The facebook IPO: Did We Over-Estimate the Brand’s Relevance?

It’s hard not to notice the slight smirk on people’s faces when facebook’s struggling IPO comes up.

 

The fact is, we had all begun to believe that the juggernaut was like the Oprah of internet startups: everything little thing she did was magic.

 

However, like Oprah, facebook began to get a little creepy and talk as if they had discovered the formula for world peace.

 

In a recent interview with Charlie Rose, CEO Mark Zuckerberg and COO Sheryl Sandberg tried to explain their business model, and it didn’t seem like anyone — least of all they themselves – could understand it.

 

(transcript courtesy, Charlie Rose Show)

 

Charlie Rose: Is your sense that the future belongs to social networking, that that’s the future?

 

Mark Zuckerberg: I think that a big piece of it is –

 

Charlie Rose: Finish that.

 

Mark Zuckerberg: It’s not everything.

 

Sheryl Sandberg: Yeah.

 

Mark Zuckerberg: I mean, if you think about it, in your own life, right, with all the things that you do, how much — how many of the things that you do are better when you’re doing them with other people or with your friends? Probably a lot. But not everything, but a big piece of that.

 

Charlie Rose: Almost everything.

 

Mark Zuckerberg: And I think that we can help power that. But for all of those things, then, you know, some of them we’re going to build ourselves, right, so the core experience where I can go learn stuff about you, right, based on what you’ve shared, we’re going to build that piece, right. The core piece where you can see all of the stuff that’s going on with all of your friends that they wanted to share. We’ll build that piece.

 

 Charlie Rose: Yeah.

 

Mark Zuckerberg: But the piece where, you know, you go to try to consume a specific type of content, right, I want to see what news my friends are reading. There will be newspapers.

 

Sheryl Sandberg: This is why this matters, right, because we can win along with lots of other people winning.

 

Mark Zuckerberg: Yeah.

 

Sheryl Sandberg: And that is totally different, I think about the strategy of what we’re trying to build.

 

Charlie Rose: What don’t you want — go ahead, finish.

 

Sheryl Sandberg: So we can — if — if news becomes more social, that’s great for Facebook if it happens with our technology. But –

 

Charlie Rose: Because you’re the great connector of the world.

 

Sheryl Sandberg: — it is great for the Washington Post and the New York Times and the Huffington Post and anyone who chooses to use our technology which we make available to every news service out there. We’re not trying to replace everyone or do everything. We want to enable everyone — everything to be more social for everyone else.

 

Mark Zuckerberg: Yeah, I think — it’s actually — it’s a lot more extreme even than you’re saying. I mean, take —

 

Sheryl Sandberg: It’s always more extreme.

 

What’s always “more extreme”? What “it” is seems to vary for Zuckerberg and Sandberg:” it’s” the brand, “it’s” what the brand is doing, “it’s” where the brand is going. Nevertheless, how is that going to change how facebook remains relevant into the future? Was facebook’s stock over-valued because we had all somehow believed that its ubiquity, the very fact that so many people are addicted to it has made it so invaluable? There are plenty of tech companies that believed that about themselves and lost.

 

If anything, facebook has perhaps only just discovered that what began as a college computer experiment has lost a considerable amount of traction. Zuckerberg and Sandberg’s wide-eyed optimism only underscores that there’s a frightening lack of vision and introspection with facebook.

 

Facebook, in the jargon of the industry, is “people-centric,” but an increasing number of people are realizing that they’re kind of getting sick of people and want to begin organizing their information diet with more “topic-centric” networks.

 

Yes, facebook does let you explore topics through your friends and their links. But Pinterest, which facebook conveniently absorbed, is very much in that category, which would lead one to believe that they saw the writing on the wall with their existing model. Pinterest lets you look intelligent and artistic – without words.

 

The fact is facebook is ripe to become a direct marketers dream, with all the up-to-the-second updates of people’s daily lives. They have more information about everyone than can ever be imagined, all because most people can’t keep their mouths shut.

 

Advertisers are still on the fence regarding the benefits of facebook advertising. General Motors pulled ads from facebook (the day before their IPO, no less) insisting that the strategy simply didn’t pay off.  In another crushing blow to facebook’s ego, sources indicate that GM cited better results from Google’s AdSense.

 

So if facebook really wants to prove they can stay relevant and pull those stocks up, they would be wise to start talking strategy – like, now. Never mind that their users will feel duped. Just what did you think facebook was doing this for – as a public service?

 

That may be just be the problem.

 

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