Facebook IPO? Um…

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Does Facebook really have a future?

 

 

Would you invest in a fad? (Fox news POLL )

 

Facebook is priming the news cycle, setting Wall Street a-buzz with the news of its pending IPO. Stocks may have an initial value of $34/share. Investors are lining up for bidding war. Is Facebook a good investment? In the short term, probably. Further out? I’m not so sure.

Facebook, a come-out-of-nowhere success story, has relied on venture capital for years now. Venture investment is optimistic and holds to a longer view on returns. Once Facebook is fully public, it must submit to the quarterly earning cycle, reporting on to shareholders on short-term forecasts. ‘Shareholder value’ trumps ‘vision.’ Does Facebook, a broker of other people’s information, have a future? Will they as profitable as they would like Wall Street to believe? Maybe not.

The tech world is less in love with Facebook than the mainstream press. Facebook came onstage five years ago when ‘social’ was the new thing.’ Facebook’s strategy orbits their original success, continually refining their social sharing model.

Facebook stopped innovating years ago.Worse for them, the company has failed to find any success in the mobile world. It faces a future of obsolescence and  the risk of a new entrant like Instagram. ‘Mobile’ worries Facebook.  Why? ‘Mobile is a Web-less Internet paradigm. Mobile apps don’t have Facebook ‘Likes.’ But ‘Mobile’ is going to be big, very big.

Marginal innovation. Faddish product. Troublesome reputation. Weak customer loyalty. Treating people like ‘product.’ Media hype. Does this sound like a good investment to you?

Interested in the Facebook phenom? There’s the Facebook Project, a video channel of social media experts sharing their opinion. I also recommend reading last week’s Forbes article ‘Here’s Why Google and Facebook Might Completely Disappear in the Next 5 Years.’ Good points, though I disagree about Google’s prospects.

 

 

 

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