The big Facebook IPO has us all talking. As the shares drop like a rock this week, an argument of the floor price occupies office water coolers everywhere. But, what troubled us most was not the current falling stock, but rather, a comment from one of our top Android developers here at BNOTIONS, regarding building within Facebook.
As you know, we build a lot of technology through the Facebook API, so worrisome Facebook sentiment has more than traders stressed this week. During a project meeting this morning, our developer (who we will remain unnamed as he is damn good and we don’t want anyone else wining and dining him) stated “I think we should not only have the Facebook login, we should have another option to guarantee longevity. We can’t guarantee that Facebook will be around forever.” (Just like we couldn’t guarantee that great shows like Friends would ever go off air).
It was a statement that stopped the crew short. As Facebook has thoroughly announced they are only 10% built (a statement backed up from our close network with Facebook)— this would imply a long runway. With their initial launch in 2004, 10% up to the recent IPO leaves us with 80 years for the other 90% of the whole to follow. As a developer, I think that is a very decent runway, as far as product lifecycle (if anything, excessive in a high tech world when taking into account Moore’s Law).
But our ‘unnamed’ developer has a strong point, negative sentiment around the Facebook brand due to the falling IPO shares can translate in many different ways. If people don’t trust or believe in the brand, there is always a negative impact in more ways than trading on the public market. Concerned stock brokers, concerned developers, and concerned marketers (GM Doesn’t “Like” Facebook, Drops Ads), are a major part of the Facebook ecosystem— all with a current pretense of concern. After all, they are the people behind Facebook’s current revenue, not the users.
But, with eyeballs, you create value. At least, this is the belief in Silicon Valley. In many ways, we believe this too. After all, the people who use our products are who we care about most, as they give us the reason to do what we do. In Facebook’s case, this is no different, except that when you build a corporate behemoth, revenue starts to really matter. Therefore, the people who provide that revenue stream, matter… a lot.
The question we had this morning after our concerned developers comment was whether this is just a statement of timing or a real concern for us as Facebook developers (revenue providers)? In light of the question, we took a look at the social media IPO’s that kicked off the initial social frenzy. Looking back, we get a lot of commentary regarding the dotcom bubble, although, we don’t currently much resemble it (some aspect, yes).
Of the social web, Linkedin kicked off the social IPO with a healthy start rising “171 percent in their first day of trading,” according to Reuters, May 19, 2011 NYSE debut release. Although, not as triumphant as Linkedin, Zynga found themselves “from a $20B valuation to $8.9B in five months (Venture Beat, Kyle Orland),” perhaps a trajectory path Facebook is more likely to follow. Although, Zynga holds a lot of cash for reinvestment, something many investors would say more valuable than the current Zynga price depicts. But neither of these past events can give us an accurate look at Facebook’s future of concerns, as they are all drastically differing companies for the most part.
Since we don’t exactly know all that is going on in Facebook, as far as development strategy, we decided looking at the others was not necessarily an accurate depiction of what is to come. Is Facebook going out of business? Certainly not. Will we stop developing on Facebook? Certainly not. Upon, looking at the others, the only conclusion we perhaps reached is that this ride may be volatile, not that Facebook will not be a powerful brand for many, many years to come (double negative grammatically, makes a positive…)
Jenna Hannon | Director of Marketing | @JennaHannon