The Facebook IPO: Three observations

Unless you’re holed up inside the Diefenbunker, it’s nearly impossible to ignore the hype over Facebook issuing shares on the stock market tomorrow.

Since trading in stocks should, in principle, involve a little bit of knowledge about the product(s) made with the fruit of financial gains, I think it’s a fine time to share a bit of insight into how Facebook currently fits into my little dust-speck of the social media universe.

OBSERVATION: Facebook is an incremental referral service

This morning, my blog was approaching 85,000 individual visits — pretty good for something I have been working on in earnest only for four months.

There have been three major referrers for these visits: Google searches (21,200), Facebook (15,300) and Twitter (3,160).

The Facebook referrals, spurred by 653 Facebook friends, represent 18 per cent of the traffic on this blog. It’s a lot less than I would have expected — but it still represents nearly one in five visits here.

On the surface, the stats for the city’s two biggest classical and opera presenters are less.

The Toronto Symphony Orchestra’s Facebook page has collected 4,087 likes and 94 friends. The Canadian Opera Company boasts 5,330 likes and 97 friends, as of today. (The Canadian Music Centre, by comparison, has collected 1,938 likes and 16 friends.)

These are not huge numbers, but they all suggest the possibility that more than one pair of eyes and ears that might not otherwise have known about a performance have made connections.

Since building an audience is all about adding people one at a time, every single one of those friends and referrals is valuable.

My point: Someone buying stock in Facebook is buying into a community that is largely about personal fun and communication — one that provides small, long-term gains for organizations and businesses and entrepreneurs, not blockbuster rewards.

OBSERVATION: Facebook can be fooled

During my three months as a business reporter at the Toronto Star before returning to the world of music, I focused as much as I could on social media and technology. I discovered in research and interviews that just about every single social media statistic can be “gamed,” meaning cheated.

There are cheap services, run out of low-wage Internet sweatshops in developing countries, where anyone can go shopping for Facebook friends, Twitter followers, blog visitors and blog commenters.

You want 1,000 more people to like your Facebook page? That’ll be $75.

Then there’s all the spam. This blog has received 4,600 spam comments, meant to bury links to totally unrelated legitimate businesses and scam artists inside these pages (I can thank Akismet for filtering and flagging them for me).

That’s more than the number of visits that have come via my 1,200 Twitter followers — who each receives a message with a link to each new post I make on this blog.

My point: Buying into any social media enterprise is buying into a world of murky statistics that make senior managers at Goldman Sachs look like strict disciplinarians.

OBSERVATION: Privacy is the Joker in this deck

During my business weeks at the Star, I had several occasions to speak with Ontario Privacy Commissioner, Dr Ann Cavoukian and her assistant, held in the highest regard by people around the world  concerned about Internet privacy.

She tells anyone who will listen about the dangers of leaving one’s personal life and information out in public view, which is what Facebook encourages.

I feel like such a curmudgeon when I rejected requests from my extended family to join a family-tree app that immediately asked to import all of my Facebook information. The same has happened when friends have asked me to join a game group.

But thousands of others are less careful (or not as paranoid).

Given the thousands more who spend days and nights trying to figure out ways to make a buck or three in the dark underpasses of the information superhighway, we can only assume that it is only a matter of time before some giant scam is perpetrated on Facebook’s society of friends.

Of course, all will be fixed, and all will once again be well.

But will that be the case for people who bought the company’s stock?

John Terauds


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