Facebook's Stock Flop Is an Allegory for Facebook Itself

May 21, 2012 RSS Feed Print

Facebook's public debut on the stock market ended up being a financial allegory for the social networking site itself. Buzz-spreaders do not necessarily ended up becoming actual investors. That's not surprising, considering that your Facebook friends are not really your friends.

The stock was offered at an initial public offering of $38, and ended up capturing just $38.23 a share, hardly the performance expected from the much-hyped stick. And as Bloomberg Businessweek reports, Morgan Stanley propped up the stock to keep it from dropping.

[See a collection of political cartoons on the economy.]

But is that really a surprise? Facebook, while a creative and wildly popular venture, is based on a bit of artifice. Here is a website where almost anyone can have "friends," even if they don't have any in-person friends. I've gotten "friend" requests from people I don't even know. What is their quest? To run up their lists of friends to impress other would-be friends, hoping that someday one of these people might actually show up in person and agree to catch a movie together?

I've had grown adults, with hurt expressions, ask why I haven't "friended" them on Facebook. In some cases, these are people I hardly see anyway—what is the point of reading useless "updates" (I'm getting on the plane! I'm locking my tray table and putting my seat into an upright position! I'm turning off my iPho…)? I can understand casually keeping in touch with far-away friends and families through Facebook. But if you have to go on someone's website to find out what they're up to and whom or what they "Like" (Facebook, somewhat kindly, doesn't offer the option of dis-"Liking" someone), they're not really your friends. They're people looking for an excuse to procrastinate at work.

[Rick Newman: Why Mark Zuckerberg Might Be Too Successful]

So while the offering of the Facebook stock didn't prove to be as impressive as the build-up, it was really not a shock. It's a fascinating idea, but the business doesn't actually make anything tangible or create anything. Further, no one has been able to figure out how to monetize the Internet—at least, not without a pay wall, which would destroy the whole inclusive idea behind Facebook. Fascination is one thing. Plunking down actual cash is another. Investors may "Like" Mark Zuckerberg and Facebook, but that affection may be limited to a cartoon thumbs-up.