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The Stock Is Down But the Sky Isn’t Falling for Facebook


Mashable OP-ED: This post reflects the opinions of the author and not necessarily those of Mashable as a publication.

Dallas Lawrence writes about emerging media trends, online reputation management, and digital issue advocacy. Follow him @dallaslawrence.

What a difference a week makes. Some seven days ago, media outlets from around the world were stumbling over themselves covering “the most anticipated IPO in history.” Even Facebook and its investment bankers drank their Kool-Aid, upping both the number of available shares and the price in the final hours before the world had a chance to own a piece of Mark Zuckerberg’s dorm room brainchild.

One week later with a botched NASDAQ IPO and a tanking stock price, the knives have come out. During one 24-hour period on Wednesday, Google tracked more than 40,000 online news stories about the fumbled IPO. And never one to miss a media opportunity, SEC Chairman Mary Schapiro announced a review of the “issues” that led to the chaotic initial public offering.

SEE ALSO: Facebook Users: 13 Ways the IPO Could Affect You

In times of increased scrutiny and potential crisis, when it rains, it usually pours. And for Silicon Valley’s golden child, a tsunami of criticism has suddenly washed ashore. The good news for Zuckerberg and Co. is that despite the current coverage and deflated stock price, the future still looks very bright. Here’s why Facebook’s impending demise has been greatly exaggerated.

  • Size Matters: Facebook recently crossed the 900 million user mark. While an impressive number, it is the tip of the global iceberg. According to a recent Times of India piece, in just the past six months, new Facebook users have grown 20% in India, 65% in Japan, and 56% in South Korea. This number will continue to grow and Facebook will have no trouble doubling in size in the next few years.
  • Data is King: If Facebook unplugged tomorrow they would still own the most powerful repository of global human data ever collected. Age, race, sex, marital status, kids, employer, and education history are all table stakes for Facebook. They also know what we like, who we like, what we don’t like, and what we read, listen to, and watch. It’s all cataloged and tagged. The best part is that Facebook doesn’t have to use creepy data-scrapping technology to gather this information. More than 900 million people voluntarily provide and update it every day. If data is the new currency, Facebook will be printing money plentifully well into the future.
  • Humans are Social: Facebook’s in-house cultural anthropologist (they actually have one) often speaks about how, since the beginning of organized civilization, we have gathered together in groups of several hundred. No more, and not much less. When the number gets too large for the kind of social interaction we crave (interestingly a number eerily close to the average number of friends a typical facebooker engages with), the village breaks off to form a new conclave and a new “social network.” This social connectivity is what sets us apart as a species, and Facebook knows how to leverage that.

    And while every digital platform has their “gee wiz” engagement numbers, Facebook continues to stand out on the metrics that really count. More than half a billion unique users log into Facebook each day sharing three billion likes and uploading 300 million photos. Of their 900 million current users, 398 million visit the site six out of every seven days. These numbers relay far more than just engagement. They showcase social interaction at the deepest levels.

    Think about it. When was the last time you printed a photo to share with friends or family? Why would you when they can see it on Facebook? When was the last time you used an event-planning website to organize a social gathering or even attended a high school reunion? Why would you? All of your friends are on Facebook. Humans are instinctively social and Facebook is providing the organizing conceptual framework we crave as social creatures.

The challenge for Facebook now is to move past their reluctance to forcefully engage in the communications marketplace and remind investors, users, advertisers, and developers of what is working at Facebook. GM may have cut advertising, but thousands of businesses large and small are seeing huge successes in targeted social advertising and will continue to.  Facebook needs to share these stories every day.

And while mobile has been piled on as another touchy point for the company, it’s worth noting that there were still half a billion mobile Facebook users in April 2012. That’s more than twice the number of iPhones ever sold. And with mobile projected to explode in emerging and developing markets in the next two years, Facebook will be positioned to further leverage its growing revenue potential into areas such as payments, social gaming, and shopping.

To be sure, Facebook’s current flood waters of criticism must be addressed first and directly by the company. It’s completely in their power to stabilize and grow, in spite of what’s happened. What they don’t want is to let their critics — and there are plenty — define them. That could leave the company with decidedly fewer “friends” and “likes.”

Thumbnail image courtesy of Katrina.Tuliao and Crunchies2009 via Flickr

Via: Mashable » US & World

Copyright © 2011 TechGatherer

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