Did Facebook’s S-1 Simply Serve to Keep Congress Away?
We all know by now that Facebook has filed the paperwork for their IPO. If you want to learn who is getting rich and by how much there are myriad blogs etc that will give you that information. I have read a few of these and the takeaway from them all? Zuckerberg is stupid rich while Sheryl Sandberg is “busting through the glass ceiling” and brings home the bacon for her home in a big way. There, I just saved you a toe of time!
What is most interesting is a list of 35 business concerns or threats that Facebook states could throw a monkey wrench into their money printing operation. They include mobile as a weak spot in the business and Zynga being responsible for 12% of the revenue of Facebook. But here is the one that I see as simply a preemptive strike against Congress looking at Facebook as the Google of the social world. It reads like this.
“We face significant competition in almost every aspect of our business, including from companies such as Google, Microsoft, and Twitter, which offer a variety of Internet products, services, content, and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features. We also face competition from traditional and online media businesses for advertising budgets.”
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If people are being honest Facebook’s dominance in the social space is going to be difficult for anyone to challenge. We are watching Google, who has tons of money, struggle to put a dent in Facebook’s position. Twitter isn’t truly a competitor because they address two different aspects of the social fabric online. And a startup coming in an putting a real dent in their position (which will only get stronger with the cash raised in the IPO)? I don’t see it. Google is struggling because it has a very bad track record in social and it must overcome its image of being a search engine that is overextending itself rather than improving its ecosystem. Other small players like Path are nice but we are seeing very real limits as to how far the average consumer is willing to go to manage multiple social network presences.
In other words, with Facebook’s position in the market they are going to need to “pull a MySpace” in order to stumble enough to open the door for a competitor. I just don’t see that happening. Of course, it can happen since any business can be viewed as being 90 days from extinction but it is not likely. If, however, you want to think that the whiners that call Facebook “MyFace” etc and say it is crap are a fringe element that would probably see a free gift of a solid gold bar as insignificant since it wasn’t two solid gold bars. In other words, they are idiots and don’t represent the vast majority of Facebook users.
So Facebook really needs to protect itself from government intervention. It actually sites that as a potential problem for them. So how better to keep politicians who maybe didn’t get a piece of the IPO out of your way? Throw up roadblocks like the claim that there is real competition to Facebook then crank up the lobbying effort. Reuters reports
Preparing to join the ranks of publicly traded companies, Facebook Inc is also beefing up its presence in the U.S. capital with a first report of money pouring into its newly created political fundraising arm.
A latecomer to Washington, the social networking site is joining scores of powerful technology companies such as Microsoft Corp and Google Inc that have political action committees (PACs) used to raise funds for donations to political campaigns or causes.
Hey if Stephen Colbert can put together a SuperPac and raise over $1 million imagine what Facebook can
buy do in Washington, DC.
Let the real games begin!