$38 a share. No thanks, I’ll give it a miss if you don’t mind. The next Mark Zuckerthingy is lurking around the corner.
There are some immutable laws in advertising and marketing, that have transcended technology down the decades, and are still as relevant today as they were 50, 70, 30 years ago.
The hype and mass adoption of Face Book by the acceptance generation will not budge these basic underpins.
Face Book just isn’t the place people instinctively turn to when they want to buy a product or a service.
Expressed demand gets satisfied by Google (latterly it was by something like the Yellow Pages. Incidentally, another business Gorilla that has gone out with a whimper in the face of a better medium) This expressed demand then translates into multibillion $/£ revenues for Google, and so far, it still delivers a good platform for its search, and hasn’t deviated too much away from a winning formula (I know there has been some tinkering with the layout, and how results are displayed, but basically its fairly familiar)
Face Book, on the other hand, is struggling to find a way to generate similar income streams from latent demand, desperately hoping its trump card, having peoples profiles so they can ‘target’ their advertising, will lay the golden egg.
The sobering reality is proving different.
People want to gossip on Face Book. Fundamentally that’s it. That is how it grew. That is its Raison d’être.
Contorting Facebook so it carries tons of Ads, videos and anchor text links may even prove counterproductive, as people find it all too ‘noisy’ and begin to drift away.
If it walks like a duck, it waddles like a duck, and it quacks like a duck. It probably IS a duck. Large multi nationals doing their homework and pulling the plug on using Facebook tells its own story.
On top of that, the absolute imperative that sooner or later the next big idea will come along. Let’s consider the notion that Facebook is nominally worth more than Campbell Soup and General Mills combined ($34.4 billion combined market cap)
There we have a bricks and mortar business which has built market share diligently over many years and understands its market. It may not perform spectacularly on the markets, but providing it doesn’t do anything stupid it should continue to prosper in the long term. There are GENUINE barriers to market for any likely competitors to surmount before threats can emerge.
Facebook, on the other hand, is precariously ONE GOOD IDEA away from relative extinction.
Comparing it to other ‘Tech Companies’ is both misleading and nefarious. Facebook is a concept, albeit one which has been hugely successful, but that success can be argued to be built on sand. Yahoo and MySpace, two previous internet darlings who now face the scrapheap stood on the very same sand.
$38 a share. No thanks, I’ll give it a miss if you don’t mind. The next Mark Zuckerthingy is lurking around the corner.
