Am I missing something? I have been a computer user, programmer, assembler and fervent follower; however, for the life of me I can’t figure out why people have flocked to Facebook. This service today has almost 1 billion registered users.
I asked my wife why she found Facebook so compelling. Her answer was that it provides an easy way to keep current of one’s friends activities, photos, happy moments and sad ones. It is like someone had a bulletin board that everyone can read. I guess this is good reason, but….
I can’t understand how all of sudden the worth of this service, with the upcoming IPO later this month, will become one of the most valuable companies in the US. If I buy stock in this company, what am I really buying? Is there anything tangible that I can point out to that I would get for my investment? Well, some would say, it is the confidence of others that believe that Facebook is a good investment.
I remember in the old days people would ask you to come to their home for dinner and after a few drinks, just when you were getting hungry, they would tell you that they had something extremely valuable to show you. One of the hosts would bring out a towel and a pail of water, at this time you would start thinking that this was some kind of religious ritual. Only after they would dunk the towel in the water and asked you to look in the pail, you would start discovering why you were invited. The water in the pail appeared cloudy, even though you had been told the towel had been laundered with a popular detergent.
At the end you were told that the cloudy part was the residue left by the detergent after the Amway detergent had been used to REALLY clean the towel. At this moment you were supposed to ask the dinner host how could you get into this new marvel of cleaning product, and they would reveal the famous pyramid scheme that many of us were introduced to in the late 70s and early 80s. The idea and value of this scheme was to get many people interested so that they could provide many people selling the product, while you sat on top and collected a percentage.
The Facebook pyramid scheme is a lot more sophisticated. You hear that a friend is in Facebook and if you want to see how they bungee jumped, you would have to join Facebook and become their friend. When you join they collect as much information as they can, and make relations to the other users. You then get a list of the people who belong to Facebook that have one or more coincident experiences with you. Then you are asked to “friend” them. Notice that so far you haven’t been asked to sell detergent; however, your data are now being used by Facebook to expand their worth. As the number of members increase there is more people to push tooth paste, cars, electronics and every type of consumer product. The only thing of value that Facebook has obtained and then mined has been the information that you and the other almost 1 billion users have given them.
I guess that is a good deal if you can get it. It is a win-win situation. You reunite with your high school locker mate and they keep increasing the membership geometrically. The bait here is not a product that you can sell and make money with, but an emotional reward. It doesn’t cost you anything, just your data, and it cost Facebook very little. The “detergent” in this case is provided by you…
The question here is for how long will we continue providing Facebook with the information that makes it so valuable. Read my articles on this subject at http://communities.washingtontimes.com/neighborhood/21st-century-pacifist/