For the most part, Facebook has been a great tool for brands and retailers who want to gain direct access to and interact with their customers, advocates, and fans. Initially, Facebook Groups and Pages were used as a listening/communication platform, enabling businesses to engage their fan base to build trust and rapport, if not to obtain actionable market insights. Very quickly, Facebook was then used as a marketing platform (via Facebook Groups and Pages), a customer service platform, and now, with retail storefronts on Facebook, a sales platform. The impact of Facebook on the online retail landscape is undeniably growing.

The rapid growth in popularity of Facebook among brands and retailers can be easily explained. The idea is simple: every brand and retailer out there wanted to leverage on Facebook’s so-called 500 million active users, who all happen to be in one place and accessible without any direct or incremental financial cost. The free lunch, so to speak, is an illusion, of course. What brands and retailers are not paying for in cold hard cash is paid for in their ceding of control and power. Inevitably, consumers will treat the Facebook Pages of brands and retailers as their online headquarters, their default online presence, since most operations (e.g. sales, offers, discounts, customer care, feedback, etc.) are carried out on Facebook Pages anyway. Furthermore, Facebook offers a “human touch” that most ecommerce websites lack. In other words, the ecommerce website is becoming increasingly irrelevant.

Clearly, this phenomenon gives Facebook a lot of power over brands and retailers, which is exactly the way Mark Zuckerberg likes it. Will Facebook abuse its position? Possibly. Facebook does not need retailers as much as it needs advertisers. The retailers who merely operate Facebook Pages but do not double as advertisers seem to be of less value. With brands and retailers becoming more and more reliant on Facebook for customer acquisition, it also allows for some very good blackmailing opportunities by Facebook, e.g. having to pay to remove competitors' ads on the Facebook page.

With bargaining power on its side, Facebook can also change its Terms of Service unpredictably, creating business consequences of staggering proportions. Facebook, after all, owes no legal obligation to maintain a stable commercial environment for a bunch of squatters whose aim is to leech off of its users. Just as Google can remove a website from its search index as it pleases, Facebook can also disable a Page on its platform as it pleases.

While the idea of tapping on a consumer platform that is growing as rapidly as Facebook may be smart, the specific method of outsourcing virtually every major operation to Facebook may be bordering on recklessness. There are many ways to use Facebook for business, but the Facebook Page should never be treated as the primary online presence for businesses.