Facebook - Where to from here?
So the biggest tech IPO is over. Facebook ( FB) at $38 a share has not really set the NASDAQ on fire. Impressions vary from negative to neutral and overall the IPO seems to have been a bit of a whimper, or maybe the stock was priced absolutely perfect as many other analysts have pointed out.
Irrespective of that, where does a company which has only ad inventory to sell, go from here? What does it need to do to hold on or grow its $100 billion odd valuation- and keep investors hooked in ?
The answer can only be in more products/ solutions and diversification. Without that future, the valuation is kind of overpriced.
However, Facebook’s ad model is changing with user generated content being converted and positioned as ads, thereby utilizing the open graph driven content mechanism into an ad machinery.
In this format, social endorsements are being converted into ads. The belief is that this would create a far more organic pull for a product ( thereby more relevance for a brand) than a glitzy ad/marketing campaign.
Facebook has also spent a lot of money in recent times in buying mobile apps and their subsequent eco-systems.
And lately they have started their own developer app community where the emphasis is on building mobile apps.
So clearly they do want to break the mobile barrier.
Apart from that for the near future, Facebook will probably look at these 3 parameters to scale its operations.
- Insight data led advertisement
- Cloud communication
- And a supply chain of digital services which are interdependent on each other and rake in money across different access points of a customers digital and communication ecosystem
The Facebook IPO has not popped, neither has it tanked. When primary markets open on Monday morning, we will all have a clearer picture of where the stock price finally settles.
Either way Facebook now has to re-invent a few things. Just being the social network of choice won’t allow it to manage and grow it’s valuation in the long run.
It has got to ship, more products than free membership and timeline. More products that customers are willing to pay for. And the clock has started ticking.
This is where Yahoo got lost. And Google is trying to find itself.
But growing the $100 odd billion valuation just based on selling ads?