This morning Facebook, one of the most highly anticipated IPO's in history, began trading on the NASDAQ. One question I hear asked frequently is "How can Facebook make any money when there is no charge for subscriptions?" People are constantly worried that this format will change, and somehow this free party will grind to a halt. The standard answer about profitability is, of course: advertising. Conventional wisdom holds that Facebook, while posing as a social media website, is, in reality, the most prolific information cache currently available in private industry. People log in and voluntarily provide their names, birth dates, educational histories, employment information, relationship status, children's names and ages. hobbies and interests, vacation plans and pictures, political views and affiliations, and, (in my opinion) most importantly, their location. This is of tremendous interest to advertisers who could hypothetically spend millions on market research and yet never obtain access to such specificities about their intended victims - I mean, audience. Facebook has done the legwork for them and ostensibly provides a heretofore unavailable windfall of personalized information. The ultimate database. All provided with no subterfuge. And all of this is done by offering the public the one thing that is irresistible to most human beings:
A chance to tell his or her side of the story.
A public resume. A voice. A visible record of life displayed as the participant wishes it to be. Maybe the record is accurate. Maybe it isn't. But each person has his or her free opportunity to set the record of his or her individual life straight. You got grounded unfairly for bad grades in school? Complain about it on Facebook. You don't like the way something went on a particular day at work? Rant about it on Facebook. Your son got a baseball scholarship to UCLA? Brag about it on Facebook. Your hair happens to look perfect on that one day when no one was around to witness it? Memorialize it for posterity on Facebook. You shot a hole-in-one but no one can stand playing golf with you so you can't prove it? Get a cart guy to take your picture so you can post it on Facebook. People want to know why Facebook is so popular? It is not a mystery. It is human vanity.
One day a friend of mine and I were questioning why it suddenly seems to be so important for everyone in the world to be thought of as being "hot." Attractiveness is a Darwinistic reality. It is a basic mating tool. People have always cared about being attractive to whatever person with which they wish to mate and that will never change. But the current trend seems to be this idea that somehow everyone has to be attractive to everyone else. Not just to the person he or she might wish to date or marry. Not even just to whatever group of people a person may be attracted to. Heterosexual females are supposed to be hot to homosexual males. Sixty year old men are supposed to be hot to twenty year old females. All women are supposed to judge and rate all other women based on attractiveness. Men are supposed to care if other men think they are hot. I found this confusing until one day my youngest daughter put a very simple spin on it by saying to me, "Mom, all people need to believe that they are attractive."
Indeed. Yes. A teenager sees it so clearly. All people need to believe that they are attractive. And Facebook offers all people that chance! Every day all people can demonstrate attractiveness. Not just physical attractiveness, but also intellectual prowess, spiritual strength, comedic superiority, compassionate courage, emotional resilience - all of these things can be promoted daily on a persons Facebook page. AND if you are sick of all the people in your immediate life, you may now reach a virtually unlimited audience! You can connect with people from your past whom you never would have possibly seen again if not for access to the internet. You can make new friends based on common interests. You can become friends with people from other cultures with whom you have no common ground and learn about their lives. The possibilities seem endless! And the best part is: You are in control. You can add or delete people from your friends list to demonstrate their relative importance in your life. You can block people from ever seeing you at all! You can take a picture that is average at best (we've all done it) photoshop it to an unrecognizable perfection, and use it as your public face to the world! You can show your life as a non stop party. A goodwill tour in which you are the star. Or you can showcase your political views. Perhaps use your page to promote your religious beliefs. You can tell the world your problems and seek sympathy and enlightenment from a larger pool. Whatever you like. It is your page.
This illusion of control, this daily vanity project is an intoxicating premise. Brilliant, actually. It combines the human need for acceptance and interaction with the previously unavailable ability to electronically manipulate and represent truths in whatever way best suits the user. It's not so much a lie, as it is a snapshot of life poised out there in virtual posterity. It's like a movie poster. Or a political ad. A moment in time captured and presented to achieve a specific purpose. It is groundbreaking because previously this kind of spin was only available to famous or wealthy people. So in this way, Facebook gives power to the proletariat. And that is a worthy enterprise.
Of course as movie stars and politicians have long known, this kind of scrutiny often becomes a double edged sword. Whatever face you present to the public, once accepted, can be either difficult to maintain; (Connor, you guys have been in a relationship for three years now, why aren't you married?) or it can be used against you in a legal battle (Emily, you told me you didn't have my money, but then you posted pictures of your new car online...). Checking in it at a movie when you told your parents that you were at a friends house will likely get you in trouble. Once you go on the record, you are ON THE RECORD. Novice users of social media are learning the hard way that it may not always be the best idea to publicly record every move you make if you are not prepared for all the potential unintended consequences. As with any kind of major change, there will be lagging corresponding legal and governmental issues to contend with ranging from privacy issues to libel and beyond. It is a work in progress.
I am not a stock analyst nor do I profess to know what makes a company valuable. Most people will accept the premise that the seemingly infinite database that Facebook can access will translate into advertising revenue. I am certain there are other niches of the business that only insiders are privy to that are going to be profitable. From my point of view, however, I see the potential value in that Facebook users are more than willing to provide public knowledge of their locations. They will check in at restaurants and resorts. Promote car dealerships and specific brands. Tag photographers and event planners in pictures they post. The users insatiable need to showcase accomplishments (new house, celebratory dinner for latest promotion) added to the desire to be accepted by a group dynamic (latest iPad, advance tickets to movie screening) and wish to influence others perspectives (cool mantra learned at yoga studio, daily bible quote) all adds up to each individual person becoming his own living breathing advertisement. It is leverage upon leverage. In this way, the notion of collecting personal information for distribution to outside sources seems minuscule and outdated. Who needs advertising when each person is his own ad? The traditional model of targeted advertising becomes archaic when contrasted with the ability to harness this potential international vanity project starring each person presenting him or herself as attractive; utilizing Facebook to promote whatever commercial interest is making that person feel most attractive. Getting your braces off. Buying new clothing. Restoring old cars. Hitting the gym. Attending church. Hosting a charity function. Volunteering at a homeless shelter. Hiking a mountain you wish to have preserved. Traveling abroad. Whatever your cause. Facebook wants to know. You are the advertising. You are the message.
When you look at it that way, stop and ask yourself, who is actually providing the greater service?
BB
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