Facebook’s $5 billion IPO is not the biggest of all time. Facebook’s $5 billion IPO is not a Groundhog Day-like replay of previous Internet Bubble fiascos. It is, in fact, the start of something big for the world’s most successful social brand and a sign that social networking is a real and grown-up business.
10 Facebook Investment “Risk Factors”
Competitors: Users increasingly engage with competing products.
Product Failure: Fail to introduce new and improved products or if they introduce new products or services that are not favorably received.
Ad Overload: They are unable to successfully balance their efforts to provide a compelling user experience with the decisions they make with respect to the frequency, prominence, and size of ads and other commercial content that they display.
Privacy Concerns: There are changes in user sentiment about the quality or usefulness of their products or concerns related to privacy and sharing, safety, security, or other factors.
Government Regulations: There are adverse changes in their products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees.
Lack of Paid Advertising: Decisions by advertisers to use their free products, such as Facebook Pages, instead of advertising on Facebook. Loss of advertising market share to competitors.
Lack of User Interest: They fail to introduce new and improved products or if we introduce new products or services that are not favorably received. There are changes in user sentiment about the quality or usefulness of their products or concerns related to privacy and sharing, safety, security, or other factors
Poor Content Prioritization: They are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful, and relevant to them.
Negative Press: Adverse media reports or other negative publicity involving Facebook, their Platform developers, or other companies in their industry.
Users Opt Out of Advertising: The degree to which users opt out of social ads or otherwise limit the potential audience of commercial content.
“Facebook is a great business and it will do well as a business, but it deserves a “fair value” of $50 – 60 billion, not $100 or $130 billion.” – Eric Jackson
Image Courtesy: http://www.flickr.com/photos/niallkennedy/
Infographic design by Emily Caufield.
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