Facebook IPO Filing: Biggest Mistake Ever Committed By Mark And Team ?

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When it comes to social networking, Facebook – with its 845 million monthly active users, 2.7 billion Likes and comments per day, 250 million photos uploaded per day and 100 billion reported friendships – remains the modern day equivalent of Goliath (of David and Goliath fame) and, as most “Social Network” and “Jesse Eisenberg” fans would tell you, it probably has no competition in the near future. But as it often happens with great stories, they all come to an end eventually.

Ever since Facebook has announced its IPO filing, almost all the talk in the international media has been about how successful the internet company founded by a nerd (in his dorm room) had become. But then there could possibly be a chink in the massive Facebook armor. Let us consider a few points:

1. The IPO advertizes Facebook’s offering at $5 billion, and the company’s stock market valuation is in the $75 to $100 billion range. That means only 5 to 7 percent of the company’s shares will be available to public investors, now that’s not as hunky dory as some expected it to be, is it?

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2. Facebook’s active user account figures could be highly deceptive. There are people who create multiple Facebook accounts for businesses or different social circles, since Facebook makes it very difficult to segregate one’s personal life, family, hobby groups, and professional life. Chances are that the majority of Facebook user accounts could be dormant. It seems facebook could possibly be riding a bubble, one very similar or perhaps much more catastrophic then the dot com bubble.

3. As still a relatively new company – only in its 8th year of functioning – is Facebook really ready for the harsh light of the public company life? Most pundits aren’t convinced.

“I will let someone else take up the moral issues and I will stick to the business point: I don’t think that Facebook, with its messianic ambitions and squirrelly zeal, is actually ready for the harsh light of public company life. Even though it comes to market with the weight and hegemonic feel of the biggest brands, it has grown up in such a bubble of cultishness and doctrine, that primetime scrutiny could shortly become very uncomfortable.”     -Michael Wolff, Columnist, The Guardian.

Then there are very capable yet under rated competitors in Google+ , Twitter, LinkedIn and the like, all waiting with baited breaths and all very eager to pounce on any opportunity that will allow them to derail Facebook from the champion’s podium and help themselves become the next big Social Networking thing. After all in spite of all of Goliath’s powers and all that Goliath was capable of, it was the tiny, unheard of, and unassuming David who eventually slayed him.

3 COMMENTS

  1. Well I have noticed performance is way down..Page loads are terrible n slowed it usage..people or we can say new users hate facebook , they hated being forced to timeline n hate bulk of app in newsfeed.. whatever it is, it sure wont be the same after the IPO closes.
    sure they have enough fund now to acquire other companies that will keep them afloat once Facebook becomes obsolete.

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