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Warning: Stay Away From The Facebook IPO

5 reasons why the Roman Empire of the social media landscape may be crumbling - http://onforb.es/Je6O79


#facebookipo #facebook #mobile
Pinging +Mike Elgan
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Yifat Cohen's profile photoJACO V B's profile photoJ Schippnick's profile photoJochem van Drimmelen's profile photo
49 comments
Rob Go
 
I'm still gonna try and snag a couple of shares.
 
+Yifat Cohen I totally agree with these assertions, but I also believe that G+ is not immune to failure. I ditched Facebook for G+ obviously, hoping for the best.
 
If it has anything to do with Facebook I avoid it period. I don't use it, I don't care about it, and I will not invest time or money in it ever.
 
The story smacked more of writer predisposition that anything. Social media polls are rather meaningless. I can poll people here, poll people on Twitter, poll people on FB and get polar opposite numbers. In his fourth point he completely contradicts himself. I take it with a grain of salt as another "I want to see FB fail" story.
 
without a shadow of a doubt the culture inside FB will change when its a publicly traded company. It will have a 100 billion dollar valuation and no discernible product other than your eyeballs and the ability to advertize to them. Shareholder wealth will be the driving factor. Right now they are a private company making a small profit off advertizing. And that they do not have locked down. In my world of business valuation is tied to equity and profit margin. This valuation is artificial you cannot sustain fiction for very long. The Internet is littered with companies like this. And forget its more I want to see FB fail its down to the numbers looking at the books. FB does not have the revenue or potential revenue growth to match this valuation its pure fantasy and its going to have negative effects on the company as it moves public.
 
"Hate" is a strong word +Gary Stein. I don't hate #facebook I just Dislike them greatly ;)

Here's what I dislike - the fact that they own my information, the lack of customer support, the fact that they decide which posts I see and from whom, the fact that they treat me like a data source solely for their own profit...etc.
What I do like is the fact that they're not hiding their motives, which is why I'm here, not there.

And I just find it absurd that it's worth that much...
 
And I completely agree with +Sean Wetherall. I'd love to see one company who has a positive ROI from their presence on Facebook. Not from buying ads and generating leads, cause you can do that with Google Ads and get just as good results.
Rob Go
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I'm just interested in buying it because I know the world is full of morons who won't give up that crack anytime soon. I don't even have a page. I just want to roll over some profit before their probable MySpace-esque demise in the future. I don't even care if I only make 50 bucks. 50 bucks is 50 bucks.
 
Find your inner peace and enlightenment by letting go of this passing hatred. Focus on what you can do to make a positive impact +Yifat Cohen
 
I don't see hate... just a different opinion.
 
I have to say I disagree with +Mark Evans on his advise on +Forbes not to invest in Facebook. Like no other social network, Facebook has been adapted by the masses, most of them younger than 30. It is this new generation that is choosing new ways to communicate, stay in touch, and share experiences. Being connected is life as they know it, and they will remain to be so. This phenomenon has little to do with technology, it is more a sociological shift. Social networks like #Facebook , #Twitter and +Google+ just happen to provide the tools they need. The future of these tools lay in different aspects.

Let's have a closer look at Mark's considerations:

1. Social media fatigue.
It is true that many are kinda stressed by all the connections they need to maintain. We are simply too wired and in need of finding away to deal with this information overload. But that doesn’t mean that social media are a fad, nor that Facebook is. We may be de-friending, but as said, remain connected.

2. Facebook is no longer hot and sexy.
You either love it or you hate it, but nearly a billion people can’t be wrong. Even once Facebook becomes a commodity, rather than a novelty, it is the largest social network ever. It is deeply integrated into our daily lives, and a social hub for many. It is the starting point of all their online activity.

3. A growing number of advertisers are questioning whether Facebook is a good advertising medium.
Being the world’s most visited website, it is a very effective advertising platform. It is one of the main reasons why Google+ was developed. The revenue from both Facebook and Google largely depends on advertising, and advertisers are there where the masses are.

4. Mobile, Facebook hasn’t figure out how to make money from it.
You may have a point here, but that accounts not to Facebook only. Twitter introduced promoted tweets, and Facebook might do the same.

5. Facebook’s need to drive financial results is going to put the emphasis on making more money.
Nothing new here, and again, it does not solely apply to Facebook. All social networks need a commercial business model, hence the birth of Google+.

Regarding the above, I must conclude that +Mark Evans’ arguments do not stand. Brands will increasingly invest in any social network that has a critical mass. Not only financially, but to listen and engage in the first place. If they wouldn’t do so, their future would be uncertain. Yet, brands are learning how to generate revenue from these investments.

Should Facebook fail indeed, it would be the result of arrogance. They’re leaning on the power of numbers, while brands need to pay considerable sums of money for advertising and technical support. I have the impression Facebook doesn’t value them enough. So far, the company has shown little interest in what consumers and brands think of them. And the number one rule for social brands is to listen to their customers, something I really appreciate +Google Developers for.

Technology comes and goes. That goes for Facebook, as well as any other social network. MySpace used to be it, just like Friendster and so many others. They didn’t fade because they weren’t any good, but because newer, more innovative networks were developed.

#FacebookIPO
Attn. +Mark Zuckerberg +Brian Solis +Mari Smith
 
Way to go Jochem CC'ing Zuckerberg yup he will along soon to review your post.... ;-) oh wait...just a sec... CC: +Mark Zuckerberg
 
Like I said above +Jochem van Drimmelen, give me one example of a company that saw any significant ROI from having a Facebook page.
 
Good comment +Jochem van Drimmelen...

Some thoughts:

1. Social media fatigue.
I don't see it as a threat for Facebook either, at least not in a way that the end of Social Media in general is near. Then again, Social Media as just promoting yourself might be over. It already shifted towards communication and it will go more into collaboration.

2. Facebook is no longer hot and sexy.
Social Media in general has become a commodity.

3. A growing number of advertisers are questioning whether Facebook is a good advertising medium.
He's got a point there. Google can show adds in Search, G+, Maps, Earth, Streetview, YouTube, Picasa, Docs, Drive, GMail, Groups, Blogger, Panoramio... where Facebook can show adds in... well... Facebook. Also a big difference: Google shows adds mainly where people use their services, not where people contribute content to their services.

4. Mobile, Facebook hasn’t figure out how to make money from it.
That's a good point too. If they haven't figured it out by now, it might be difficult to do it in an already blood-red ocean where everybody is biting everybody else for their share to survive. Then again, if they can make enough money from other services, who cares?

5. Facebook’s need to drive financial results is going to put the emphasis on making more money.
Tricky. To make more money, they need to push more and more adds. Getting back to point 3, they don't have many options besides decorating the user profiles with banners and annoying flashy stuff. But once they annoy users too much, there's a serious chance people start moving.


Personally, I think it's a good thing that there is competition. I wish Facebook all the best since a strong and healthy competitor will keep Google sharp. And vice versa of course; look how many new things Facebook has been introducing since G+ started in comparison with the years before.
Facebook is a company with a great value. Still, I feel that the current value is overrated. I don't expect a new bubble to burst but I expect some inflation there.
 
+Yifat Cohen There are two types of ROI: hard and soft. Any company that aims to become successful on social media must embrace the soft before anything. Soft ROI comes from brand engagement, which is solely achieved through active listening and engaging. Only once a brand's social appearance is appreciated, it can start considering hard ROI. Simply read +Brian Solis' works and you'll be convinced.
 
I know what social media is for +Jochem van Drimmelen and that's not what I'm arguing.
And you still haven't given me any examples.
So here, I'll help you a bit. The social media campaign for the Muppets was mainly done via Facebook and Twitter, where they received over 4 million likes and resulted in record breaking sales on opening weekend.
“The Avengers” grossed over 1 billion dollars with their use of social media (here's an infographic about it http://bit.ly/JeNF55)
But I'll argue that movies don't fall into the same category as business pages on Facebook, for obvious reasons.

So now, with your vast experience, surely you can give me a few examples of businesses who see either soft or hard ROI from their Facebook page.

Take your time ;)
 
Excellent points +Andre Speek! I don't mind competition either, especially when it benefits the consumer.
 
BTW, there are plenty of examples of brands that have successfully applied social media to achieve soft ROI. I consider my company, +KLM one of them.
 
Forget the hard vs soft ROI this is nonsense. Talk financials. Its seems to me that people seem to be caught up in fantasy book keeping. Forget traditional vs new media companies. Bottom line to warrant a market valuation like that you have to have equity and income that props that up. What we have here is a company on the face of a new bubble. This valuation and profit margin is 100% unsustainable. The IPO will spike and the only people making money are the underwriters and investment funds. Joe normal is not getting in on the money making bonanza. And these funds will dump and run to make their money. Then the bubble will burst the first time FB misses quarterly targets. So folks try sprinkling some financial analysis in with the brand engagement and ad based revenue fantasies. And I am rubbing my eyes a poster above stated if FB does not get mobile right but gets revenue elsewhere who cares??? WTF is all I can say.
Rob Go
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That's not gonna happen for a few months or even up to a year or two. Joe Normal has at least that amount of time to cash in. +Mark Zuckerberg

Uh oh, I did it again.
 
You meant oops, I did it again didn'tcha?
 
+Sean Wetherall hehe... what I mean is that not every company has to be big on mobile... As long as they get their valuation and profit margin right... Being a social network getting it right on mobile is of course a pretty obvious direction, but as you said... bottom line it's about running a profitable and sustainable business...
Rob Go
 
+Sean Wetherall The word is it'll hit $100 a share by the time normal peeps like me can get our mitts on it. If it goes much higher, then I might bail.
Rob Go
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Oops, +Mark Zuckerberg , you gettin' all this? Normal Joes and Marys talkin' stock in your baby.
 
Andre my man if you are in social media and you are not killing it on mobile you do not exist. More people access FB and G+ on mobile then PC. So you need to make money where your eyeballs are when your only revenue is ad based. I agree Rob it will hit $100 pretty quick. I have all my money in pink meat by-products and corn based fructose so it will take me time to liquidate so to speak. CC: +Rob Go +Yifat Cohen +Andre Speek +Mark Zuckerberg
 
+Sean Wetherall "So you need to make money where your eyeballs are when your only revenue is ad based."

True... or find other ways besides ads (and quick !) to generate revenue... ;-)
 
We're talking two different things here:

1. Will Facebook survive?
I may not be too big a Facebook fan myself either, but the arguments +Mark Evans uses in his article are very one-sided. The challenges he describes are general, and apply to all social network sites.

I agree with +Sean Wetherall and +Andre Speek that the advertising options on mobile are limited, both on Facebook and Google+. They got work to do. Especially on mobile, promoted tweets may be a smart move. On the other hand, real estate on mobile devices is limited, and advertisers must prevent being considered annoying for claiming it. People are willing to pay for mobile apps that don't show ads.

2. Can brands drive revenue from social?
Yes, bottom line for any commercial company is a profitable, sustainable business. You can't live on soft ROI forever, so in the end revenue is key. But I am convinced soft ROI is a vital part of the sustainability. If you don't value your engaged customers, they'll go somewhere else. That is simply #CRM 2.0.

+Yifat Cohen Your real point seems to be that you don't believe in a profitable use of social media for businesses in general. Correct me if I'm wrong. Those businesses that adapt successfully to the new world will profit from social media, so they will invest in it. The business model of Google+ ( #SEO and #SEA ) more ore less forces companies into it. I suggest we wait one or two years, and then review this thread. I bet you'll see that those companies that got it right are making money from social, while those who didn't are deminishing. Remember Borders, or Tower Records?

BTW, I'd love to hear from +Mark Evans here...
 
You're kidding me, right +Jochem van Drimmelen.
Are you seriously asking me whether I believe that social media is imperative for business growth?
Um... You see my tag line as the G+GoTo Gal... right...?

I'm now seriously confused.
 
I'm not questioning social ROI, I'm questioning Facebook's ROI.
 
"Facebook has every potential to truly earn Wall Street as both a friend and a fan. To do so however, will take the company’s continued investment in the social graph and now also the investor graph." says Brian Solis at http://goo.gl/4oi4U
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