What is the downside to using facebook as your sole website?

There are some great comments so far. To answer your question specifically, I would say:

1. Credibility - self explanatory.
2. Ownership - Facebook owns your content and all information you share.
3. Back up - Facebook goes down, so does your content. Facebook decides to cancel your account, your info is gone. There is no way to back up this information.
4. SEO - Many people protect their updates on Facebook making the benefits of building content almost mute. Search engines cannot index protected content.
5. Limited Customization - Without knowledge of FBML (which they've been talking about changing for a while now), there are limited things you can do with design / layout customization.
6. Not all customers use FB to purchase products/services. Many use it simply to stay in touch with friends and family or to share pictures & video. If your customers don't use it to make purchase decisions or interact with brands, your page is obsolete.
7. Longevity of the platform. Yahoo was the #1 search engine at one point. MySpace used to lead the charge in social networking. Things change.
8. Flexibility. What if you change your business name? Right now, once you create a facebook page, you're stuck with that name.

I could go on, but have to get back to a presentation :) Thank you for the welcomed distraction.

Lara McCulloch-Carter
President, READY2SPARK

Facebook is great for engaging their audience and most businesses can absolutely find value in maintaining a presence there, but you should never rely on something you don't own. Being entirely parasitic would not be worth giving up the long-term benefits of things like brand equity, link equity, etc.

Maybe I am not making myself clear about what is doing business and what is ROI so I will use an example of a real world situation and you can all decide for yourself.

At the end of the street there is a nightclub and the bar that I own is half way up the same street. The nightclub owner comes into my bar and asks me if I will display his poster advertising his nightclub. I look at the poster and decide that it is mutually beneficial for me to display his poster. I decide to display the poster on the entrance door to my bar. Has the nightclub owner done any business in my bar yet?

As I am putting up the poster the nightclub owner explains to me that his nightclub is very special in that only those people in possession of a coupon code can enter his nightclub. He asks me if I mind his staff distributing coupons in my bar every evening that they are open. The coupons have a code that identifies my bar as being the place where these coupons have been distributed. Again, I see this as an opportunity so I give my permission. That evening, a member of the nightclub staff comes into my bar and distributes the coupons. Has the nightclub owner done any business in my bar yet?

When I close up, some of my customers go to the nightclub at the end of the street. The nightclub owner knows that they came from my bar because of the code on the coupons. He lets them into his nightclub and begins to sell them food and drink. He is able to calculate his return on the investment that he has made in advertising in my bar because he can measure how much my customers spend in his nightclub. Has the nightclub owner done any business in my bar yet?

Just one final point. If the nightclub owner asked if he could play loud music and sell food and drink in my bar I would say no as the only person allowed to do that kind of business in my bar is me.

Back to the question. There are many social media channels that you can use to drive traffic to your virtual premisses. Why would you want to restrict yourself to using just one?

Having just a Facebook page on no company website tells me this is a company that obviously doesn't have much to say or offer to its customers. If you can put in a single Facebook profile your entire business value proposition including product and service descriptions, case studies, team profiles, company background and everything else people want to know about you....then I'd submit that you'll have trouble convincing people you are a real business.

Facebook and other social media should be the bridge to your website and business. Don't make them an island that you can't get off.

You can have a link to your virtual business premises from Facebook, or any other social network platform, but that is not doing business on Facebook. All you have done with the link is to entice people into your virtual business premises, where the business is done.

Sure you can trace a click on Facebook to a purchase from your store but that is not doing business on Facebook.

Please don't go mistaking ROI for doing business.

A web site is part of many pieces of giving a business credibility. Having your own domain name, and a web site is a part of building that Business Cred.

Imagine if a life insurance salesman gave you his business car and his email address was Life@google.com. Instead, he builds credibility with Life@LifeInsurance.com or something similar.

The content on your site needs to be content that is well thought out and promotes your brand. Having the neighbor drop in to leave a comment about their last Farmville crop does not promote your brand, unless your brand is Farmville.

Controlling the content, and having that content promote your business demonstrates your committment to the business you are in.

I believe you are mixing up the use of Google Mail as a mail system and using a gmail domain name for your email address.

You can't mix and match technology at will to have a technical discussion, which you appear to be doing in this discussion. If answers are going to offer counter points to comments people put on this question, they should at least do it with accurate information and sound discussion points.

Gmail domains lack business credibility, and are more typically used for personal accounts. Much like AOL accounts. Many business people used to use AOL.com addresses until Domain Names became much more afforable and easy to aquire. Most people recognize clearly that those addresses do not look professional for business use any longer.

Google mail as an email platform meets business requirements for many, and is clearly recognized as a leader in its field for providing hosted corporate email platforms. There is no argument there. None.

Leveraging just Facebook makes it very hard for people to find your business. In addition, search engines can't find you either. A website is a starting point, Facebook is great for acquisition and customer interaction as people research your company or find out what others think. It has not proven to generate a positive ROI for most businesses yet.

Chad

Facebook, and social media in general, is not about push marketing. Selling or pushing your offers, specials, coupons, discounts or contests is not the type of real, organic engagement that builds real, organic loyalty.

The website has to be viewed as your marketing hub.

It's very dangerous to put all your eggs in the Facebook basket. They can shut you down just like that. As a small business you need to own that URL and consider it your real estate on the web: either a website or a Blog site (with added home page). By all means post to Facebook but do not make it your only web site presence.

Audrey Peters
Author of Social Media Marketing For Small Business -(iPad & Kindle)
http://www.businessissuestoday.blogspot.com

So is posting a special offer or coupon code and receiving directly measurably sales not doing business on Facebook or Twitter for than matter? No mistaking the ROI there Mr. Taylor! It's all about an integrated marketing strategy.

And regarding the email address, more and more small businesses are using google mail because it reduces IT costs. In fact 3 million businesses so far - globally. There's no credibility issue any more.

Actually I am not mixing up anything here at all. I deal with a lot of small business owners who use gmail rather than domain accounts. You may say it looks unprofessional and I used to agree with this viewpoint, but nevertheless it is prevalent and the new order. It is completely different from using Yahoo or AOL.

Ah but Facebook allows you some truly targeted advertising by drilling down demographics which you can't easily do otherwise. And it's not expensive for a small business. Just another consideration.

What? "Nobody does business on social networks." I don't know where you have been, but there are many examples of ROI on social media platforms that I have covered in my book and my Blog, and with clients. Perhaps your view is based on the perception of "social networks" instead of social media - 2 different things. Indeed social media encompasses far more than Facebook.
http://www.businessissuestoday.blogspot.com