Once upon a time there was a small Start-Up called Facebook…

Posted on February 4, 2012 by

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…which filed IPO this week. And I am still asking myself how such a young company – it has only been 8 years since it was founded! – Can be worth so much money!

I found a nice explanation on Slate saying that the difference of Facebook and Google and amazon is simple:

“What’s different about Facebook is its product: Facebook is us. You go to Google for Web pages, you go to Apple for computers, and you go to Amazon for stuff. What does Facebook give you? Me and you and everyone we know. Or, to quote another movie: It’s people! Facebook is made out of people!”

So as it is stated in Facebook’s S-1, the highest risk in investing is the following:

„If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed.“

But is that going to happen in the near future? I honestly do not think all of us Facebook addicts will leave the social network for another one, like Google+.  And living without it? Won’t happen I guess. Even though Facebook loves implementing changes nobody actually wants or likes, everybody goes with it.

Now, imagine Facebook had to be deleted! What would life be like? Watch the trailer of “The social Network 2” and you’ll know. 😉

 

 

 

How did Mark Zuckerberg get us addicted?

And how did he even make it so far? I assume most of us have watched The Social Network, but that’s not it. TechCrunch has revealed M. Zuckerberg’s 6 ingredients of success:

1. Ambition

To be successful Mark did the right thing: not to show his true ambitions in the beginning, when he was hired by the Winkelvoss twins, but was it ethical to “steal” an idea?

2. Vision

Facebook cannot be called revolutionary, but rather evolutionary since it was the first widely used social network with a clean layout and functions we didn’t know we needed.

3. Execution

“Stay focused, keep shipping”: consistent growth due to additional features.

4. Determination

As Steve Jobs said in 1995: “ I’m convinced that about half what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” Mark had a huge load of determination when launching Facebook, as you might know.

5. Luck

One factor, which cannot be controlled, but definitely happened when Mark met Sean Parker and thus Peter Thiel, his first outside investor.

6. Timing

Although Mark couldn’t control the time, he definitely managed it to his own purposes.

 

Any Future Prospects?

If you ask Jason Hiner, blogger at TechRepublic, Facebook “is a badly overprized photo-sharing and gaming site.”

In his post he explains why he would not buy Facebook stock by giving the following 10 reasons:

1. Its own users have very little trust in the company

2. The site’s ease-of-use is among the worst on the web

3. The user experience doesn’t translate well to smartphones and tablets

4. Teens are jumping to other social networks now that their parents are on Facebook

5. A lot of Facebook’s stickiness is based on games from third party companies

6. Photo sharing is a major part of its activity, but doesn’t generate revenue

7. It has already maxed out its user base in developed countries

8. It’s highly doubtful that it will get a chance to compete in China

9. Its financials look a lot more like Yahoo than Google

10. It has to fight the natural cycle of social networks dying and being replaced

 

 

If you read this whole post I am sure you’ll say: this is all contradictory!

And I agree, it is. Facebook filing IPO made the hype bigger, everyone wants to have their say in it and starts stating why Facebook will keep on growing and the investors will make loads of money or why not.

For me this little insight and the two contradictory opinions resemble most of what I found on the web and from here on we will just see how it goes.

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Posted in: hype, strategy