So Facebook has floated the left ear of its business making the founders richer than Croesus and leaving many mere mortals wondering how this mammoth of the Internet World can be really worth $100bn.
The words Emperor and clothes spring to mind especially now that it's been revealed that investors may not have been privy to the revenue forecasts put together by advisers prior to the flotation. Okay, yes, zillions of Facebook users all waiting to be exposed to the end result of mad men's output may generate significant revenues. But this is also a costly business to run. Apart from the need to constantly upgrade and increase its server capacity, it also needs to innovate. It needs to constantly find new ways to attract and retain users. It can do this in part by buying new, small companies (like Instagram) but integrating these into the Facebook fold is no cheap, nor technically simple operation.
The key issue though, is what happens when the novelty wears off? What happens when the site gets regularly hacked, infested with viruses, stalkers and perverts? These are just some of the longer-term issues that Facebook needs to address. At the end of the day, we have to ask - what value does Facebook add? How does it satisfy customers' needs? It is a strange dichotomy in that on the one hand someone will complain about the introduction of ID cards or the number of CCTV cameras invading their privacy whilst at the same time posting pictures of their children to several million people they will never meet let alone get to know.
Have the Emperor's new clothes already started to become ragged?
Post-Script 05/10/12
Well, was I right? A plummeting share price reflects what investors really think of the value of the business. In part this is due to the uncertainty as to how Facebook will generate mobile revenues. It will probably have to follow Google in launching its own range of smartphones to derive any meaningful mobile revenue but advertising, I'm not so sure. Less than 24 hours after FB hit its one billionth member, uncertainty still prevails. Just as I quit FB when I hit 3,500 'friends' of whom I knew about 100, perhaps FB will begin to question whether people collecting is just a matter of style over substance!
Post-Post-Script 14/03/13
Al this is rather meaningless and boring. Why not check out my scripts instead: http://www.productionscripts.com/simon-paul-m-155.html
