Facebook And The Disappearing Valuation (A Fairy Tale)

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyOnce 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.

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyMaybe 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.

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyAnd 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.

1000Memories, Accel Partners, Amish Jani, Andrew Hyde, Andrew Mason, Andy Sack, Ashton Kutcher, Aydin Senkut, Ben Silverman, Bin 38, Bob Davis, Bob Iger, Brad Feld, Brian Kempner, Chris Hughes, Christopher Steiner, Dan Nova, Daniel Gaisin, Danielle Hootnick, Dave McClure, David Brown, David Cohen, David Kirkpatrick, Demi Moore, Demo Day, Diego Gutierrez, Dustin Moskovitz, Edmond Yue, Eduardo Saverin, Emmett Shear, Eric Lefkofsky, Fergal Mullen, FirstMark Capital, Founders At Work, Francis Duong, Gaurav Tewari, Gerald Levin, Gerald Poch, Greg McAdoo, Greylock Partners, Harjeet Taggar, HBO, Highland Capital Partners, Irena Goldenberg, Jared Polis, Jeff Bewkes, Jeff Weiner, Jeff Zucker, Jessica Livingston, Jessica Mah, Jill Kennedy, Joanna Shields, John Hsin, John Palfrey, Jon Miller, Jr., Justin Kan, Justin.tv, Khan Manka, Larry Wilson, Laurence Albukerk, Lawrence Lenihan, Li Ka-shing, Loopt, Manish Patel, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, Matt Nichols, Michael Arrington, Michael Gaiss, MySpace, Nick Marsh, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Paul Cianciolo, Paul Graham, Peter Bell, Peter Thiel, Reddit, Richard de Silva, Richard Heitzman, Rick Heitzmann, Robert Morris, Ron Conway, Rudy Adler, Rupert Murdoch, Sand Hill Road, Scott Shane, Scott Switzer, Sequoia Capital, Sergey Nazarov, Shabbir Dahod, Shawn Broderick, Sheryl Sandberg, Sterling Phillips, Sumner Redstone, Tapzilla, TechCrunch, TechStars, TextPayMe, Toy Story 3, Trevor Blackwell, Y Combinator, google, Eric Schmidt, Tina Brown, The Daily Beast, Barry Diller, Dan Lyons, Google Smear campaign, Burson-Marsteller, Chris Soghoian, Jim Goldman, John Mercurio, Mark Pincus, Zynga, SpotifyBy 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.

Accel Partners, Ben Silverman, Bob Iger, Chris Hughes, David Kirkpatrick, Dustin Moskovitz, Eduardo Saverin, Gerald Levin, Greylock Partners, HBO, Jeff Bewkes, Jeff Zucker, Jill Kennedy, Joanna Shields, Jon Miller, Khan Manka, Li Ka-shing, Manka Bros., Mark Cuban, Mark Zuckerberg, Matt Cohler, MySpace, Nicolas Carlson, OnMedea, Owen Van Natta, Paul Buchheit, Peter Thiel, Rupert Murdoch, Sheryl Sandberg, Sumner Redstone, Toy Story 3Jill Kennedy – OnMedea

 

 

 

 

 

175 Replies to “Facebook And The Disappearing Valuation (A Fairy Tale)”

  1. FB is a big, invasive waste of time that puts people at risk by displaying personal info to strangers. Companies are starting to look closely at your social profiles as well – so you have to be careful what you put out there. Don’t put a photo of you smoking a cigarette out there. Could cost you a job or a life insurance increase.

    Unfortunately FB is best used as an idealized ‘fake you’. Load it up with photos of you doing positive things in the community and how you want to be viewed by an potential employer/insurer. Don’t post a rant belittling the kicker after he misses a big FG. His cousin might be in HR reviewing your resume and social profile.

  2. FB’s best days are behind itself.They don’t give a toss about people or their privacy. There is a growing number of disgruntled users on Facebook…the recent changes, and being forced into Timeline bullshit.I won’t be partaking in the festivities when they IPO this trash.These guys are greedy fucking pimps. period.

  3. Jill, this is a very important point of view. I found your post by your comment in ComputerWorld blog.
    I think the privacy + UX changes in facebook, as well as other services (like google ones) will be the worst issue in gorvernance this year for them.
    But in the other side, I have these friends like many others that don’t know how to live without FB. They’re even able to pay if necessary to keep their profile and posting “live”.

    I would also say that I was really disappointed when FB and Twitter came with advertising based business models. Zero innovation after all. Some say FB is experimenting with “promoted” stories (ads) on the top of our timelines (http://communitiesdnablog.com/2012/01/16/seguirias-usando-facebook-con-anuncios-en-tu-timeline/).
    cheers,
    @RolandoPeralta

  4. Dear Jill,

    I have enjoyed your articles, as I have recently discovered you, but was wondering why such a beautiful and at time articulate woman uses the rather non-redeaming curse words? Sinbad the comedian told the story of how he cursed at his first show where his father, a preacher, attended and let’s put it this way he never cursed in a show again. I’m not telling you to change as this is more of a curiosity and why assertion. Thanks for the stories as I will continue reading as this is my choice.

    Cheers

        1. Um…..FYI Jill…

          Look at your header image on this site. That graphic of the two people….? Um, that looks rather “odd.”

          I would consider changing it.

          Not sure what you were going for with that!

          O_O

          1. What’s the problem?

            I see the pictures and style only the way Jill expresses herself. And I like it!

  5. A big payday for a guy who takes your identity, sells it, (marketing identity that is)
    takes his friends idea’s, thne shuts them out,
    then takes another friends startup money, shuts him out!.
    Now he will take your money. and then guess what?
    Uh-huh

    1. That is so true. This guy is a crook. I hate so many things about FB. Companies should be against it. My employees used to waste so much time and we didn’t know what was happening. We blocked FB on our server and suddenly productivity rebounded. This company operates like a virus.

  6. The problem with our system, growth. How can a company that produces nothing but targeted ads keep growing?

    See MySpace for the answer.

  7. This IPO is ridiculous. Anyone who bought into this dot.com bubble 2.0 needs to have their head examined. Way over valued. There’s already starting to be a social media backlash due to privacy concerns (especially facebook’s ever changing policies) and new platforms every day that are going to compete with it.

  8. FB is like Hollywood when they can’t come up with anything new; they do a retake of an old movie. Yes its redux of the 90s .Com era all over again with a new wave of suckers being born every day

  9. $100 Billion? 100:1 PE ratio?

    I like Facebook but hard to imagine an upside there.

    $100B is the same value as Verizon, Cisco, Pepsi or McDonald’s.

    1. These decisions are made rationally. People just buy what they like and they like what they know. The market shouldn’t be a Ponzi scheme, but it is.

  10. Loved the article and so on point. It will see the demise now that it will become a publicly traded company. Have to please the shareholders so sell that personal information. Don’t worry about the damage it will cause down the road. Quit FB many months ago.

  11. Interesting view, and I concur that all this about FB is BS.

    Their user numbers are way overinflated – they may have had 800 mil sign up for FB, but REAL users is nowhere near the “half of those” that they are claiming.

    Have you ever tried and delete your account?
    Can’t do it – you exsist forever in FB (or at least until FB fades into the internet abysis)

    Interesting that you support FB with a “Like” button on the top of your pages.
    But thank you for not requiring us to sign in with a FB account information to post a comment as most publications have lemminged the populous.

  12. Hello Jill,
    I saw your review on TechCrunch and thought I’d share this with you and get your take /blog on it.

    There’s a new social networking site called AboutMe247.com that is making all the right moves. The social networking site is everything you are accustomed to plus MORE.  But more importantly, they built a firewall between users and advertisers, meaning a less intrusive experience with products and services from advertisers, permitting subscribers to keep and secure their privacy information to themselves.  And the best part is, it’s FREE.

    Respectfully

  13. “…instead reading real books to their children and enjoying the outside world.”

    I was with you until you wrote that. Now THAT is a fairy tale.

    Anything that requires efforted input from the person doing it, aside from working out to look hot (and not for health reasons), just isn’t going to happen from people today. It’s just not the way people are anymore. To people today, “self-improvement” means how to make more money to afford that five-bedroom house and the Porsche.

  14. Bravo….Bravissimo I agree 200% w/ every thing you’ve written about FB. There’s 1 problem w/ quitting FB though even though I want to badly.FB gives me just a tiny little connection to friends,ex colleagues, associates & relatives that I’d most likely have absolutely no contact w/ whatever.So here lies the enigma which is wrapped in a conundrum.What to do?? What do I do Ms.or Mrs.Kennedy??Any suggestions?? I just stumbled upon u & your little site y I’m very impressed.So far it looks like you’ve hooked another peruser, congrats.

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