June 2, 2012
They say that a week is a long time in our business, and surely the folks at Facebook would agree.
The overwhelming media darling for the past few years saw its IPO become a catalyst for the press, and every other news channels to turn on the social media network. I guess the largest IPO in history was either going to go one of two ways with them. As a journalist once told me, to the news media, a plane that crashes is a much better story than one that takes off!
Mark Zuckerberg strikes me as being quite different than most other digital entrepreneurs. He never particularly chased the limelight. In fact the notoriously media-shy executive was relentless sort out by the media. He never seemed in a hurry to sell to advertisers. Until recently we mostly pursued him. And it would seem that the necessity to go public came more from the desire by the money men and the large number of employees looking to realize value for their stock.
So what does a disappointing IPO and disgruntled investors mean for Facebook and the advertising and media community?
Nothing. Facebook is no different this month than it was last month.
It is a powerful, ubiquitous venue for social interaction by consumers … about half a billion exchanging or viewing content every day.
It remains an interesting platform for brands. I’m not sure if we have yet figured out its full potential just yet or indeed how to monetize or measure it satisfactorily.
It has become a venue for advertising with some rich and fairly unique insight into their users profile, interests and behavior.
A flawed IPO and fledging stock price doesn’t really change that.
Those of us that recall the great dot com stumble in 2000 will remember that while catastrophic for many investors really didn’t impact the underlining development and growth in the Internet as a channel and a marketing medium.
But here’s what I fear…
The overwhelming attention by Wall Street and now its public shareholders to its quarterly earnings, cause their management to lose its focus. The ad community isn’t going to spend more just because they need to hit their numbers. Continue to work with us to find the models, listen and by all means sell. The dollars will come because it makes sense to marketers when it delivers an ROI that we can justify on our timetable. Stay the course. I worry that expectations at this point seem unsubstantially high and that they could quickly lose patience and prompt them into making rash decisions.
Here’s what I hope for from them …
They use the cash well. Acquiring new companies, new technologies; and entering new venues is going to be what is going to define Facebook Inc. in the future.
When one looks at its peer companies … Google, Microsoft, AOL and Yahoo! Their stock valuation and performance as media companies has been defined as much by their new businesses as their core business model.
Google for example, bought the companies or technologies behind YouTube, Gmail, Google Maps, Chrome, Adsense, Android, Google Books, Google TV, Google+ and Google Wallet. They are now much more than a search engine/Adwords business.
I don’t plan to invest in Facebook stock anytime soon. But what is more important to Facebook is if they can get me and the rest of the marketer community investing in their products.