A year ago now I wrote a post about the Facebook IPO – and that I didn’t understand it.  In that year, the price for a single share of Facebook is still $5 lower than it was on launch. It seems that some of the things I wrote about (lack of mobile monetization strategy, an advertising strategy that didn’t seem like it could be very well targeted) could indeed be part of the reasons for that.

(What is certainly clear is that some people still got incredibly rich from the IPO – by betting against the success of it. Within 3 months, approximately $50 billion was written off of the value of Facebook – but plenty of investors made their profits by betting against the company).

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What’s happening now

In the past 12 months it really does seem as though Facebook has firmed up some of it’s strategies and they may start to pay off.

  • Mark Zuckerberg told Fortune magazine that they’re re-inventing themselves as a mobile first company – rather than as a social media company. That’s potentially huge – and should address their lack of a clear monetisation strategy for mobile.
  • It is still the social network. Whatever it calls itself, it is still the ‘go to’ network – it remains where all your friends are. Well, that’s true if you’re western, and over 25 … Whilst it may never quite happen for Google Plus in the way they’d like, it seems that the kids are over Facebook and are moving on. To Twitter, to Tumblr, to Snapchat or Instagram, or whatever. But Facebook are just starting out in a ton of emerging markets (Africa, parts of Asia, and so on) and in those places Facebook isn’t a social media company, or a mobile company, it is simply The Internet – having introduced Facebook Zero (a stripped down, text only version of the software) in these markets.
  • And to solidify that, the introduction of Facebook Home – whilst it has received plenty of poor reviews in the west – will provide many many new phone users with their first access to smart phones, their first access to mobile internet, and an enforced exposure to Facebook.

So, whilst there were plenty of good reasons for the Facebook IPO ‘failing’, there seem to be plenty more for it to start to recover those investors. The fact is that most brokerages have the stock listed as a ‘Buy’, and I wouldn’t bet against it.

Some Notes:

  • There’s a really good, long read on the IPO and some of it’s impact here: The Atlantic
  • It really does look as if teens are over Facebook.  Some recent data suggests that Facebook may be more an extension of school, rather than a place to naturally hang out. And who can blame them when 70% of kids are friends with their parents …
  • … a recent report shows ‘how Facebook has been slowly colonised by the very forces teens signed up to escape: watchful parents, too-old adults, and “drama”‘.