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Archive for June, 2012
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Andy Clinkman | Friday, June 1, 2012 3 Comments
Can you imagine a world without Facebook?
My eyes were glued to the TV as I watched Mark Zuckerberg ring the NASDAQ opening bell and expose his company to further public scrutiny. For many looking to make a quick buck off of the IPO, Facebook has thus far looked like a dud. With stocks plummeting, critics of Facebook are proclaiming “I told you so” and quickly writing off this American success story. I can’t wait to tell the speculators “I told you so.”
See, I’m a child of the social generation. I’m not a financial advisor, nor am I an expert on everything tech. However, when Google went public in 2004, I could have told you it would be a great investment. When Apple was on the brink of collapse, I could have mentioned that they had the capability of really kicking butt. And with Facebook going public now, I’m telling you that Facebook will be around for the next 50 years.
The main critique of Facebook is that it’s just a social networking platform that won’t be able to deliver real value. It’s an understandable stance. After GM ended its agreement with Facebook for paid ads, the very prospect of Facebook ads being worthwhile for businesses came into question. If a large company can’t profit off of its advertisements, how can a small business?
With 85% of Facebook’s revenues coming from advertisements, weakness in the system is undoubtedly a bit scary. The roughly 1 billion unique users inhabiting the Facebook-world are still hard to monetize.
With news of Facebook’s overvaluation, investors are reasonably skeptical towards Facebook’s exact worth. But should they bet against the 800-pound gorilla?
The Future (my fearless forecast)
If we take a moment to remember, “Rome wasn’t built in a day,” then we appreciate that Facebook is still gaining its legs. Facebook has already shifted the world.
After all, it was Facebook that piqued my interest in Public Relations and later Social Media. It was Facebook that filled my college days with event invitations to parties. It was Facebook that started revolutions and unified people against tyrannical governments. When a government completely forbids their populace from using a social networking site, there is definitely something special.
It is Facebook that is working to determine presidential elections. It is Facebook that connects family members worldwide. It is Facebook that allows users to actively participate in conversations around the World Wide Web. It is Facebook that will continue to change the social landscape for years to come. And it is Facebook that does not yet know its own potential.
And how will Facebook do it?
The potential of f-commerce (Facebook Commerce) to track data and optimize it for individual users is mind-blowing. Businesses will be able to reach ~1B users and sell merchandise directly through Facebook. Slowly, users are accepting that Facebook caters advertisements to interest and search history. Once Facebook finds a way to remove the taboo of being a social media site and harnesses its mobile potential, it will explode financially.
With all the comparisons to Myspace’s gigantic fall from grace, there is one big reason that Facebook won’t fail. It has time.
Facebook has what all businesses seek: a user base that is incredibly loyal. As much as people dislike the changes that Facebook makes to its platform, they always stay. The prospect of a gigantic user-base and technological advancements prepare Facebook for future progress.
This preparation for the future will work well as Facebook emerges as much more than a website. Think once again of the two tech companies that come to mind first, Apple and Google. Apple is now much more than a computer company (iPad, iPhone, iPod, iMac) and Google is much more than a search engine (Android operating system, Google+, Google Docs, Google Maps, Google Glasses).
Apple’s CEO, Tim Cook, told investors that ‘the one company closest to being like Apple is Facebook. And just today, Apple announced a partnership to build Facebook into their iOS 6 software.
So why are we betting against Facebook?
If you are a business owner, you probably would love the ability to do these things at a fraction of the cost
- Cater ads by interest and location
- Sell items to interested parties
- Create promotions
- Find new customers
- Interact with happy and disgruntled users
- Send messages to followers
However, Facebook does not just help businesses; it also educates the user on new products and allows for feedback that traditional media do not allow. After all, we trust our peers much more than we trust advertisements.
In the end
I’m putting my eggs in the Facebook basket. I’m no financial advisor, but I do see the potential of Facebook to continue to drastically change the worldwide business environment. Does this mean that Facebook will transfer into immediate justification of the $38.00 per share? Absolutely not, but I’ll leave it at this: I’m not betting against the social giant.
It may be a hunch, but can you see a world without Facebook?Read more