Once upon a time, in the tiny hamlet of Menlo Park, California, there was a company called Facebook.
This company was unlike any other (sorry, make that ‘like MANY others’) in that it connected people from around world through a magical and glorious technical achievement called the Internet.
Everyone loved Facebook:
“Oh my God, it is so easy to upload pictures of my baby!”
“I can’t believe I found all my old high school and college friends so easily!”
“Hey everyone, I’m off to get a coffee – can’t start my day without coffee!”
People from around the world chatted, and shared, and reconnected. There was something really exciting going on in the tiny hamlet of Menlo Park.
But then, one day, because Facebook was growing so so so very large – and its bills were growing so so so much – it needed to somehow make money.
Facebook was so kind that they didn’t want to charge people for the privilege of using its service – so it added advertising. Advertising so tiny that the people of the world didn’t even noticed the ads were there.
“There are ads on Facebook? You know, I’ve never seen one – and I certainly have never clicked on one! Good for them.”
Perhaps Mean Old Mr. Advertiser started to realize that no one was clicking or even noticing his ads.
But little Facebook still needed to get paid – I mean, even a whore has to eat – so they decided to work something out with Mean Old Mr. Advertiser.
Maybe they could somehow leverage their size and sell the personal information of their 900 million users. Would that keep Mean Old Mr. Advertiser off their backs so they could resume their happy life of connecting the world and bringing nothing but joy?
Facebook was so kind to its users that they even added a “Like” button (because “Like” is much nicer than “Dislike” and Coca-Cola doesn’t want to see how many people “Dislike” Coke Zero).
It was so simple, users could either “Like” something or choose not to hit the “Like” button. It was up to the user.
That worked for awhile until the users of the world started to realize what was happening. Many users got angry and felt their privacy was being invaded.
About 15 people actually quit Facebook (while another 100 million signed up).
After a few months, things calmed in the tiny hamlet of Menlo Park and the people on Facebook – to a lesser degree – felt fairly happy again.
But then, one day, Facebook decided that the users of the world needed to share every bit of information about their lives – from birth to even death – and put it all into a very conforming and dizzying glop of data called Timeline.
Mean Old Mr. Advertiser LOVED the idea of Timeline.
Finally, Facebook was thinking like him. Now they got the idea. Mean Old Mr. Advertiser could scour the lives of the people of the world and target them with goods and services that they may or may not enjoy.
And somehow, in just a brief eight years of existence – little Facebook grew and grew and grew and became worth $100 BILLION FUCKING DOLLARS! Oh, goodness, pardon me. (An IPO last year would been insane! What a missed opportunity!… but I digress.)
Well, from here the story gets a little tragic.
The beaten down people of the world and users of Facebook grew so exhausted from the daily overhauls of the site (which were necessary to maximize revenue) that they actually stopped spending time on Facebook – instead reading real books to their children and enjoying the outside world.
Comments started to appear on other websites (yes, there are actually other websites) saying they hate Facebook, are never going back and are quitting.
Poor little Facebook. They just wanted to HELP the world – not FUCK OVER the world.
How could a crappy redesign and a selling of their soul piss people off so much?
It’s just a website after all (one that is on its way to becoming WORTHLESS and must be STOPPED for the good of the world!… one more digression).
I mean, why do the people of the world care so much?
Well, we all know how the story ends.
Disgruntled engineers (and let’s assume an MBA or two) who helped create the chaos from the direction of Uncle Mark and Aunt Sheryl, began grumbling about their need to become millionaires and billionaires like so many of their friends.
The only way to stop them from leaving the tiny hamlet of Menlo Park – and going to, oh, say, the dangerous crack alleys of Mountain View and Cupertino to seek their fortune – was to take the company public.
By selling $5 or $10 billion dollars in stock to the ‘public’ (at a BULLSHIT valuation of $100 billion!) everyone could become rich and (yes) happy.
So at least the employees of Facebook will now be happy. The people of the world, who are seriously beginning to hate Facebook and are either leaving or staying away in droves, are less and less happy every day.
But Mean Old Mr. Facebook couldn’t care less – the users can go fuck themselves.
“Just put your freakin’ family photos in the template we have provided, “Like” the new Coke Zero, play the stupid Zynga games, pay for a movie rental, pay for a music subscription, and keep your stupid mouth shut. We’re not getting to a trillion dollar valuation from pictures of your goddamned baby!”
Mean Old Mr. Facebook is right. The User is wrong.
The moral of the story: Don’t screw your users. They’re the ones that built you up and they’re the ones that will bring you down.
Jill Kennedy – OnMedea
I think they really missed it. How do they grow? What are they to do when they hit 1 billion people but don’t ever hit 2 billion. I will be watching this closely.
Great story, Jill! I totally agree. They could care less about the users. About privacy. About doing anything to the users. Facebook is a big joke. And what’s scary, they are way too powerful.
With timeline now mandatory and investors forcing Facebook to increase profits, we could be seeing the death of Facebook here. MySpace died for a reason. But without those changes they don’t make money. It’s just as you say, Jill, the employees are happy but everyone is not. No regard for those of us that use go there all the time. The mandatory timeline is going to cost them a lot of members.
I agree — and the article, while a bit snark-heavy (but we expect that here), is pretty much right on the money, too. There is some wrong-thinking going on. See, I don’t MIND, at all, receiving targeted ads based on the information I freely provide in my profile. I prefer the idea that the space I tend to ignore, might not be so wasted if something actually catches my eye — and I appreciate that the site needs to be monetized by ads. It’s free to use — so, fine. BUT, it also doesn’t need to make billions of dollars and make a handful of people unreasonably wealthy, either — this advertising model just can’t be so lopsided as to work that way.
MySpace DID die for a reason — but they also did a lot of things right. I had “Johnny Carson” — for example — listed as one of my favorites, and the site offered me the chance to buy “Johnny Carson ringtones.” Now, that was clever — almost. I don’t know what a JC ringtone could actually BE or if it even actually existed. I don’t even understand why people would buy ringtones. But, if they had put a touch more thought into that approach — I might have bought, say, a Johnny Carson DVD.
Facebook has much of the same type of info at its disposal — but mostly it seems to notice my age and my “single” status — and proceeds to pitch me rows of singles sites ads, and not much else. THAT is what they’re doing wrong. I never click on them, and I can’t imagine that many people do. Some singles site entrepreneur probably pays lots of money for those ads, “It’s Facebook! With millions of users!” so why not? Their site probably dies, the owner goes broke, and Zuckerbug and company have his money.
How long before “Mean Mr. Advertiser” realizes that what he’s paying to advertise there, isn’t going to translate into revenues to offset that cost and then some? Better yet — where are all the advertisers-turned-millionaires from Facebook? Are there any?
YOU ARE SO WRONG! This is a screaming buy! SCREAMING! if they put the price out at $40 a share – it will be at $120 by the end of the first day of trading. This is a money maker. 400 million users could leave and there would still be 500 million users! You said on another message board that it isn’t a slam dunk – THIS IS THE BIGGEST SLAM DUNK IN THE HISTORY OF SLAM DUNKS!
this is a very quiet short sale stock. Don’t tell too many people or it won’t race up to $200/share before settling down in the mid-40s or something. Shhhh, please don’t tell SCREAMING BUY!
Hey, I’ve used a special internet tracking device and found that the “SCREAMING BUY” commenter is actually Bernie Madoff writing from the minimum-security “Internet Cafe” at the Butner Federal Correctional Complex in North Carolina! “Burn, baby, burn!,” adds Zuckerberg.
So true. Some people hate Facebook but they will never get rid of it(and you can’t get rid of it). That’s the beauty (if you want to call it that) of Facebook. You may hate Facebook, but I guarantee you check your Facebook at least once a week. And that is plenty for them.
Plus Facebook is so big, and they know they have you hooked, that they just don’t care.
It may fail, but it is going to take a lot for that to happen.
Once a week isn’t enough for them. They need you on there five or ten times a day like the good ole days. Howard stern didn’t make 100s of millions by being listened to once a week for a minute. And if that ever happen he’d be fired. What stock holder says stagnant growth is cool with me? Look at Microsoft. Solid, real company but stock is stuck due to lack of growth/slash lack of sexiness of the 90s. Same with MyFace only they don’t have a real product, no one likes them and sexiness was a flash in the pan compared to MS. I used them to check out corporate new feeds, unfortunately those corporations have either stop posting real info or started acting more like the idiots from high school on there that I avoided then and now. This company has no value. Their ads are irrelevant to the user which is why they need Timeline to focus on your likes.
As for their 500 million accounts or whatever. Many people have 20-50 accounts for whatever silly games they get credits for or however that works. I would not know as I do have half a life.
Question, how can anyone honestly value facebook at such a high level? With a $100 billion valuation, its worth more than Goldman Sachs, with no where near the amount of revenue or profits.
Isn’t social media just like the dotcom bubble, but apparently, no one wants to acknowledge it without first profiting from it.
I love how you take what you want from reality and make up the rest.
You know better than anyone that Facebook isn’t selling personal informations to anyone. Go check it out for your self by creating an ad http://www.facebook.com/ads/create – can you see anyone’s name in it? Data are being aggregated by Facebook. If people just took the time to understand the process, I don’t think they would be pissed that Facebook is telling Coke that X million people live in SF.
I agree on the danger around the corner for Facebook though. These guys need to be careful how they move, they know users hate change so they should really stick with the same profile for the coming years and stop innovating, because we all saw how it went for MySpace.
They’ve been fucking with me about who I choose as friends. They banned me when I had 3,500 plus friends. I’ve had a total of six face book guises. Their algorithms are noxious and Nazi-like! Research has shown that users who click on a Facebook ad are only a tenth as likely to buy as, say, those clicking an ad on Google. I have an outside facebook app called UnFriend Finder that reveals FB Friends are deactivating their facebooks in massive numbers. I can see the uptick in deletions increasing with each passing day. They’re going to fail miserably. I figured out that they want you to leave Facebook up on your browser all the time even when you’re not active. So I began shutting it down whenever it isn’t being used. I hate those bastards and am dying to get even. I know they’re going to fail anyway because they’ve fucked with the customers rather than kissing our asses. I met a lot of people when I had that 3,500 person base of ‘friends!’ I’ve sworn vengeance on FB for finding a pretense to delete that Facebook page with no possibility of re-establishing it. They’re going to fail because they’re ignoring the oldest customer edict ever: We’re always right. I’ve stopped caring what Facebook algorithms do to me anymore because every strike against me is a strike against the Middle Kingdom in Menlo Park itself. Every time they bash me, its one more step to their eventual doom.
You don’t know 3500 people and you were not going to get to know them. I hate it when people try to ad me and I don’t know them, I always mark I don’t know this person which is what happen to you too many times.. It’s even dumber when my very limited profile at FB is off by about 180 degrees from theirs. I mean come on….Where does it say or look like I hunt, like pick-up trucks with eight inch lift kits, Ron Paul, Garth Brooks and am a very conservative christian that gives all the credit to God? Same for the vegan hippies that say down to America and capitalism. It’s clear I think nothing like these people but they want to be my pal. Just to ad one more number.
A large problem with FB is people with too many friends. They encourage this to get more pages viewed. If it did not tell how many friends people would not have an average of 400-700. It would be below 100. I got a real life friend with 1800 friends, he really knows maybe 200 and perhaps 10 would actually do him a real life favor. These idiots keep trying to friend me from high school and I am convinced they must have dropped out in 9th grade. I never heard of 3/4s of them.
I posted this on the wrong item. On the American Idol blog.
100 billion? Because of advertising and personal information? Personally, I think
the market is going to get played by the Facebook IPO. It’ll phase out in less than
three years, which is why Zuckerberg’s taking the company public.
Facebook is going nowhere, there is no real competition…Google+? Yeah right…given Google’s history with privacy, data mining, and Fed cooperation not many core users will defect to there…and certainly not those overseas where Google is known to Cave at the drop of a hat.
You may not like the changes, but Facebook is still the best game in town, and likely will be for at least the next 2-3 years. When FB hits the secondary market not only will FB long time employee’s all be retiring by the droves, so will many who learned their lesson with Google and jump in the deep end opening day.
$40/share? You all wish. Google hit the secondary at $85…with nothing but a search engine, some ad revenue and Yahoo still a competitor, thought dying.
Buy in for FB will be $100-150/share minimum and be a steal at that price; for unlike Google…Facebook is already making REAL money, already expanding, and has no competition at all at the time of the IPO, nor will it have for at least 24-36 months…if ever.
$150/share open….$600+/share within 24-36 months, maybe even higher if we use Google as a template for the first 36 months, $800/share…could be, but I’m in 5 figures day one and out in 24 months.
Google, nothing but a search engine? Their algorithm is leaps and bounds over FB. FB will try to sell a tractor to a punk rocker in NYC and Marilyn Manson tickets to a farmer in Iowa. Google, like FB is creepy and people are leaving it. Bing is now 30% of US search. Personally I think Google is slightly better but much more political and nosy so I use Bing.
A FB minus is people learned their friends are jerk. So it’s not so much that competition hurt their business but FB just grows stale as it has. I do not want to invest in a stale company that’s glory days are behind it.
Waiting for this to IPO so I can short the hell out of it…….
Personally, I think the shorts should stay on the sidelines for a few months. This thing is going to take off like a rocket and not come down to the Earth until two or three quarters after the IPO. Then it’s coming down hard. The question is where will the stock peak – something like $200/share or will it be like LinkedIn and hang around the same area about double the IPO price.
Wait to back up this article with such a bold prediction Jill. “Either the stock will double or it will fall by half!” I’ll be sure to trade on that insight.
Er, replace “Wait” with “Way”
Mark, what was your great insight into Zynga? Or Groupon? The point is – nobody knows anything. Do you remember how many people thought Zynga was going to at least double on day one.
May 25th. The FB IPO aftermath. It took off like a rocket, all right. A North Korean rocket. Poof. Pong. Bang. Oops.
Your article was spot on. FB sold its soul. Greed was running the show in the end. $uckerberg and the FB gang saw the chance for mucho money–now was the time to sell. Reap the rewards and run.
People are tired of FB. It’s lost its novelty. Zuckerberg said in an interview recently, “Nothing’s going to change.” Not sure if that is good or bad, but it says a lot. He is a kid who got lucky with a stolen idea and had backers to keep him going.
Anyway, there are solid Blue Chip companies that actually make decent profits and have enormous assets and great cash flow that an investor can buy. Why buy FB? I don’t get it.
Most people are not aware of the potential of social media yet plus psychologically as humans, most are not willing to change. Facebook and other social media are changing industries and traditional business models-already has started with tech firms including Apple, Microsoft, etc even though Microsoft does not have great products. Innovation is the key these days for most companies to be successful and even for most countries. Especially, low-cost innovations which are coming up from countries like India, China and Brazil. Samsung, Apple, Google, Facebook are few innovators from developed world though Samsung is from an emerging country yet developed 1. Another emerging country that’s not from developing world – Mexico.
facebook may or may not get its IPO (100 billion US$ making it amongst the 52 largest firms in the world) but it has potential. Out of the 10 fastest growing technologies in next couple of years, 2 of them are cloud computing and social media ( http://www.networkworld.com/news/2011/071511-cisco-futurist.html) – these technologies might change the world in the next 10 years – some of them already have. Microsoft though its products are mostly not great, they still know how to make money and they are not only investors and partners of Facebook, they also have cloud computing inside Facebook – MS Doc on Facebook is an answer to Google Docs (not needed to have so many copies of 1 file + can edit the same file by so many people so many times+ no need to store file on any system as it’s there in the cloud and lastly, can type within the cloud itself and not needed to type on device and upload that file though both options are there for both Google Docs and MS Doc app under Facebook). Cloud computing is like email systems (its 1 of the emerging technologies along with social media). Facebook, Twitter, etc are more than just social networks (Twitter and Facebook are both into digital publishing)-Facebook has pages, groups and apps not just for games and videos including music ones but also for news-business,general,updates of firms, finance and investments including real-time stocks, journal articles, etc. Which are the new devices for using apps, social media, etc? smartphones and tablets!!! What do people mostly use on them? services including apps which 1 finds separately or on social networks like Facebook – apps is a new market though bit saturated as there are about 1 billion apps on Android and Apple phones itself. The mobile sector is already worth more than 1 trillion dollars and services like apps whether news, gaming, music, videos, software (via cloud computing), etc nearly 1 trillion dollars worth. Apps, credits (visual money), etc will be how tech and other firms make money-credits already there on Facebook-to see Discovery Channel within Facebook, need those. Also Skype bought over by Microsoft is already there within Facebook. Facebook isn’t just a social network and neither is Twitter and think others also-just like Apple changed the music industry, Facebook and other social media including Twitter, Linkedin, etc will change industries (including Google) – already have started with publishing and media sectors and few others including them being used by health, education, finance sectors, etc. Social media is the in-thing and another emerging technology. Out of the top 10 emerging technologies, 2 of them are social media and cloud computing, both of which Facebook has. Reason why Google wants Google Plus to do well. Also if people think, Facebook forces others, what about Apple? Apple did the same and so did P&G – they are innovators and leading firms these days are innovators. Customer-centric approach alone won’t help as again and again, it’s 1980s and 1990s approach. Now, it’s innovation approach with bit of customer-centric approach – in fact, it’s days of using blue strategy or low-cost innovation-reason why firms from emerging countries are able to challenge firms from developed world and it’s no more globalization-it’s globality or glocalization or semi-globalization (3 terms…..it’s individuals competing with local and multinational businesses anywhere in this world). tata motors, good baby, bharti airtel, embraer, aravind eye hospitals, jaipur foot are few of the innovators from emerging countries challenging developed economies (embraer like singapore airlines are just amongst the few firms doing well including making profits in a loss-making industry ever since deregulation occurred-embraer is the only firm and Brazil the only country to make a successful entry into commercial jet market since 1969). Apple, Google, Samsung, Facebook are few of the innovators from developed world though Samsung is from an emerging country (emerging yet developed country-South Korea….another emerging 1 is Mexico….there are couple more though fastest emerging 1s are from Brazil, China, India and Russia-the former 3 with loads of low-cost innovation). no data is hidden-all available on any database even if it’s charity or not whether it has a database or not-sooner or later, it will be on the database which will then be connected on the internet via the web plus no firm nor organisation removes the data asap-some will still have records even after requests-facebook does have the option of permanently deleting records which occurs after 2 weeks though may take further time like any other firm. Sixth Sense technology- is another 1 – right now in its prototype stage – done by Pranav Mistry, 1 of the world’s leading scientists at MIT. If Sixth Sense technology becomes commercialised, won’t need any devices-smartphones,tablets,etc – more can be seen under http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_technology.html -that time no need for devices like ipad,iphone,etc to view data including boarding time or boarding pass etc-can be viewed on hand or any other surface….same dude has already done mouseless + a pen that can draw in 3D; and a public map that can act as Google of physical world-all these are linked to the gestural technologies (1 place it’s used -xbox, wii, playstation) and gestural technologies another emerging tech.
Linkedin, Groupon, Bankrate, jive software, angie’s list are some of the social media companies doing ok to well since their ipo
A tedious pseudo fable from a pottymouth who offers not an ounce of proof that “people hate Facebook” and millions are leaving.
If this is what passes for analysis, Jill should go back robbing widows and orphans like she did at Lehman Bros. That work was more honest.
Really, Mike? Everyone you talk to and all your Facebook friends are pleased with the service. Love all the changes? It’s only gotten better, not worse? Really, Mike? Go around the Internet, Mike, read blogs and news stories and then read the comments. I’ve read a lot of comments – Newt Gingrich is more loved than Facebook. Live with it, Mike.
I hate being forced into the “timeline”.
I actually like the potty mouth. It’s like sprinkling good seasoning or herbs to a good dish. It will hit your palate in surprising ways.
Stick to your style Jill
Tsk, tsk. Somehow I prefer her potty mouth to your snarkiness. Did you lose much in the IPO debacle, btw, Mike?
This will indeed be fun to watch given the passion from both schools of thought. One side thinking it impossible for FB to fail due to its network effect and then the other side who thinks FB’s failure and eventual demise is inevitable.
Interesting indeed!
Jill, you are just regurgitating what we already know about Facebook. Maybe if you would have used the “F”-word (and I don’t mean “F”acebook) just one more time, your article could have been a little more entertaining… NOT! Here’es a clue… (excessive use of) expletives are not necessary to get your point across… they merely diminish what little value, if any, your article had in the first place. You sound like a jealous little girl. Grow up.
No, I think when talking about Facebook the expletives are absolutely necessary.
Fuck, fuck, fuck…is all I can keep saying whenever I make those RARE attempts these days to try to respond or post a comment on Facebook and that damned BANDWIDTH-HOGGING “Ticker” causes my comment boxes to jumps up and down while I am typing mid-comment. I don’t even like FUCKING posting on FB anymore — they’ve sucked all of the SOCIAL out of this FUCKING “social network!” Fuck, fuck. fuck!!! ;-D
Hey, at the risk of being overly repetitive and outwardly crude (according to TempID’s standards of censorship), I have been asking myself more and more lately why the FUCK was I insane enough to INVEST so much time (like about 4 years of membership) for my Facebook profile and various social causes to only be FORCED FED into the fucking “Timeline” without any choice yesterday??!!! Has Facebook actually driven me FUCKING INSANE over all of these constant UNILATERAL changes? I thinking FUCKING so! ;-D
TempID… you grow a pair too.
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