I don’t think I’ve waded through so much hype over the coming initial public offering of a company’s stock since Google went public in 2004. Back then, Google gained its fame and fortune as the most useful of Internet search engines.
To me, Facebook’s main claim to fame is that it has become the Internet company most likely to steal all its customers’ private data and feed it to whoever advertises on there. Yeah, I’m not a big fan of this remake of MySpace, but give Mark Zuckerberg and his minions credit for having been able to bring so many millions of users on board for so long. However, Facebook is rigged. You want “likes” for your Facebook bidness page? They’re for sale, at places like this.
Personally, I think Facebook is an online fad that will at some point run its course. For Zuckerberg’s sake, hopefully not for at least a while after its IPO launches around May 17.
All the major media outlets have been hammering on the promo drum (almost as if this were an Apple production). For a while there you couldn’t open a newspaper home page without having Facebook stuffed in your face.
Funny Thing No. 1 is how almost none of these big “news” outlets mentioned that Facebook already went sort-of-public a year ago in a screwy deal brokered by (who else?) Goldman Sachs, which acted as bouncer/sales manager in selling off several billion dollars worth of “private” Facebook stock.
Funny Thing No. 2 is how Goldman Sachs is among a few big “private” Facebook stock owners planning to sell off more than 157 million “private” shares to suckers willing to buy into the IPO (through which Zuckerman himself hopes to sell 30.2 million shares). His company, if everything goes as hyped, would sell the new more public shares at $28 to $35 each, and raise as much as $11.8 billion with a B.
Funny Thing No. 3 is that, while the mom-and-pop stock investors of the world appear to have succumbed to the hype, a number of institutional investors are taking a pass on the deal, unimpressed with numbers showing that Facebook new-user growth is slowing and advertising growth is not keeping pace with the slowing user growth.
And here’s the basic problem with the Facebook IPO: You (not me) are buying into a company that, beyond all the computer coding bells and whistles, still operates on the old media advertising model. To make money, Facebook has to convince companies to advertise on its web site. But see, we’re still stuck in the Son of the Great Depression. People still are dealing with the 40% (or more) loss they took on their houses in 2008 as a result of the mortgage derivative BS meted out by the likes of (who else?) Goldman Sachs. And thus people are paying down their real estate debts or saving their money in case the Republicans take over and tank the economy even further with their austerity uber alles crap. And thus people still aren’t spending like the drunken-sailor consumers they used to be. Demand still is depressed and many millions of Americans still are out of work (not to even mention Europe). So how expectant should one be that media advertising numbers are going to soar sky-high anytime in the near future?
Man, I sure hope Goldman doesn’t humiliate itself and the Zuck on this deal.