Facebook IPO: Why I am a Believer

May 17, 2012

I’ve got to admit, I am a business idea killjoy. You know the kind of guy who always tells you why a business idea you came up with won’t work or how it was tried before and failed. I blame it on having been around the block a few times, and having seen the winners and losers. And I am right a whole lot more than I am wrong.

When my friend told me about a new patented square cup that allowed advertisers to market squarely on all four sides of a soft drink cup, I told him to pass. When another one approached me touting Groupon, I urged him to Google “Groupon hate” and see the scores of small businesses seething with venom against the online coupon business. How’s Groupon’s stock price holding up?

So it’s with great interest that I watch the naysayers line up to take shots at Facebook, now that the company’s IPO is imminent. Just days before the IPO, GM de-friended Facebook, withdrawing its $10 million ad spend, claiming that Facebook ads simply do not sell cars. Strange timing, indeed. And then there are the pundits who claim that at a $90 billion or more valuation, Facebook is at its zenith, with nowhere to go with its stock price but down.

Well, get this. I can’t kill the joy over the future of Facebook — and I am eating some crow to say so. A year and a half ago, in my 2011 prognosis of PR trends, I predicted Facebook fatigue would plague Mr. Zuckerberg’s social network, as hipsters and college kids came to see Facebook as their parents’ social network and search for the new, new thing in online venting and viewing.

I was wrong. And anyone who is betting against Facebook is mistaken. Here’s why: Facebook is the Internet for many people. They search, get their news, catch up with family and friends, engage, and play games without ever wandering further. Remember how that was the big dream of AOL back in the day? Didn’t really work out for them. It has for Facebook.

It works not just as a personal tool, but also as a business weapon. OK, so GM didn’t have luck with Facebook ads, but I can tell you from personal experience that many of my clients are retooling their entire business proposition based on Facebook. And guess what? It’s working. For them, engagement is translating into revenue.

You killed Kenny? Stop for a moment, and contemplate turning off your Facebook page. Who would you forget? Who would forget about you? How long before you would be superfluous? Believe me, I know those who have turned off their Facebook pages, only to start a new one again, from scratch, because they quickly learned that when their page went dark, they too faded into obscurity.

It’s now my Rolodex. It’s out-dueled Outlook. It’s won over LinkedIn. Sure, I still use both. But when I want to reach someone, someone from the depth of my past, or the son I just spoke to last week, I message on Facebook. I do so because it’s convenient. Always on. Easy to use on the fly.

So for those who point to GM’s disappointment, I push back and remind them that maybe for Facebook to work, you have to rethink the notion of an offer and response. And to those who believe the stock price is overvalued, I’d like to ask whether 910 million users could ever be wrong?

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