Facebook: A Passing Fad?May 15, 2012 4:14 pm ·
As Mark Zuckerberg gets ready to watch his Harvard dormitory creation turn into the largest Internet IPO in history—now said to be valued at more than $100 billion—surely the furthest thing from his mind is the idea that Facebook is not here to stay. In fact, it seems laughable to even make such a suggestion.
Or does it?
“Half of Americans think Facebook is a passing fad,” noted the Associated Press on Tuesday. “And, in the run-up to the social network’s initial public offering of stock, half of Americans also say the social network’s expected asking price is too high.”
The latter observation is fair enough. To be sure, less than a third of investors view the expected value as “fair.” And to be honest, I am equally skeptical of such a high valuation, especially against the backdrop of the dot-com bust.
Even still, to call Facebook a fad comes across as a bit harsh—at least at first. However, once one considers the generational breakdown of the poll, it becomes a bit more clear as to why such a surprising result occurred.
“Young adults, a majority of whom log on to Facebook daily, are more willing to dance to their hoodie-wearing piper, 28-year-old CEO Mark Zuckerberg,” the AP report explains. “Among Zuckerberg’s peers, adults under age 35, 59 percent say Facebook is a good bet.”
However, such support is counterbalanced by the outlook of older generations.
“Only 39 percent [of those] age 65 and over say Facebook shares are a good investment,” the report continues. “Nearly half of Gen X’ers (ages 35-44) say the company is a good bet, as do 55 percent of middle-aged people.”
It is hardly surprising, then, that public outlook on Facebook’s future as a company falls along similar lines. What is surprising, however, is that Facebook is not more popular than it is among Zuckerberg’s peers. But this can also be explained.
In light of Facebook’s sordid past when it comes to user privacy, even the younger generation is beginning to lose its faith in the social network’s ability (or will) to protect their information. Some 60 percent of Facebook users don’t believe that Facebook will keep their personal information private. Worse yet, a meager 13 percent actually say they trust Facebook to safeguard their data, and even fewer users feel that transactions on the site will be made securely.
“Even Facebook’s most dedicated users are wary—half of those who use the site daily say they wouldn’t feel safe buying things on the network,” the report observed.
Given the social network’s revenue model, user concerns seem hardly misplaced. Personal information is what makes Facebook so alluring to advertisers. In the event that Facebook is faced with the choice between protecting such data and increasing the inflow to its coffers, the probable result is all but obvious.
And once Facebook’s Wall Street debut becomes official later this week—adding the legal obligation to place shareholder benefit at the forefront of all it does—users can probably expect the protection of their information to be even lower on the company’s new priority list.
The only question now is, with the social site incorporated into so much of what people do when they’re online, will the future misuse of user data really cost Facebook anything? As long as people stick around, so will Facebook.
For more on Facebook being a passing fad…
- Facebook is a fad, say half of people polled (news.cnet.com)
- Poll: Half of Americans Call Facebook a Passing Fad (business.time.com)
- Facebook fatigue? Half of Americans say Facebook a passing fad, IPO shares overpriced (thestar.com)
- Half Of Americans Think Facebook Is A Passing Fad (businessinsider.com)