunes, once you're at the center of a digital media experience, there are lots of different ways to make money.

“Facebook is the number-one photo sharing site in world, and the second video sharing site in the world behind YouTube,” says John Love, CEO of SpotMixer. That makes its announcements huge events that could help shift digital behavior. “People are getting more comfortable sharing personal media thanks to Facebook.”

A fair question, still, is whether the new features will be enough to justify the valuation Facebook has been commanding in secondary markets—now well north of $60 billion.

Questions? Comments? TechCheck@cnbc.comAnd you can follow Jon Fortt on Twitter @jonfortt