Archive | May, 2012

What the Facebook IPO can teach us about inbound marketing and word of mouth.

17 May


No really, nothing at all.  What it will teach us is that the same information gets regurgitated over and over and over again, and that linkbaiting, the practice of creating misleading headlines in order to generate clicks, is alive and well. Flourishing, even.

I did it with this post, actually. Clever, right?

This week, with the dawn of the Facebook IPO (The Biggest IPO in Tech History) we’re seeing two of my least favorite phenomenon in action:

1) The Echo Chamber Effect.
The same information repeated by the same outlets, over and over and over again. This happens a lot when a celebrity dies, but it’s very common in the tech world too. This afternoon was particularly bad: the entire internet, including ‘reputable’ news outlets, posted ‘Breaking News’ that the Facebook shares were set at $38, and that the IPO was therefore confirmed as the biggest tech IPO of all time.  Was that ever really in question? Did the price merit the breaking news tag? Is that really ‘breaking news’, or are you just tediously milking it for effect?

I’m all for everyone having an opinion, I’d just like for it not to be the same opinon, and I’d like it to add something to the conversation. CNBC reporting what Mashable saw on CNN makes me die a little inside. Please stop.

2) The Ubiquitous Expert Effect.
Everyone and their mother knows how this is going to go. Experts have come out the woodwork with every opinion you could possible want on this IPO: Facebook is going to be the biggest company in the world, or it’s going to crash and burn.  The valuation is a steal, or they’re ridiculously over valued. Zuckerberg is going to ring the bell at the stock exchange or he (gasp!) is going to do it remotely from the Facebook campus in Menlo Park. Stop the presses, seriously.

Facebook Facepalm

The truth is, anyone who states with absolute conviction that they know how this is going to go is full of it.  Balance, perspective and reasoned thought are not assets that the news media (or the news consuming public) values.  Reasoned, smart debate has been replaced by the ubiquitous expert effect. He who shouts loudest, wins. This IPO is the worst example of that that I have ever seen. It’s pigs at the trough.

The bottom line is that Facebook is an amazing company. It’s a genuine phenomenon that has built online community on an absolutely unprecedented scale, the likes of which we have simply never seen before.  It is mind bogglingly big actually: valued at around a hundred billion dollars. That’s on a billion dollars or so of revenue. That may or may not be a good bet, but like all IPOs it is exactly that: a bet.

It’s OK to say that it could go one of two ways. It’s OK to tell both sides of the story. Heck, it’s OK to say that we just don’t know how it’s going to go. One thing is for sure though: revenue is going to have to increase one way or another. That’s not exactly a ground breaking insight, but it’s definitely gotten lost in the pre-IPO frenzy.

If you’re telling me with absolute certainty that you know how this is going to play out, then I can say with absolute certainty that I would not want to sit next to you at a dinner party. I’m sure your mum thinks you’re lovely, but Iwould like for you to stop talking for a bit. Thanks so much.