Zuckerberg and the Facebook Zombie Apocalypse
Zombie Apocalypse for Facebook Stock Prices in the Future?
CYBERSPACE - No, this is not another thin piece about bath salts and the zombie apocalypse. As the Internet continues to discuss and be fascinated with a zombie apocalypse, there are some ways that an event like this can be connected to the tech sector. Yes, Facebook stock. Ever since the FB IPO, many people have been wondering exactly what happened.
If you have paid attention to the news recently, you know that Facebook is being sued - at least twice. Whether it is the Facebook IPO fiasco or FB privacy concerns, a lot of people are coming forward to say they are not happy with the behemoth social network. And users are not the only ones. Just prior to the IPO, GM announced they were stopping $10 million of advertising on Facebook.
This may be a "drop in the bucket" for a company that brought in just shy of $4 billion in revenue in 2011, it may be a sign of a wider problem Facebook is going to be facing. Some have reported that Facebook may not be as worth as much as $100 billion (roughly the same as Amazon.com) and many, many times the annual revenue of the relatively new social network company.
There are quite a few differences between Facebook and Myspace, but there are similarities as well. While it was a feat to attract 900+ million users to a single website, there are some who are not sure about the accuracy of those numbers. With so many fake Facebook accounts set-up just to market products or spam the Internet outside of Facebook's advertising model, one has to wonder how many of their reported 900+ million users are actually real people and not spammers or automated software.
Facebook and many other websites are constantly fighting spam, but for Facebook it may be like a zombie apocalypse in some ways. With hordes of brain eating people lumbering to Facebook to take their own piece of Facebook's action - the network of hundreds of millions of people - Facebook will begin to come apart at the seams. And it seems that may happen sooner rather than later.
Putting aside the fact that Facebook stock prices have not reached the $38 per share level they were first released to the public at last month, there are other signs that Facebook may not be the super company they are made out to be. Over at the San Francisco Gate, they have an interesting piece comparing Google and Facebook's revenue models when it comes to advertising.
In our newsroom, someone threw out a good analogy for Facebook's ad business*: It's like you're at a party, standing around, talking to your friends, and someone made the posters on the wall advertisements. Maybe you'll look at them, but they're not really what you're there to do.
Google, on the other hand, is like you're walking through a grocery store looking for whatever you need and the advertiser gets to jump in at the last second and offer you what you're looking for [SIC].
So whether it is zombie investors or zombie users of the giant social network, there are many signs that a zombie apocalypse will be the downfall of this company. While it may be remembered for years and years to come as a company that shook things up, they may have become too big not to fail.
Not many people noticed, apparently, but Reuters ran an interesting piece on Facebook Chief Operating Officer Sheryl Sandberg speaking to Harvard University students shortly after the Facebook IPO. While it was only "a crowd of students and their families," according to Reuters, her remarks toward the end of her speech were noteworthy.
Sandberg, who visited her alma mater with her parents and two children, only once made reference to the IPO in her speech. After urging the graduates to use Facebook to stay in touch, she said: "We're public now, so could you please click on an ad or two while you're there."
It would be interesting to hear what a Facebook advertiser (who can pay per click for Facebook Advertising) thinks of the COO's statements. The Register in the UK picked up the story, but not too many in the online advertising or online marketing fields have picked up on it.
While the COO of Facebook asking students to click on ads was most likely an end of the speech joke, it does raise some serious questions. Over at Forbes.com, they are asking similar questions about FB.
Tim Worstall, a Contributor at Forbes.com wrote, "Just to be clear here: I do not think she was encouraging click fraud, it was a joke. But it’s the sort of joke that a senior executive of a public company probably shouldn’t really be making."
Facebook has been struggling with making money from people adding status updates from their phone instead of via the website on a laptop, netbook or tablet computer. There are also some fears that game developers like Zynga may bypass Facebook on the smartphone to keep more of the revenue for themselves.
PC Magazine wrote:
Furthermore, as The Wall Street Journal points out, Facebook receives a disproportionate amount of revenue from Zynga and other game developers. That works just fine on the desktop. But on smartphones and tablets, Facebook hasn't yet managed to create a platform that will lure those developers into essentially residing within Facebook, rather than writing their own apps for iOS and Android and keeping all the revenue. One does not launch Facebook's mobile app to play games like "Mafia Wars," and it looks like this won't be the case for several years.
This may be why Facebook is working so hard to get into the mobile market with a possible Facebook phone on the horizon in 2013.