Facebook, while indispensable as a social utility to a large portion of its 100 MM (and growing) monthly users, is still seen by many as overhyped. Sure, two of Web 2.0’s key developments— the News Feed and the application platform— came from Facebook, but still, at its core, isn’t Facebook Just Another Social Network? How can Zuckerberg & Co. possibly justify the $15 billion valuation they received in late 2007?

Indeed, Mark Zuckerberg is one of the most beleaguered executives of our generation, with public consensus on his status ranging from visionary to just plain lucky. Facebook Beacon, heralded by him as a once-in-a-century paradigm shift in advertising, horribly backfired due to privacy concerns catalyzed by poor execution. Many even predicted that the user outrage would lead to Facebook’s demise— they were obviously wrong, not understanding how Facebook has cemented itself in the social fabric of the YouTube generation. Facebook recovered by letting users opt out of the Beacon program, eventually scrapping all implementations of Beacon because of the clear reticence of users to broadcast their every action and intention to their social graph.

So where’s Facebook headed now? They’ve been making some key strategy moves on the product side that hint at a more cohesive overall vision for the company, one that could have significant implications on how we use the internet.

Facebook seems to be developing an underlying social operating system for the web, a “social layer” that sits between users and their web experience, enhancing it by providing relevant information derived from what Facebook knows about you and your social graph. Facebook’s new site redesign, Facebook Connect, and the site’s integration with Microsoft Live Search are all recent developments that signal a shift towards this larger vision, and once you connect the dots, it’s clearer to see.

First, it’s important to consider Microsoft’s $240 M investment in Facebook. It’s easy to see Microsoft’s influence on some of Facebook’s recent design changes.

Witness:

The application bar at the bottom left is eerily reminiscent of Windows and its familiar “Start” menu. Facebook recently redesigned its site, making it cleaner and more focused on highlighting social interactions and developments (more emphasis on “The Feed”). With the applications being pushed to the side (no longer featured on users’ profile pages), the site looks increasingly structured and rigid. It almost looks like Facebook’s designers wanted to convey a clear message— grow up; if you want frivolous applications and freedom to express yourself, go to Bebo or MySpace.

Microsoft’s influence on Facebook has been more than merely cosmetic, though. Just last week, Facebook integrated Microsoft Live Search into its search bar, allowing users to search the internet from within Facebook. While they haven’t added this functionality yet, it’s not hard to imagine them filtering results based on the search results, click patterns, and “sent links” of your social graph. This is a flavor of the crowd-sourced search we’ve seen from companies like Mahalo and Wikia, but far more powerful— it’s taking an already efficient search algorithm, Live Search, and enhancing its results based on the activities of your friends and their friends (and possibly your interests as well). Which do you think would provide you with better results- this or Google? (Don’t answer yet— wait till the system evolves). Based on this vision, it’s clear that Microsoft and Facebook could be on to something big. Expect to hear more about Live Search within Facebook in the coming weeks and months.

Next- Facebook Connect. This is one of the company’s most important (and arguably most ambitious) strategy initiatives to date. From TechCrunch:

At the most basic level, Facebook Connect will let you sign into Digg and all of these other partner Websites with nothing more than your Facebook username and password. Facebook wants to become the universal ID on the Web, and any progress it makes on that front would be a big deal in its own right. But Facebook Connect goes well beyond an ID management system. Partners can tap into all sorts of social data people put into their Facebook profiles, and actions on partner sites can be reflected back on your Facebook News Feed in a Beacon-like manner.

Jay Adelson, CEO of Digg, clearly believes in the potential of Facebook Connect, explaining:

It is the next step of collaborative filtering. It is the idea that instead of looking at a social network that you’ve created yourself, that you’ve entered in the names, I am going to look at all of you, everyone, and I’m going to compare you all together. I am going to find people like you and I am going to use that collective wisdom to find things that are more specifically interesting to you.

Facebook is planning to roll out Connect soon to a number of partner sites, including Six Apart, ABC, CBS, Hulu, Kongregate, Loopt, Plaxo, Seesmic, StumbleUpon, Twitter, Vimeo, and Xobni. All the data gathered from Facebook users on those sites will only increase Facebook’s competitive advantage here (their repository of social information), so it is not hard to imagine Facebook building up an insurmountable lead as far as developing an understanding of user habits and interests, related to their social graphs. Would any site not want access to this immensely valuable store of information on over 100 million users (as well as easy access to the users themselves, who no longer have to sign up for accounts on those sites, which is traditionally a barrier to adoption)? Facebook has a huge game-changer on their hands with Connect, a social platform that can singlehandedly power dozens of sites.

In sum, Facebook, unwittingly or not, seems to be moving towards a cohesive vision of an underlying social operating system for the Web. Microsoft’s investment and oversight may have driven this strategy direction, as Live Search integration figures to be a key component of Facebook in the future. The site redesign hints at a strategy that transcends that of other social networks, and Facebook Connect is sure to redefine many aspects of the social web ecosystem.

Facebook’s soon going to establish itself as a force to be reckoned with (maybe even on the scale of Google— suddenly, that statement doesn’t seem so outlandish). In the meantime, it’s up to smart entrepreneurs to figure out ways to create value in the new supply chain of the social web.