Inside Facebook, a blog that tracks Facebook and the Facebook Platform, just posted an entry about Facebook’s new Chat functionality.  It’s only been launched across a few networks so far.  I just checked my profile and appears as though it isn’t live in Calgary yet.  You can read all about the functionality via the link above, but what I thought was interesting is that Facebook Chat is great an example this is of the network effect, defined as:

“In the narrow usage, a network effect is a characteristic that causes a good or service to have a value to a potential customer which depends on the number of other customers who own the good or are users of the service. In other words, the number of prior adopters is a term in the value available to the next adopter.”

If you agree with that definition of value, I can imagine that Facebook Chat will be an exponentially more valuable Chat application than MSN or AOL Chat to many Facebook users.  I have 250-ish contacts on MSN.  I have 650-ish contacts on Facebook.  Now, while I admit I talk to the same 10 people 80% of the time on MSN (the same 10 people I who would likely talk to 80% of the time if I were using Facebook Chat as my chat app) the ability to potentially have access to additional 400 people in my network is appealing.

I wouldn’t be surprised if Facebook built a desktop app to make accessing your network easier.  It would really bring the pillar of “communication” to live for Facebook outside the website.

What do you think?  Would Facebook Chat be more valuable to you than your current chat app?

PS - Borrowed graphic from Grant.

PPS - Yes.  I know.  It’s been a long time!