Facebook Goes Public – and You?

SBS Swiss Business School in Zurich, Switzerland > Facebook Goes Public – and You?

Facebook Inc. will go public on May 18, 2012. As regular citizens of the world, we will not financially benefit from this operation, since solely early investors and financial institutions will cash. – A critical comment by Bert Wolfs.

Facebook has waited a long time before entering this process compared to older peers like Netscape and Google. Overall, I personally believe that Facebook is highly overvalued and doesn’t make a good buy for your financial portfolio.

Facebook has value. Otherwise how can 900 million people across the globe be convinced to be part of this system? People like to communicate; people like to exchange ideas, gossip, and spread rumors. It always has been like this. But how to make a viable business model out of this – that is the real challenge.

Academic studies have not found a direct relationship between advertising on Facebook and increased brand recognition or sales for companies. People like to be associated with great brands on their personal Facebook pages, but in real life they are not necessary consuming these brands. The important step from convincing people of a product to actually make them buying it hasn’t been made yet.

But the Facebook IPO is important. Why? Facebook is seen as an innovative company, carrying a message of new spirit, it is considered a great business. It has driven many young people into entrepreneurship and will make a handful of people across the globe millionaires or billionaires. The entire tech industry is taking a close watch on what will happen. The Facebook IPO cannot afford not to be successful, because it will bring the markets down and that is what we can miss in this insecure economic era. Facebook has become too important since it stimulated innovative ideas for other companies, like Instagram Inc. and others.

What deserves the most admiration in this process, is the person of Mark Zuckerberg. A young man from a regular American family can become a successful entrepreneur, which deserves deep respect and keeps the American dream going.

A final – personal – warning I want to give. Be careful with what you keep on posting on your Facebook page. Pictures from other persons e.g. like football stars or music stars are protected by trademarks and copyright laws. As on your personal or professional website you cannot post pictures, logos, maps etc. on your personal Facebook page without agreement. In Germany, several users have already received fines for doing so, reaching 20’000 Euro and more. So, be careful with your public appearance.

Another fact you have to be aware of is that Facebook ages. It has gone far beyond being that young hip business it has been a few years ago. Youngsters are looking for alternatives, peer social networks and communication programs that are fulfilling their specific needs. Facebook has become the “parent’s network”, an established company, grown-up, common… boring. A meeting place for virtual farmers and commercial advertisers. The IPO may be – even probably another major financial success – the beginning of the downfall of an empire that could end up as a one-decade flash in the pan.

Nevertheless we wish Facebook a great IPO party but we remain alert concerning our own privacy and public appearance. I like it!

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