I’m sick of being asked whether I think Facebook (FB) is a good or a bad investment. So to put an end to the wondering, here goes — I think its a bad investment — here’s why.
1) Facebook used to be about ME. My page, My wall, My pictures, My friends, My likes. Now – its about everybody else (and more specifically everybody else’s friends). The updates I care about are impossible to find because FB curates them into some sort of buzz flow rather than sequential flow. My FB feeds also have so much news/stuff about “friends of my friends” that its almost like random walks through twitter, flickr and youtube. A diversion perhaps but certainly not essential — or even stuff that pertains just to me and my friends.
2) FB is fascinating when you first join — building a brand new view of you and your life, connecting with your relatives, your new friends, finding old friends — like discovering a batch of old holiday letters and photos you never opened but now can dive in on a quiet night and reflect on their lives, and your own. As time rolls on, seeing this weeks photo of your kid’s labrador, or watching a video about a cause you didn’t know about (and somehow have lived this long without caring about it anyway) it takes on a feeling somewhat like a chore. The 1000th time someone asks you to make your home page some political or religious message that they embrace, it even becomes downright annoying. Everything and everyone has a half life. FB does too and its passed it.
3) Information sources and platforms are getting narrower and more focused — FB is going the opposite (and wrong) direction. Think about the way you communicate and get communicated to. Emails vs text messaging/tweets. Newspapers vs news feeds. I don’t use Google to find articles about fishing — I use Google to find articles about salt water fly fishing in the upper gulf right now. Laser like focus with very tight content and expert circles. FB is now like sticking your head inside a blender of a swirling mass of all kinds of stuff – only a small percentage is interesting or personally relevant. And no — I don’t care that a friend of your friend found a video on skateboarding funny.
4) FB is financially supported by ads. I don’t think I’ve ever clicked on a FB ad. Maybe its generational I don’t know — GM apparently doesn’t think this is very powerful either as they just reportedly dropped a $10 million per year FB spend. My non-scientific poll of 20 somethings indicated they clicked on a FB ad “occasionally”. Sounds more like throwing darts at the stock page than having real insight or interest.
5) FB is valued at 100 times last years earnings. Really – and they already have 800 million active users! If 100 times earnings isn’t outrageous enough — how are they going to support this multiple, growth wise, going forward ?
FB was unique and is still semi-cool. I’m glad the founders and early investors are making some financial smack. Good for them. America’s a great place. But they’re selling — and selling BIG. That should tell you something too!
Don’t waste your money on Facebook. Cheers. DC