You Don’t Create A Raging Business Flop Without Making A Few Enemies
Why has Facebook’s stock dropped 18 percent in the first few days that it has been traded? Much attention has been given to possible deceptions in the time leading up to Facebook’s initial public offering, but I have seen signs that point in a different direction.
Could it be that the Facebook primary revenue generating model, with finely targeted advertising based on Facebook’s ability to conduct dazzlingly detailed data mining operations against its users, is a piece of junk?
I wouldn’t depend on Facebook’s advertising for any business of mine. This evening, Facebook posted the advertisement you see here, telling me that I can ship my golf clubs through FedEx. The thing is, I don’t own golf clubs. I don’t play golf, ever. What’s more, the nearest FedEx drop-off center is a 30 minute drive from where I live, and I have only used it once. I ship using the U.S. Postal Service.
Before that, I saw an ad on Facebook telling me of a company that can help my law firm get more clients. That would be very helpful for my income, but then, I don’t have a law firm. I’m not a lawyer. I’ve never even worked as a paralegal.
This afternoon, Facebook showed me an advertisement from a company bragging that it has the best frozen hog semen in all of America and Asia. That might interest me, if I was a pig farmer. I’m not. I don’t want to be. I don’t raise any livestock, not even chinchillas.
It seems to me that Facebook’s supposedly brilliant advertising system ends up firing a lot of blanks. How long will businesses pay Facebook to send their messages to people who couldn’t care less? How long before Facebook’s sinking stock price reaches zero?