Why Facebook IPO is a disaster for Facebook's future
by Tom Merritt
Why is Facebook's stock tanking? Mary Meeker says a technical glitch took the wind out of Facebook's sails on IPO day. Paul Sloan at CNET, shows how the pre-IPO trading pumped up the value too much. Whatever the reason, Facebook is toast. Here's why.
Facebook is not materially different from MySpace and Friendster before it. Google + is also not significantly different. Facebook leads the pack because it tricked everyone into being there. Perhaps 'tricked" is a harsh word. You can use earned if you like. But it did not by being so much better than others, but by making people believe that Facebook was the place to be.
Starting with college kids was a lucky happenstance, but Zuckerberg and friends kept that patina of cool going until everyone's Mom and siblings finally showed up. As long as Facebook has everyone you need to talk to it continues to win.
That's why it's doomed.
The tanking stock just sowed doubt in a lot of minds. Granted, Mom and the siblings don't care about a $28 stock price. if things don't change, they'll stay. But companies care. All this signs in malls and hotels asking folks to follow them on Facebook are predicated on the notion that Facebook is unstoppable. otherwise why trust another brand with your message?
That's where Facebook will get hurt. Every marketing manager in the country has one eye on that stock price. Doubts have begun to creep into their minds. They may not be pulling their efforts from Facebook just yet, but they just asked their assistant to make sure that Pinterest is getting enough attention. They decided that putting all their eggs in the Facebook fan page basket is not such a good idea after all. Maybe that Google + is worth a whirl. Just to see.
It'll take several years for that doubt to widen into a crack and then a migration. But you can count on it happening. When it does expect Facebook to reinvent itself. It's already showing signs by launching app platforms and possibly phones. If it does enough of those things and differentiates, it can coast along as successful as an AOL or Yahoo. Given Zuckerberg's genius it might be as good as a Microsoft.
But the high-flying days of Facebook as an unstoppable rising force are over almost before they've begun.