Why the Facebook Outage Matters

For a period of what appears to be just under two hours (10-11:30PT), Facebook was out of service this morning. TechMeme has some writers showing that it was hacked and some that it was just a service outage.

An official note from Facebook on TechCrunch shows:

This morning, we temporarily took down the Facebook site to fix a bug we identified earlier today. This was not the result of a security breach. Specifically, the bug caused some third party proxy servers to cache otherwise inaccessible content. The result was that an isolated group of users could see some pages that were not intended for them. The site has now been restored and we apologize for any inconvenience this may have caused.

Normally I would say that an outage here or there doesn't matter much and is ok. Every site goes down from time-to-time, it's just part of the Internet. So why do I believe this outage matters?

Facebook is no longer just another social networking tool. It is now a robust platform with hundreds of apps relying on it for their livelihood. One app that comes to mind is Lending Club. Lending Club provided peer-to-peer loans and uses the Facebook platform exclusively for trading. Richard posted yesterday that they have already passed the half-a-million mark in lending and have issued over 100 loans.

So I ask, what did the outage potentially cost Lending Club? While it might not be enough to affect the books yet, what about as LC continues to grow? Could a two-hour Facebook outage cost in the thousands or hundreds of thousands in losses? What about customers who can't access their accounts to make payments or other transactions?

Clearly Facebook is no longer just another social Web app.