Facebook Follies

It’s been a summer to forget for Facebook.

The IPO had no “pop” with shares never rising much above the initial asking price of $38. Since then, shares have on a southbound train, dropping nearly half their value to around $20. With the bad business press has come a loss of “cool,” because there’s nothing cool about a stock losing half its value, amounting to billions of dollars in lost profits and revenue.

It’s especially tough on Facebook, which is really a marketing platform for Facebook. The real marketing challenge for Facebook is how to keep the magic alive. The base of users has grown to an estimated 900 million, and Facebook must consider how many of them want the basic Facebook experience to continue as it is, because they are used to it, and how many are getting restless, being the kind of consumers that value novelty and new experiences.

A lot of people aren’t sure how they’re supposed to react to Facebook’s difficulties, especially those who participate in the social media. If Facebook is the leader, shouldn’t we all hope they succeed, as a bell weather and trend-setter? Or, does it not matter whether we cheer or not, as it’s nearly impossible to figure out what 900 million users are going to do in the near or far-term.

It may be that Facebook is losing out to Twitter, which is more immediate communication, shorter posts, and still delivering celebrity tweets and the kind of “People magazine” content that some of Twitter’s audience is responding to. When there is a news event or other happening of the moment, it’s the Twitter-sphere that gets moving, not Facebook.

What Facebook really needs is unique content. Sure, it’s true that the 900 million users generate billions of pages of content, but it is for the most part, like looking into a mirror. You can gaze at your wall for so long, and you can gaze at someone else’s wall for a while, but it may be that neither you or your friend is very entertaining and therefore to be entertained you will go elsewhere.

It is true that corporate America embraced Facebook big-time and its logo graces pretty much every ad on TV. But, consumers will view this as pretty much an online press kit, unless there are coupons involved.

What Facebook is not, for example, is a home for cutting edge comedy, hub of up and coming songwriters, or film makers. Which is a lost opportunity, since one figures the 900 million might be able to move a few downloads on iTunes.

One factor in Facebook’s turmoil that is often ignored is how fast it grew. It matters, because an attachment made quickly can just as quickly be dropped. We will watch to see if users treat Facebook like a toy, or whether it goes My Space in a ghost town of pages that were last updated years ago.

It’s entirely possible Facebook will figure out how to keep its massive base entertained, which would boost confidence in its stock. Whatever happens, the future of social media will be larger than one platform.