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Facebook isn’t failing; no matter what investors say

I’ve been a Facebook user for many years. I like the platform the social networking site offers me, my friends, work-colleagues and more importantly the channel audience. Recently Facebook has received a lot of negative reaction towards its performance on the stock market.

Since its IPO two months agoFacebook has been battered by investors in public. Facebook’s stock is tumbling as a result. Meanwhile the company is putting its focus not on Wall Street but on developing a mobile version of Facebook that is more pleasing to users than then have now. Conversely investors want Facebook to focus on driving more profits, which gets the stock up and makes them money.

Another issue is Facebook’s more than 900 million users. That’s a big number for sure but the site is pretty much tapped out of capacity. That means it will not be growing its user base dramatically. This is another red flag for investors.

The company and its IPO have been overhyped for years. The hit movie The Social Network helped and hurt the company at the same time. The buzz around Facebook would get the retail investor interested. That only leads to speculation. Google faced the same challenges. But Google got an IPO fairly quickly, while Facebook leaders did not push for an IPO for many years. Google struck when the iron was hot and it worked for them. Speculation drives the IPO price up to levels it might not truly have earned in Facebook’s case.

WhatFacebook and CEO Mark Zuckerberg are facing now is something they have never had to deal with before and that is expectations. Investors want and demand CEOs and other top flight executives to maintain and enhance shareholder value. It’s that simple. I don’t know Zuckerberg but given his appearance at Wall Street wearing a hoodie he does not strike me as a fellow who worries about maintaining and enhancing shareholder value.

But this will be part of his job from now on. I applaud Zuckerberg and the Facebook team for not buckling under the pressure. It should be noted that users have not left Facebook en masse because of its falling stock price.

The mobile Facebook application is a priority as I see it. Facebook has to get this right. Zuckerberg can worry about investors at another time.

Investors are complaining about Facebook’s performance, but what they don’t understanding is that Facebook has satisfied customers. Users aren’t leaving Facebook because the site is a useful tool in getting your message out as an individual or as a group. Investors should only blame themselves. They took a risk and it hasn’t worked out the way they wanted. That’s too bad for investors. But that’s the risk they took and it has nothing to do with the great service Facebook provides.

Five quick hits before I go. Synnex Canada is looking to hire someone for its Visual Solutions team. The distributor is looking for a Digital Signage / Pro AV Channel Development Manager.

Start up iNovo Broadband Inc. has hired Cisco VP Michael Harney as its new CEO. Harney was running Cisco’s service provider video technology group.

IronPlanet has hired Sue McGregor as managing director for Canada.

Ubiquity Corp. has added Jonathan Eubanks to its team of engineers as Executive Vice President over Ubiquity’s newest division, Immersive Online. Eubanks comes from Warner Bros. Interactive.

With the company’s recent Dream Vacation contest, CDW Canada customers who refreshed their technology were automatically entered for a chance to win a dream vacation prize. The contest winner is North Rim Exploration Ltd., based in Saskatchewan. “North Rim is committed to providing innovative, leading-edge solutions to our clients and for supporting our employees,” says Audrey McMillan, Chief Financial Officer for North Rim Exploration Ltd. “We have and will continue to invest significantly in our information technology infrastructure in order to accomplish that goal.”

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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