Its first-ever earnings as a public company, released last month, beat analysts’ expectations as revenue grew 32 per cent. Still, the shares plunged as investors were spooked by rising costs and slowing growth. Only some of those problems are attributable to Zuckerberg, analysts say. And given that he is the company’s largest shareholder, with ironclad control over all decisions, nothing would happen without his assent. Still, restless investors blame him for several missteps, such as pricing the IPO at $US100 billion. The enormous valuation left Facebook little room for error.
Some points here: 1. For “rising costs” read anything you like. Facebook has been operating on the same general cost bases for years, because it’s been doing the same basic business for years. 2. For “slowing growth” read “America’s economy may be stone cold dead because we killed it ourselves, but we still expect growth on balance sheets”. 3. For “restless investors” read “idiots who don’t know how to price stocks and have never understood basic stock/asset valuations and sell stock in a company making 32% more revenue.” 4. These were the same people who were tearfully begging to buy in to the IPO. 5. If the IPO was overpriced, who were the idiots that bought in at that price? 6. For “critics” read “people who’d like a piece of the action”. Yes, folks, it’s a setup- Corporates are trying to talk their way into Facebook. All this outrage about a company outperforming most, if not all the others, really doesn’t cut it. It’s the standard formula- Criticize, then explain how to make the criticism go away. Works on very small children and very inept politicians. Old business is like old media. It’s full of crocks who only know how to play office and generally screw up operations. They produce “performance miracles” out of thin air which are largely cosmetic and have nothing to do with the bottom line. Whenever they see a chance they like to get involved in big money operations so they can go back to what they do best, which is fraud and micromanaging things that don’t need to be done at all for very large salaries. So they talk themselves into roles and positions in successful businesses which are usually successful specifically because these corporate hacks aren’t involved with them yet. Bringing in an experienced corporate (meaning “One of Us Who’ll Give Us Jobs at Facebook”) is a recipe for turning Facebook into Another Great American Business Success Story- A politicized, nepotistic, bureaucratic fortress of outmoded thinking which spends more time in court than actually doing business. Google was a big success and highly innovative before going “adult”. Sure, the ability to provide cute statements to business media, who are as corrupt as the rest of the media, is a major asset. Gosh folks, we know how to wear a suit! We must be geniuses! The results at the coal face were appalling. Even some very basic Google business stuff like simple codes and signups simply do not work any more. The codes, incidentally, were patches generated as a requirement to sign up for something as basic as Google Analytics. That’s like being required to produce a birth certificate to wash your hands. Figure that out, and you’ll see what the word “bureaucratic” really means. Google is now a hyper bureaucratic, operationally arthritic, organization which generates big money mainly because of its sheer size and market dominance. Many people have also been saying Google has lost its innovative edge, and one of the reasons for that loss of innovation is bringing in dinosaurs who don’t know a damn thing about online business. Google, by the standards of the market, is performing well, because unlike the rest of the market, it’s not actually dropping dead every 5 minutes with every breeze that blows. What an achievement. Mediocrity aims low, does little, and gets brownie points for not dying. A few points for those wondering what to do with their crayons when colouring in this picture: 1. Facebook isn’t General Motors. It’s not Apple or Microsoft or Google. 2. Name one “experienced corporate” with any experience whatsoever in running a company like Facebook, because there aren’t any companies like Facebook. 3. It was always going to be the case that Facebook and Wall Street, which have nothing in common as cultures, were going to be a difficult match. Pre and post IPO, I have been pointing out the mismatch between Wall Street, which for some reason is still out of jail, and Facebook, which is a successful company that doesn’t really fit any corporate mold. USA Today has perhaps the most banal, patronizing, take on the situation. It explains the reason for “adults” taking over, then tells readers why in the case of Apple, Google and Yahoo the founders came back in as CEOs. The reason for their returns was that these ancient corporate cretins knew zip about the markets these new companies operate in. They can do bookkeeping- badly and very implausibly- but they can’t work in a market in which they weren’t trained to work and have no experience at all. So- Is Facebook about to become another rest home for America’s biggest losers? Why are people dumping stock in a company that’s actually making money? Will the corporate peasants who literally lost the nation and sent it broke find yet another gold mine for their little castrato brains to screw over? Will success spoil “investors” who are apparently supposed to mindlessly believe whatever the business media tell them learn how to use food stamps? If these are adults, what the hell are children? The biggest brats on earth are working on Wall Street. Trust nothing, believe nothing. Expect more hype about how great it is to have a few more suits around getting paid for screwing up everything they touch, and that’s about all.