FB is the stock symbol for Facebook on the New York stock exchange. This month Facebook launched its IPO (Initial Public Offering) inviting investors to buy shares in its company. Every newspaper and television network around the world was buzzing with this news and the excitement for some was epic. The 28 year old baby faced founder Mark Zuckerberg opened the day's trading by ringing the bell on his California company campus surrounded by a herd of his beloved employees. The cheer and optimism was palpable as the company that almost replaced the telephone hoped to rake in $5 billion in its initial stock offering. The estimates and analysis from a few days before were guarded but the expectations were all over the barometer. The company was valued at $100 billion dollars, even though it had only made $3.8 billion in revenues in 2011 and had only 3500 employees. The IPO was destined to be historic.
Then reality struck. When trading began on May 18th there was a mad rush and the shares priced at $38 began to move in gigantic volumes. The computer networks that execute the transaction on the stock exchange hit a snag. The requests were not satisfied in time, and by end of trading day the share value was just a few cents above the debut price. The next day news about the technical glitch and rumors that the giant bank Morgan Stanley had over valued the company and key information about the company was only made privy to a select few made the market nervous. The share price took a tumble ending below $30 today, losing 24% in value since the IPO. Angry investors lodged lawsuits against Nasdaq (the stock index) and other parties involved, claiming deception, insider trading, impropriety and pure negligence. While a number of people did become wealthier at Facebook, it sure did not go the way they hoped it would.
Facebook which only started eight years ago as a prank on the Harvard University campus, has come to dominate the lives of close to a billion people around the world. With clever technology, which for the most part already existed, it was able to create a vast network by allowing people to communicate with each other without impeding that process by overt advertising. With a revenue model that relied on subtle advertising, it was able to position itself as a company that could be the platform for future commerce and human interaction. In eight years it launched an IPO hoping to rival giants like Apple, Google and Microsoft. Facebook had very little technology to sell and so it banked on the 900 million eye balls it had accumulated. Apple, Google and Microsoft actually built tangible products which transformed the way we live. Facebook had only transformed the way we say "Hello".
The hype around Facebook from the beginning was overblown. So overblown that even a Hollywood movie was made about it. The shenanigans of golden boy Zuckerberg and his fellow cohorts quickly became Silicon Valley lore and the post Jobs/Gates generation that would shake up the world was ushered in. Soon Facebook took over the planet with a storm and the term "Social Networking" became ubiquitous. And the users of Facebook entered a bubble where the norms of private and public interaction began to be redefined and the "global village" seemed to grow smaller. Friends were finding lost friends, protests were being organized, impromptu flash mob dances and rave parties were being planned, people suddenly found hours in their daily life to spend in front of a screen and even revolutions were being triggered. Today Facebook has become an unstoppable juggernaut almost to the point that if you are not on Facebook you do not exist.
There is no doubt Facebook is all pervasive and people use it to define their identity by exposing their lives on it. For those who feed off of it, it may seem therapeutic. For those who use it just as another business or personal calling card, it just means that, another channel to stay connected. And for others who reveal every second of their lives, it is an obsession. And when the lines between the user and technology begin to blur, there are unintended deadly consequences and in the recent past there have been many. For Facebook the more personal information that it can collect from the user, the more profitable and powerful it becomes. While opening an account on Facebook one might think it is a free service, but it is not. You are paying for that service with your personal information. That is the currency that makes Facebook the $100 billion company that it thinks it is.
In the Hollywood movie made about the Facebook founder titled "The Social Network", a pivotal character named Sean Parker makes a statement which has come to define our world to some extent. He says "We lived on farms, then we lived in cities, and now we are going to live on the Internet!". It is this belief that drives Facebook and many other companies to battle it out and grab as many eyeballs as possible. Facebook recently bought a fledgling company called Instagram for a billion dollars. It was the eyeballs they were after and not the product that the company made. In a new book titled Digital Vertigo: How Today's Online Social Revolution is Dividing, Diminishing and Disorienting Us author Andrew Keen warns us about the slippery slope users of social networking websites are on. He cautions that "social" behavior on websites like Facebook could have adverse effects that have not been fully considered or understood yet. Questions of privacy, responsibility and freedom lie at the heart of this discourse. He says "the more we put ourselves on the network, the more we lose ourselves". The people who are behind building companies such as Facebook are counting on us putting ourselves more and more on the network. One's vulnerability is at the core of their business model.
The digital world is uneven. Access to the Internet is the privilege of the wealthy. But as mobile devices like the cell phone become mini-computers accessibility to the Internet becomes more viable on a broader scale across the globe. And the possibility of tracking an individual's every move becomes that much more easy, as long as the device is kept on. The smart phone, as they call it, offers conveniences never imagined before, but it also allows the person to be under surveillance at all times. And it is the data collected from that surveillance that will build our world within which we will become insatiable digital consumers. As James Gleick hypothesises in his new book The Information: A History, A Theory, a Flood, we would become the information. And that is the dream companies like Facebook are chasing and engineering.
It is easy to conjure up an Orwellian world in an age where technology infiltrates every aspect of our lives and seamlessly lodges itself promising a better world. The challenge is to be aware of it and draw the line so that the "social network" is made up of real people and not virtual ones. And solitude is celebrated and cherished as being essential to the human social condition. While Mark Zuckerberg may not have been happy about his share price this month, I am sure he was happy about changing his Facebook status from "single" to "married". And I hope his wife is a real person and not friend number 639. It is what it is.
Then reality struck. When trading began on May 18th there was a mad rush and the shares priced at $38 began to move in gigantic volumes. The computer networks that execute the transaction on the stock exchange hit a snag. The requests were not satisfied in time, and by end of trading day the share value was just a few cents above the debut price. The next day news about the technical glitch and rumors that the giant bank Morgan Stanley had over valued the company and key information about the company was only made privy to a select few made the market nervous. The share price took a tumble ending below $30 today, losing 24% in value since the IPO. Angry investors lodged lawsuits against Nasdaq (the stock index) and other parties involved, claiming deception, insider trading, impropriety and pure negligence. While a number of people did become wealthier at Facebook, it sure did not go the way they hoped it would.
Facebook which only started eight years ago as a prank on the Harvard University campus, has come to dominate the lives of close to a billion people around the world. With clever technology, which for the most part already existed, it was able to create a vast network by allowing people to communicate with each other without impeding that process by overt advertising. With a revenue model that relied on subtle advertising, it was able to position itself as a company that could be the platform for future commerce and human interaction. In eight years it launched an IPO hoping to rival giants like Apple, Google and Microsoft. Facebook had very little technology to sell and so it banked on the 900 million eye balls it had accumulated. Apple, Google and Microsoft actually built tangible products which transformed the way we live. Facebook had only transformed the way we say "Hello".
The hype around Facebook from the beginning was overblown. So overblown that even a Hollywood movie was made about it. The shenanigans of golden boy Zuckerberg and his fellow cohorts quickly became Silicon Valley lore and the post Jobs/Gates generation that would shake up the world was ushered in. Soon Facebook took over the planet with a storm and the term "Social Networking" became ubiquitous. And the users of Facebook entered a bubble where the norms of private and public interaction began to be redefined and the "global village" seemed to grow smaller. Friends were finding lost friends, protests were being organized, impromptu flash mob dances and rave parties were being planned, people suddenly found hours in their daily life to spend in front of a screen and even revolutions were being triggered. Today Facebook has become an unstoppable juggernaut almost to the point that if you are not on Facebook you do not exist.
There is no doubt Facebook is all pervasive and people use it to define their identity by exposing their lives on it. For those who feed off of it, it may seem therapeutic. For those who use it just as another business or personal calling card, it just means that, another channel to stay connected. And for others who reveal every second of their lives, it is an obsession. And when the lines between the user and technology begin to blur, there are unintended deadly consequences and in the recent past there have been many. For Facebook the more personal information that it can collect from the user, the more profitable and powerful it becomes. While opening an account on Facebook one might think it is a free service, but it is not. You are paying for that service with your personal information. That is the currency that makes Facebook the $100 billion company that it thinks it is.
In the Hollywood movie made about the Facebook founder titled "The Social Network", a pivotal character named Sean Parker makes a statement which has come to define our world to some extent. He says "We lived on farms, then we lived in cities, and now we are going to live on the Internet!". It is this belief that drives Facebook and many other companies to battle it out and grab as many eyeballs as possible. Facebook recently bought a fledgling company called Instagram for a billion dollars. It was the eyeballs they were after and not the product that the company made. In a new book titled Digital Vertigo: How Today's Online Social Revolution is Dividing, Diminishing and Disorienting Us author Andrew Keen warns us about the slippery slope users of social networking websites are on. He cautions that "social" behavior on websites like Facebook could have adverse effects that have not been fully considered or understood yet. Questions of privacy, responsibility and freedom lie at the heart of this discourse. He says "the more we put ourselves on the network, the more we lose ourselves". The people who are behind building companies such as Facebook are counting on us putting ourselves more and more on the network. One's vulnerability is at the core of their business model.
The digital world is uneven. Access to the Internet is the privilege of the wealthy. But as mobile devices like the cell phone become mini-computers accessibility to the Internet becomes more viable on a broader scale across the globe. And the possibility of tracking an individual's every move becomes that much more easy, as long as the device is kept on. The smart phone, as they call it, offers conveniences never imagined before, but it also allows the person to be under surveillance at all times. And it is the data collected from that surveillance that will build our world within which we will become insatiable digital consumers. As James Gleick hypothesises in his new book The Information: A History, A Theory, a Flood, we would become the information. And that is the dream companies like Facebook are chasing and engineering.
It is easy to conjure up an Orwellian world in an age where technology infiltrates every aspect of our lives and seamlessly lodges itself promising a better world. The challenge is to be aware of it and draw the line so that the "social network" is made up of real people and not virtual ones. And solitude is celebrated and cherished as being essential to the human social condition. While Mark Zuckerberg may not have been happy about his share price this month, I am sure he was happy about changing his Facebook status from "single" to "married". And I hope his wife is a real person and not friend number 639. It is what it is.
