Of the three options, search is clearly the most interesting. An external ad network is inevitable. Google proved this model with Adsense. With an already huge base of advertisers bidding on CPCs, it is impossible for most other ad networks to compete on publisher payouts. But Facebook’s traffic is so great now that an external ad network might increase their revenues by 2x or so. The same goes for entering China. They might get another half a billion users who monetize at lower ad rates than US users. Neither move would put them in Google’s revenue range. They need a better business model for that. The only (known) models that deliver RPMs high enough to compete with Google are search, payments, and e-commerce.
Chris Dixon citing a report on Facebook’s possible options for growing the company.
With search, the main challenge is training users to think of Facebook as a place to search for answers, besides the default Google. An ad network seems promising, but I don’t know enough about it to really have an opinion. China is always a lucrative market given that it has the world’s largest internet population. But it’s more of a political challenge than anything else. Local social networking clones might also capture a huge market share before Facebook even has a fighting chance; eg, Baidu with search.