Facebook's $16bn IPO Means Nothing Today
The biggest tech event of the year – if you believe the financial pundits – has been and gone, leaving analysts, shareholders and Mark Zuckerberg to pick through the remains of the Facebook IPO. Seldom have so many gathered to stretch credibility and understanding to talk about so little. In the end, despite stock flat-lining in a way that sent delicious shivers of schadenfreude down the spines of those who still can't quite see the worth in shared contemplation of navels, Facebook has more than $16bn of extra cash in its account. For actual Facebook users though – in fact, for just about everyone, even if they're now a shareholder in the company – the IPO is, so far, gloriously irrelevant.[Image: Associated Press]
Nobody could quite predict what would happen in the IPO, and that's probably what made it so popular a topic. Everybody would love to be an expert – especially in the aftermath of not only the original dotcom bubble, but the more recent economic downturn – and speculating online, in newspapers and on TV and radio about how shares in Zuckerberg's empire could make not only him and his team rich, but the rest of us too, held an inescapable allure.
That Facebook is, by now, a household name made it all the more wonderful. Sure, if Samsung, or Microsoft, or even Google had their IPO over, there'd be plenty of tech and finance press hyperbole, but Facebook has managed to embed itself into non-techie culture. Your mom knows what Facebook is, though she might not quite understand what Microsoft does or why the new Samsung smartphone is whipping up geek frenzy.
One of the more prevalent questions has been why that excitement Facebook mustered came about in the first place: why, in short, anybody cares. Overlook the addictive frottage of punditry at your peril, however. In that way, the social site is no different from, say, Samsung's Galaxy S III, or the Apple television: speculating, rumormonging and generally arguing about what-might-be is perhaps more interesting than the actual news itself. In fact, once that news coalesces into something legitimate – shares are sold, products launched – the core cadre of opinionists often move on to the Next Big Thing.
[aquote]Facebook already had a bulging wallet; now it has more[/aquote]
Facebook already had a bulging wallet of money; now it has even more. In itself, that's not especially interesting. The tech world will really wake up when Zuckerberg & Co. reveals what it will do with all these new billions.
Much has been made of the comparative valuations of Facebook and Apple, with social network skeptics pointing out that Zuckerberg's site is just a place to share anecdotes and photos of your breakfast, while Apple actually makes products that people buy. It's a closed-minded view of value, however. Facebook may not have a physical device that you can walk to a brick-and-mortar store and exchange case for – at least, not yet; the Facebook Phone rumors simply refuse to die away completely – but it does have a service that has embedded itself into the lives of millions upon millions of people.
That degree of engagement isn't going to go away easily. True, it will be perhaps more difficult for Facebook's board to leverage those users into cold, hard cash – recent stats on just how few people consider ever clicking on a Facebook advert or promotional post have likely given those in charge a few sleepless nights, if the IPO itself wasn't proving sufficiently insomnia provoking – but it's certainly not impossible.
TV channels where ticker-tapes dominate the screen will soon move on to fresher financial pastures. For actual users of Facebook, however, nothing is different today, in the post-IPO glow, than it was on Thursday. Their excitement – and, a further orbit out, the rest of the world who will watch as Zuckerberg acquires, challenges or destroys companies, products and services we currently use or own – is still to come. Sixteen billion is a nice, hypnotic number, certainly, but it only really shows its true worth when it's spent on something.