Facebook, Super Size Me, Over 1 Billion Served...

Shortly, Facebook will have over 800 million users and crossing the billion mark, in about 7 months, i.e., one-seventh of the world's entire population. Rumor has it that a Facebook IPO is in the making, specifically, Facebook will offer 10 percent for $10 billion, making the social network giant at $100 billion. For some perspective.. On August 19, 2004, Google went public, selling $1.9 billion of stock, $23 billion when trading started, now $187B.

Really?  $100 BILLION?!!!

The PROS

Hmmmmm, there are three big reasons that Facebook's IPO could be worth so much…

1.       VIRTUAL REAL ESTATE

With a billion “active” users, Facebook is a reckoning force.  Active users, what does that mean?  Well this doesn't mean that the majority of Facebook's users are online every day, but it does mean, a large and engaged user base. This is not to mention that all that are engaged, are connected, e.g., the average friend count: 130.

Google (not Google+, has been there, but their users are transients, i.e., you transit getting from query to destination.

2.       THE BIG FAT PANDA

Ok, here is the rub; the average U.S. user spends seven hours and 45 minutes on Facebook a month.  Trust me on this, YouTube would be so lucky… but doesn't come close, tying with Google with less than two hours a month.

That is a lot of “face” time (pun intended), a lot of branding, behavior, connections, and preferences being gathered. Yes the know that the population doesn’t go there for ads, and the marketer’s know it, but since they're on the site for so much longer than on a search engine, the sheer volume of viewers and the residual impression times, the advertisers could, theoretically, balance out.

In short, it’s a destination where people hangout.

3.       LINKED AND LOCKED

Unlike its predecessors, Friendster and MySpace, one might well expect that at this point, eight years, that most users would Fatiguebook with the mass exodus, but in fact, they’re not.  Facebook is expanding its demographic reach. While growth among young users has slowed (but not gone negative), perhaps due to saturation, growth among adults over 50 is growing rapidly.

Facebook is becoming engrained in our modern life. Disconnecting from this network is not as easy as just moving to a different social platform (like Google+).  As they say, Facebook and the world is with you, Google + and you Google alone.  In essence, the more people (real connections) you are linked to on Facebook, the more difficult it is to leave. That's why Facebook tries so hard (and succeeds) at getting people to connect with other users. The inertia is too great to change.

The CONS

It's not a sure thing the company will stay in this position forever, and it certainly won't if Facebook doesn’t address some key items.  Its longevity has some risks:

1.       Advertiser support.

People don't go to Facebook to see ads, and advertisers know it (compare to a search engine, where ads can be not just relevant, but desired). They’ll have to find their nitch as with Google on revenue generating.

2.       The Zynga Spin. 

It’s no secret, a large proportion of Facebook's revenues come from Zynga. For now these two need each other, and both believes they’d be better off without each other, but in fact, they are grossly wrong.  However, the point being, the alliance may not be sustainable.

3.       Mobile support.

Facebook has mobile apps, but they are weak sauce against its web service. If not attended to, mobile adoption or lack thereof, can interrupt Facebook's growth, mobility is trending huge. Adapt or die...

4.       The Google Wave

Google+ is not leaving anytime soon, not after blowing it with Buzz, Wave, and Orkut, and not with Google knowing how valuable it is to own a database of people. Google can, and is, in everyone’s Face.  Although, not nearly at Facebook levels, and may never be, but Google has the resources, and the battle knowledge, to lay in a prolonged campaign against Facebook. After all, look at IE, not the best, but did eat Netscape, safari, Opera, Firefox by perseverance.

Good investment… duh… aside of the nits above, their playing with a full deck, and if they play their cards right, all the cards will be face cards and they can draw a full house!

So “Once more unto the breach, dear friends, once more;”

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About Rick Ricker

An IT professional with over 20 years experience in Information Security, wireless broadband, network and Infrastructure design, development, and support.

For more information, contact Rick at (800) 333-8394 x 689