NEWS ANALYSIS: Facebook has become the new diary of our times. How it weathers its first years as a public company will do much to shape its future.
These are the times that try Facebook's souls, especially those newlywed Zuckerberg souls over in Europe on their honeymoon. Oh, and these times may also be trying for one or more investors in Facebook's new stock who thought they were going to get rich quick.
Let's get one thing straight off the top: Facebook isn't Google, and Google isn't like anyone else. Facebook is a social network with lots of adjunct features that eventually wants to be a search provider; Google is a search and Web services company that also wants to grow up and become a social network someday. It will be interesting to see the competition between these two as it develops.
They say a company is only as good as its ability to overcome adversity. Actually, we're not sure anybody has said that, because we couldn't find it anywhere. Nevertheless, it has been an exasperating two weeks for the people who own stock in and run the 850 million-member social network as it has ventured off into the land of Wall Street, suits, mixed drinks, large country estates and fast automobiles.
Facebook is fast finding out that life is now a lot different from the halcyon privately held days of downtown Palo Alto from 2009 to 2011. Way back then -- well, OK, up to two weeks ago -- there were no stockholders, Securities and Exchange Commission officials, auditors, hackers or other ne'er-do-wells looking to make trouble.
Envious Hackers Out There
Yes, hackers. Facebook likely has been hit in recent days
by evil forces undoubtedly envious of the company's newfound wealth. The company, however, won't admit anything of the sort. Of course, they are not required to do so at this point, but now being a public company, it's going to have to be more transparent in the future.
On May 10, several Website-monitoring sites, including DownRightNow.com
, Ecenica, Uptrends and Websitepulse, showed inconsistencies in Facebook's uptime. DownRightNow.com (see graphic at right; the red and yellow bars show about 12 hours of downtime)
showed Facebook as being out of commission for several hours during the late night, U.S. time. Again, Facebook won't acknowledge any downtime. We can discuss this further at a later time.
Shortly before it went public, Facebook made a change of headquarters location (to the eastern reaches of Menlo Park, Calif.), where it now occupies a spiffy-looking campus once inhabited by another very hot company in its day: the now-defunct Sun Microsystems.
We're not saying there are connected dots between the demise of Sun in 2010, the move-in of Facebook in 2011 and Facebook's problems here in 2012. But there's no question things have changed for Facebook following the move to its new home court.
This is a transition time for the 8-year-old company, no doubt about it. It's only been on this new public-type road for two weeks -- a mere blink of an eye. Yet people are quick to jump on the anti-Facebook bandwagon because its stock was mispriced at $38 and has lost some 25 percent of its value during that time span. Oh, and that $104 billion capital value estimate that was bandied about before the IPO? It's now "dwindled" to a paltry $59 billion.
Looks like Facebook got some bad information from its financial advisers. Mark Zuckerberg, Sheryl Sandberg and the Facebook execs are smart people, but they can't know everything about the machinations of the stock market. At some point, they have to trust outsiders. Yes, the opening act went badly, but it's just an opening act.
By the way, but there are more than a few companies around the world who would dearly love having a valuation of $59 billion. Some of them are named EMC (market cap $48 billion), Hewlett-Packard ($42 billion), and Dell ($21 billion).
Somehow, despite all the naysayers, Facebook is doing OK, thank you, and its prospects look quite good for the future.
Sigh. Talk about fair-weather friends. You buy a stock, you know the risks. Don't "like" Facebook's stock and shell out bucks for it or any other stock if you are averse to some risk.
Facebook the Same Company, Only More So
Facebook is the same company is was a month ago, only more so. Why? Because it has been out adding new talent and ideas in the form of acquisitions, mainly in the mobile space. We've chronicled most of that activity here in the pages of eWEEK
. The company has bought about a half-dozen smart-looking startups in the last six months, and all of them promise to add greatly to the Facebook value proposition.
And what exactly is that value proposition, you ask?
Well, we can't think of one, other than to say Facebook has become a virtually indispensable part of the culture by affording millions of users free Web pages, enabling them to connect with friends and family they probably otherwise would have never been able to reach, and allowed them to share photos, videos and thoughts with their friends all at once, quickly and efficiently.
This is not to mention that Facebook has become the new diary of our times.
If all of that has no value to you, that's fine. But it's worth an awful lot to millions of people around the globe. And it's worth a great deal to the advertisers of the world.
Chris Preimesberger is Editor of Features and Analysis at eWEEK.