You know what hurts? Being wrong, that’s what hurts. Not just a little wrong, but $85 billion wrong.
Five years ago I laughed — dare I say chortled — over the idea that Facebook was worth $15 billion. Now it’s queuing up for the biggest Initial Public Offering in tech history, at $100 billion valuation. Man, do I feel silly.
According to a report from the Wall Street Journal Friday, this long-anticipated stock moment is happening next week. Looking at Facebook’s recent moves, I can believe that: They stopped secondary trading, then went from gradually rolling out Timeline across the globe to saying “it’s coming now to everyone! You have a week!” Just prior to that, it unveiled a new collection of Timeline Apps just to show it’s serious about this whole Facebook Platform thing.
This Facebook, the one I and nearly a billion others now use, is almost unrecognizable compared to the 2007 version — a three-year-old social network that accepted a $240 million investment from Microsoft in 2007. Back then, it was really just a place to connect with old friends.
We early users shared random updates, but there was nothing about Facebook that made it a must-visit destination. Random ideas, such as giving people $1 virtual gifts, bordered on silly. The big social interactive moment revolved around actions like Poke — a far cry from the Facebook gestures unveiled last year.
Back then, I had already seen lots of social platforms come and go. Remember Second Life? It was incredibly hot. Remember MySpace? Hotter than hot. Both services still exist — in deflated, post-hype forms.
The Facebook rise, though, has been different. I wasn’t just wrong about Facebook, I deeply underestimated its founder Mark Zuckerberg. Facebook users may often complain about Facebook changes; I call it the “Who moved my furniture?” effect. But like a shark that must move to survive, Facebook’s’ steady stream of updates and innovations have not only kept it alive, but growing effortlessly. It is a global social shark, gobbling up new users wherever it swims.
Five years ago, I could never have anticipated Facebook’s growth or its transformation into platform for doing things by yourself and with friends. Facebook wants your activity (reading, watching movies, listening to music, tracking a State of the Union speech) on the network, live, when you do it, so others can engage in real time.
Users may grouse about the privacy implications of frictionless sharing, but there is a reason Zuckerberg made it this way: if it’s easy, it will be done. Saying “yes” once instead of a thousand times is the difference between walking through an open door and pushing your way through a rosebush. One is easy, painless and repeatable, the other is death by a thousand cuts.
Facebook faces hurdles, to be sure. Increased competition from Google+ and Twitter is likely forcing the IPO moment. Plus, the government and vocal minority will not stop pressing Facebook on privacy issues, and I do believe that growth in its home market has slowed a bit.
On the other hand, $10 billion — the amount Facebook will see from this IPO — is a lot of scratch. Yes, some people will get very rich, Zuckerberg in particular. But the chief Facebook Geek has said he’s not interested in the wealth, and I believe him. For Zuckerberg, winning has always been more important than money.
I expect a lot of that money to get poured back into Facebook. We’ll see new innovations and an acceleration of the Facebook-as-platform program. Acquisitions should increase, and Facebook may even expand into full-blown content creation. I can see it now: The Facebook TV network!
Over the years, I’ve watched many companies transform when they went public. Microsoft’s IPO in the mid 1980’s not only helped create a bunch of young millionaires, it also helped turned Windows from a disappointing also-ran into the world’s dominant operating system.
In other words, all things are possible when you have money, and Facebook is going to have lots of it. And I’m willing to admit that it’s worth it.
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