Last week it was announced that Facebook was finally floating on the stock market. Much has been written and said about the floatation, in particular the letter written by Mark Zuckerburg to potential investors. Many questions are now arrising as to who would want to invest in the company often valued at $100bn. The question is where does the true value of Facebook lie?
It's the millions of users of the site that create the value in the product, without the users there is no content or market for advertisers to sell to. We have seen how other social networks have fallen from grace and how the users of these sites (or users leaving the sites) have contributed to this. Friends Reunited is a good example of this. Facebook played a big part in the downfall of this site and to some extent other sites such as Bebo and MySpace. All it takes is the 'next big thing' for people to leave Facebook and effectively damage the value of the company. We may not know what the next big thing is yet but we didn't know what Facebook was before 2004. It will be interesting to see who, what and if people buy into Facebook and whether this will effect Facebook as a product. There will obviously be more pressure for Facebook to be more commercially viable - whether this will affect the experience users have on Facebook remains to be seen.
The fact that Facebook doesn't actually need investment but is floating could actually be self harming.