Before I joined CFO last year, I was working from home. (All right; I was unemployed.) In those relatively dark days, I was always logged onto Facebook. Alone in my attic office, trolling the Internet for work, sending out my CV, rarely receiving a response, hectoring editors for payment for services rendered, learning a hard lesson about how companies could augment their cash flow by not paying me expeditiously, Facebook provided the cheery, bright community I'd lost when I lost my job.
Today, gainfully employed, surrounded by living, breathing people, I almost never open Facebook. I visit my LinkedIn groups; I keep TweetDeck rolling on my desktop; but Facebook, not so much. And when I do, I don't like what I see: Suggestions that I friend people who know people I know and therefore could in some alternative universe be my friends. (They're not and won't be.) Ads trying (as they say) to induce me to spend money I don't have to buy stuff I don't need to impress people I don't know. A feed keeping me updated on all the things people are "liking" moment by moment.
If you ask me, it's not cool, and, as Napster wild child Sean Parker (Justin Timberlake) said in "The Social Network," "The Facebook is cool. That's what it's got going for it. You don't want to ruin it with ads because ads aren't cool."
Of course, that's fiction. That's screenwriter Aaron Sorkin talking, not Sean Parker, and certainly not Facebook founder Mark Zuckerberg, who resisted monetizing Facebook in the movie but in this week's pre-IPO S1 filing reported $3.7 billion in revenue last year, 85% of it from third-party advertising.
That's good money. And over a billion of it was profit, which is pretty remarkable, if not unique, for a technology IPO. So, I'm sure the fact that I've effectively dropped out of Facebook doesn't particularly discomfort Zuckerberg. I mean, as of December 31 he had 845 million monthly active users and so, as he's poised to become one of the world's wealthiest men, losing little old me can't be particularly troubling. On the other hand, in the aforementioned S1 filing, the very first risk the company lists is "If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed."
And that's the catch, isn't it? To return value to its multitude of would-be investors, Facebook will have to grow revenue by increasing the amount of money advertisers spend with it. To do that, it has to grow its user base ("If we are unable to maintain and increase our user base and user engagement, our revenue, financial results, and future growth potential may be adversely affected.") But can Facebook make itself more attractive to advertisers while remaining attractive to users?
It won't be easy. In fact, it may be impossible. All those ads; all those wheedling come-ons to connect and invite others to connect, it's a turn-off.
In fact, it's uncool.