in 1941, the watch company bulova paid $9 to air a commercial just before a brooklyn dodgers philadelphia phillies baseball game. the ad was nothing more than this picture with some voice over. some people who saw this first commercial weren’t interested in buying watches. wasted advertising dollars.
this morning, when i logged on to facebook i read some ads on the right margin of my home page. pottery barn. a new opi gel nail varnish. christian singles date. faithful men looking to date mature women. ameritrade. a new anti-aging regime. bone density tests. i have a sense that if i logged onto my son eastman’s account, there would strikingly different ads. and if he logged onto my account, there would be a lot of wasted advertising dollars. because he’s a twenty year old dude. he doesn’t want to date faithful christian men, open an ameritrade account, or get his bones tested. and frankly, what does he need anti-aging for when he still has to use a fake i.d. to buy liquor?
advertising is an inexact sport.
ever since facebook went public in may 2012, the shroud of pessimism has fallen over its menlo park headquarters.
the shroud of turin is a piece of linen kept at that italian town’s cathedral of saint john the baptist. it bears the image of a man who has injuries consistent with being crucified. some people think it was the burial shroud of jesus. the shroud of pessimism is when everybody thinks you’ve got nails in your hands and feet and you’re dying in between two thieves.
share prices on that first day were over $38 but the price has been bumping and tumbling ever since. part of the problem is how to monetize facebook.
say what? you’ve been hearing about how mark is a multi-trillionaire. but yes, facebook actually has had a bit of a “what are we doing here and how do we make money doing it?” problem.
it’s about advertisers and how much they’re going to be willing to pay for playing on facebook. when mark first started facebook, it seemed like the easiest thing in the world would be to allow banner ads–users clicked on the image, were redirected to the advertiser’s website, and for each click the advertiser would kick back money. mark didn’t want to do that. he wanted interactivity: customers expressing interest, encouraged to give word of mouth marketing on a massive scale, and advertisers able to respond to the market with customer driven innovations.
okay, how likely are you to visit skittles.com? how likely are you to “like” skittles on facebook? in march, 2012 skittles.com attracted 23,000 unique users in the united states. during that same period the skittles page on facebook was a new “like” for 320,000 people. i want a job responding to posts from fans of skittles. i also want free skittles.
today’s closing share price for facebook is $27.40. a bit of a tumble from $38 but i think the long term prospects are good. if i wasn’t paying my taxes this weekend, i’d definitely be down for some facebook stocks. . . and maybe a bulova. because that first television commercial is making me feel quite nostalgic.
3 Comments | tags: advertising, bulova, facebook, pessimism, shroud of turin, skittles | posted in Uncategorized
so lots of folks are frowning about facebook. the social media network built in mark zuckerberg’s harvard university dorm room in 2004 offered up its shares to the public in may. at the opening bell, it was trading at $38 per share and expectations were high. it was the most anticipated of ipo’s!
since then, share prices have plummeted to less than $20 as i write. board member and one of facebook’s biggest investors peter thiel sold off 80% of his shares today and that’s gotta hurt. thiel was an early angel to the company, with a $500,000 check. he’s going to end up with over a billion dollars. that is so much more of a return on investment than i netted when my ex husband and i sold the family home this summer. and i don’t see any articles on cnn.com about what a lousy investment the presser family made in real estate.
dustin moskovitz, one of facebook’s cofounders, is selling 7 million shares today, netting him about $9 million. that sounds like a defection, like a friendship issue. but it’s not. moskovitz still has 126 million shares, or about $2.4 billion in the company. so mark, don’ t hit the “defriend” button!
but let’s look at mark’s summer. and facebook’s summer.
mark and his girlfriend priscilla chan married a few days after the ipo in may. contrary to the storyline of “the social network” mark and priscilla were an item beginning even before facebook was started. he’ll always know she loves him for himself! and she graduated from medical school this year and is pursuing her own dream of being a pediatrician. what a happy couple! i have no idea where my “save the date” postcard and my invite went. but that engraved toaster i got you at bloomingdale’s is on its way!
so on a personal note, mark is having a great summer. and professionally? well, he’s young and he’s created something so amazing that he could walk away and everybody would still think he’s a genius.
but is he going to walk away? no. just because facebook (and the other social network systems) have been overvalued doesn’t mean there’s a fundamental problem. it just means that some people were a little overenthusiastic. a social network’s only asset is information about its users. the only thing facebook owns is information about you–your pictures, your posts, that status update–that it can sell to advertisers. there’s never been a company model quite like facebook, groupon, zynga, linkedin before. it’s to be expected some mistakes would happen in figuring out how to value information about its users.
but with mistakes comes opportunity. the price is dropping. some analysts think facebook is going to settle around $12 a share and that still leaves mark zuckerberg incredibly wealthy.
mark and priscilla have lived in this home for quite a while. it’s big, to be sure, but not quite what you would expect for a gazillionaire. and i respect that the two of them handed out candy at halloween on their own. they’re pretty regular, all things considered.
and here’s the great thing about the shares settling in the teens–it means that mark can look forward to regular type folks investing in facebook. including me!
see you at the board meeting, mark!
5 Comments | tags: advertising, blogging, business, dustin moskovitz, facebook, friendship, google, initial public offering, investment, mark zuckerberg, peter thiel, priscilla chan, technology, vacation | posted in Uncategorized