Facebook’s shares are not climbing the stratosphere and everyone is wondering why. Here are 12 reasons.
1. The public is not as dumb as Wall Street thinks. They’ve been through numerous tulip bulb fantasies before and have seen them blow up in their faces. Maybe the small investor is becoming risk averse.
2. Where’s the money? Every day we read that people don’t have money to pay their mortgages and their college loans. But suddenly they have money for IPOs? What’s up with that?
3. No one goes to Facebook to buy stuff. And buying stuff is what advertisers want. If buyers aren’t on Facebook, then advertisers won’t be on Facebook. GM pulled the plug on its advertising on Facebook days before the IPO. I think they wanted to send a message – and people listened.
4. The rich did get richer. Here’s a story that all the media seems to have missed. The initial investors, employees, friends of Mark and other early entries made a ton of money on the IPO. They got their shares for pennies on the dollar – and they exchanged either their seed money or years of employment in the hopes of seeing a big payday. Believe me, they got a big payday. And they deserved it for the all the risk they took with their money or the long nights and weekends they sacrificed to build the company.
5. Friends aren’t really friends. I get asked to friend people every day from people I don’t know but know me because we have a few “friends” in common. These aren’t friends. They are acquaintances. But somehow “AcquantainceBook” doesn’t pop as a name. LinkedIn, however, does. And those people are upfront about the fact this is all about business and nothing about friendship.
6. True friends don’t post truly personal info online. Sure, they’ll brag about their kids being Eagle Scouts or selling the most Girl Scout cookies, or making the honor roll, or celebrating 10 years of marriage to most wonderful person in the world. It’s enough to put the most sugar-coated Holiday Letter announcements to shame. Did Facebook grab the line from Garrison Keillor’s Lake Woebegone where all the men are strong, all the women are good looking and all the children are above average? Enough already! Stop bragging! Start clicking on ads!
7. People on Facebook don’t have problems. Ever hear of anyone share anything that was really personal, troubling or the kind of thing you’d really share with a close friend? I didn’t think so. That’s because they aren’t really friends.
8. People ask to “friend” me, but they don’t “engage” me. Everyone I know has more “friends” than they can possibly follow. That means I don’t read their stuff and they probably don’t read my stuff. So what’s the point?
9. Facebook is great for true friends who create true communities. More power to them. They’ll buy what their friends recommend.
10. Facebook is great for brands that provide outstanding customer service and support to keep small problems from becoming big problems. More power to them. They’ll buy products from their trusted companies.
11. Facebook is great for politicians who want to broadcast their messages to their adoring publics. That’s fine. But they’re likely to contribute to a campaign – are they willing to click on an ad?
12. Also props for high school kids who post every fleeting thought, every gripe about their social studies teacher, every meal they ate, every mood swing they share with their classmates. For those people is a panacea. But they don’t click on the ads either.
Does this sound like the platform that will launch a million new millionaires?
Too bad Facebook doesn’t have a “don’t like” button.
Love, love, love this article! You basically voiced my main annoyances about Facebook.
To me, FB is another MySpace. People don’t engage there. I have a much better time on Twitter, Google+ or even Pinterest.
Thank you for taking the time to write this article, Dan!
Great summary why Facebook isn’t taking off.
I haven’t seen good value in Facebook so far and won’t get an account until I do. LinkedIn is okay and has its own issues, like puffed-up resumes, but overall is a good attempt at value as long as it isn’t trashed up in the future.
If Dan could do a follow up on this blog six or nine months from now, I think it would be interesting. If Facebook does take off, myself and many others will stand corrected.