Libre: Facebook’s move

Friday, February 3, 2012

THE film “The Social Network” gave a face to Facebook’s (FB’s) Mark Zuckerberg, the youthful founder who charted the company---meant originally for Harvard students---to what it is today, connecting 800 million users around the world.

This week, Zuckerberg stars as FB seeks to raise US $5 billion in the world’s largest initial public offering (IPO) of an internet company. The firm is valued at US $100 billion, with a net income of $1 billion in 2011.

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How FB over­took MySpace and Friendster, and held Yahoo and Google by the horns, would be a good read for marketing and management experts and students. Can Zuckerberg lead FB in the next phase where businessmen and speculators demand good return for their money?

In a letter addressed to prospective investors, the 27-year-old CEO outlined five core values of the company, namely: focus on impact, move fast, be bold, be open and build social value. I find the last one appealing. Zuckerberg says that “Facebook exists to make the world more open and connected, not just to build a company.”

It’s not about profit, it’s about people. It is that philosophy that must have contributed to the unprecedented growth of FB. It has the ability to read, if not respond to the needs of its audience.

One must be wary, though, of the fickleness of the web-generation that, in one instance, galvanizes one site and then, before you know it, shifts to what seems to be the next big thing. AOL, Napster and Bebo went from stratosphere to ground zero while Groupon, which had its IPO in June, faltered in value.

Unlike the late Steven Jobs, who created computer stuff that changed the world, Zuckerberg merely improved existing formats. He also has an anti-establishment persona that resonates with the young people that populate FB.

Since FB will be dependent on advertisements for its revenue, it may take advantage of its reach to interest companies to promote their products and services through the network. The problem though is, will FB users not be slighted by the bombardment of advertisements on their screens?

People must learn from Myspace, which was acquired by News Corp. on July 2005 for $580 million. From its heyday in 2006, Myspace ranked 138th in total web traffic on Dec. 31, 2011. On June 29, 2011, Specific Media and Justin Timberlake bought Myspace for approximately $35 million.

FB is the king of social networking today. Let us hope that with deeper pockets, it can further improve its services and not succumb to profit vultures that have come to the party.