Sunday, January 29, 2012

Here comes the Facebook IPO

What a great business - get your users to generate all of the content, sell pointless ads to Fortune 500 execs desperate to prove they are hip by using "social advertising" and PROFIT!!

I'm thinking of forming a new competitor to the NFL.  We'll get guys all over the US to post their flag football games on youtube (FREE CONTENT) then we'll get them to watch each others games (USERS), then we'll sell ads to hip beer companies like Bud (Fortune 500 suckers!) and we'll PROFIT!  This is obviously a joke, but that is in effect the facebook business model.

I've always been a facebook skeptic and I'm even more so now.  The demo keeps trending away from high value individuals (25-45 yr olds) and toward the old and the young.  Yes, lots of people are on there all day but eventually advertisers are going to figure out that there is a reason they are on Facebook all day.

This IPO was supposed to happen in May but has been rushed to get out in Jan/February.  Why?  I think they see the 3 year trendline and they want to be public before the trends become apparent to everyone else.

The bigger question is why are they going public at all?  Companies go public to raise money to expand their business.  Facebook might throw off a billion $ of free cash this year, so clearly cash isn't the issue.  The second reason companies go public is so insiders can cash out.  I'd guess that's what is going on here.

It's also interesting that Facebook is working closely with Morgan Stanley and their vast retail customer base (read: dumb money).  This will be the biggest tech IPO in years and it will make a few people unbelievably wealthy but I'm happy to sit this one out.

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The crawling WEATHER ADVISORY is one of my pet peeves. Not only because it seems like we get an advisory every time a snowflake falls north of Westchester but because they are so vague.  As a refresher not all weather advisories are created equal.

Winter weather advisory -- When winter weather is occurring, imminent, and is an inconvenience.

Winter storm watch -- A significant winter weather event is expected.

Winter storm warning -- A significant winter storm or hazardous winter weather is occurring, imminent, or likely, and is a threat to life and property.

FYI - ADVISORY (just watch yourself) and WARNING (make sure the generator has gas). 

Cheers!

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