Why many investors are wrong about Facebook

Google’s first production server rack, circa 1998
Source: http://flickr.com/photos/jurvetson/157722937/
Author: Steve Jurvetson

Those who suggest Facebook is a bad investment or a short-lived Internet phenom, I’m reminded of the quote attributed to Samuel Clemens, “The Rumors of My Death Have Been Greatly Exaggerated.”

• Facebook’s IPO debacle: greed, hubris, incompetence.
• Facebook’s IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall Street.
• Exclusive: Fidelity facing “thousands” hit by Facebook woes.

I’m continually reminded by a statement I occasionally found annoying, “perception is reality”. I’m not invested, connected or do business in any way with Facebook. I’m also not an expert in business, finance and investments. I think the market has Facebook all wrong, and here’s why.

The right ideas at the right time. It’s possible to be ahead of your time and not be a financial success or have the basic idea fully worked out. The execution lacks evolution. In the Internet world one could argue that would be MySpace or perhaps Classmates. They are broadly similar to Facebook but lack the features necessary to compete at the level of Facebook. Yahoo sadly, is a historical example, perhaps more so than MySpace, that demonstrates starting out strong doesn’t necessarily keep you in the lead.

Facebook differs from those examples in that it has demonstrated not only the initial excitement of a widely publicly accepted Internet application, it has evolved through association with other popular attractions in shared games  such as Farmville . It has thematically improved presentation and a few times where it stumbled, Mark Zuckerberg leadership has backed off the introduction of a new feature.

The leadership of Facebook is young like Apple was in its early years which suggests strong progressive technology will continue making it a better long-term investment than perhaps other currently attractive and perhaps more settled technology stocks.

Facebook enjoys a wider demographic than many other interesting and useful Internet businesses. Twitter comes to mind in comparison. Twitter has caught on well but there are many people less adoptive of newer technology that find  Facebook connections easier and reaches an audience encompassing those who  play Angry Birds and those who post pictures of their favorite grandchild or special pet.

There are many arguments that suggest Facebook duped the investment community or the stock was over hyped. Keep in mind those with whom make such remarks are often those entrusted with promoting or advising on investment. They are the very ones who now have to look at themselves and ask the tough questions; were we duped, is FB a bad buy?

My thoughts are these; we live in a time where expectations for profit or investment come over night. The demand for instant gratification is also our undoing. The very core idea of buying stock has been the premise to hold long-term. So, the stock came out with a higher opening than it currently sells. This shouldn’t come to savvy investors as a revelation. I recall Yahoo once sold for over $100 per share. Google didn’t lose sight of their mission and I believe Facebook has an equivalent firm grasp.

Smart people are in the right place at the right time in finding opportunity. They do that because educated guesses are based on information which helps position people to be in the right place at the right time. Investors need to remember not to bite the hand that feeds them. Facebook is here to stay and will continue to evolve.

Related articles

• The inside story: How Facebook panicked and botched its IPO (venturebeat.com)
• It Was ‘Smart Money’ That Got Burnt In $FB IPO (siliconvalleywatcher.com)

The Game Changers

The US as well as much of the global economy seems to still be in a mess. There are and will continue to be discussions from all parts of the political spectrum on how we got here and what needs to be done to help improve prosperity. I’m of the notion that a large government approach to solving these problems is often ineffective. I look to what history and industry teaches us. History shows we’ve been here before and industry proves there has and will continue to be a way out of the morass.

We are obviously in a wave of progress that supersedes the late 19^th and early 20^th century industrial revolution. No matter if the consequences weren’t always smart or attractive; the fact is the growth in heavy industry paved the way for a new wave, a wave of technology.

It’s easy to see the evolutionary cycle of innovation and technological progress in hindsight. By the mid 1950’s much of the world was building upon the advantage of electricity and modern plumbing we now take for granted. Advances in communication, construction, physics and chemistry were paving the way for new inventions. A new form of hardware was emerging. At first it resembled the technology of the day, large and heavy but soon this would also change and at a pace which in my lifetime is astounding.

The Shockley diode was one of many early inventions which formed the basis of the modern integrated circuit. This device, likely to not be known by most people, introduced a new approach to a range of problems yet to be discovered. The miniaturization of electronic circuits which are the foundation of our modern world fuel our current and future advancements in science, medicine, communication, logistics, energy and transportation.

The entire integrated circuit revolution which brought upon us the computer age now propels us with increasing velocity toward things we would be totally unprepared had these items not been invented. In order for the human race to advance, computers are the technological equivalent to having an opposable thumb. We are evolving from a hardware funded economy to an application based. Just as oil, steel the steam engine, and the jet have moved us along with jumps in prosperity, and the subsequent boom in computer hardware, we have already entered the age of the software application.

So instead of using the redundant terminology of software & application, let’s just refer to these new uses and inventions of software as an application.

Applications are likely going to play a huge part in our economic revival. We were supposed to have gone through a transition of manufacturing to service economy. That change is still upsetting the economic apple cart and as disruptive as those changes have been, they will pale to the new ones. Let me back up before I explain that idea further.

All new evolutionary technology is dependent on a select generation of working people who thoroughly understand and apply that technology. Furthermore, any advances in new systems and applications require all prior inventive and scientific discoveries to be passed on to the succeeding generations. This means any thing we knew about before, metallurgy, chemistry, agriculture, communication, medicine, physics, mathematics, language, manufacturing, arts as well as basic day to day living in an increasing diverse society, must be fully understood if we are to reliably move forward in any predictable way.

If we choose to elevate ignorance and prey upon the basic emotional human element, we have a bleak and unpredictable future. It’s absolutely necessary to have an emotionally stable and educated society in order for human progression. There are loud voices which suggest the society we live in is unfair. This relative unfairness can only get worse if the masses refuse to adopt successive building block principles of continual education, stabilized families and a desire to stay inquisitive.

Now back to my main premise of the next evolution in the global economy. Most business starts out with one or a handful of enterprising individuals. The idea behind this new business starts from this small group but needs outside support for it to grow. Support comes through a vast array of services which include what I see as applications. The cost of entry for this to occur will be the game changer and I want to highlight just a few of these relatively new Internet structured developments.

Lets start with the existing well known. Google, Twitter and Facebook. Each of these has created mechanisms which vastly aid in research, societal connection and communication. Despite the various forms of media  criticizing Mark Zuckerberg, et al. and the company Facebook, there are amazing future possibilities to be realized with this company.

Lets’ look at a few other hopefuls and the formation of what can greatly assist entrepreneurs.

Asana – a shared project management resource.

Kickstarter – a small scale funding capitalization resource.

42floors – a unique spin on the real estate office market. This is still too regionalized but the idea of packaging commercial real estate with office products and the presentation just has to be a good choice for those clever enough to use the idea in their area.

Sidecar – a smart phone application which in a sense is the equivalent of a roving reporter. Since the advent of camera phones this to one degree or another has allowed guerrilla video to flourish.

Multiple touch technology – we saw the demonstration of the idea in entertainment with the Minority Report or a step up with Iron Man using a 3D image multi-touch technology. Microsoft is working on their own Surface computing. Already released into the mainstream through products such as the Apple I-Pad or I-Phone as well as most Smart phones, this technology will find its way forward in education, medicine and industry.

There are several others too numerous to mention all at once, but as the technology slang goes, shift happens. Marc Andreessen on CNBC

Related articles

• New chip 1,000 faster than Bluetooth (thesciencebulletin.wordpress.com)
• Yahoo Axis may be game changer for search and the troubled company – Computerworld (huguesrey.wordpress.com)

Preserving Your Right to Privacy

Are you concerned about your privacy? Maybe not if you are one out of millions that may have a Twitter, Facebook or Google account. Sometimes you just throw up you hands and say its the price we pay for ‘free services’. Are those services free however? What about those online stores you visit or the blogs you post on or all the online searches you use?

Obviously the Internet is a resource / research friendly environment and those clever YouTube videos just have to be viewed and sometimes posted by you. All of this seemingly friendly information and entertainment takes a lot of money to provide these services and in case you didn’t already know it, several hundred millionaires and a few billionaires have gained their wealth through someone like yourself.

How did they make money off of me and if so is that all that bad? This is one of those gray area questions which can only be answered by you and what you want to have happen when you visit a site. Sometimes we knowingly give up some of our privacy when we sign up for services such as Facebook, Google or Twitter. These companies originally signed up users with policies assuring the public they are not going to sell of your private information. As time passed and advertising money spent, the policies have changed too. In the case of Facebook, there’s been a retraction of some of their marketing and sharing your personal information. This may change. As I wrote in an earlier blog post, Google is going to change their policy toward what they share among their various internal enterprises. This may also evolve.

There’s another more insidious less well known to the non-technical community sharing of your browsing and shopping habits. This is done through tracking your site visits and observing what you view. Small tacking data is placed on your computer which reports your online movements to companies willing to pay for these covert audits of your browsing behavior. If you wonder why the advertisements seem to know where you live and what you like to look at, its because some companies are tracking you and selling this information. If this bothers you, it does me, then I recommend you install Mozilla Firefox as your browser rather than Internet Explorer. Don’t use Google Chrome if you want your privacy. Next install this add on to the Firefox browser; Do Not Track Plus.

Next as a routine I use this software to remove items which are unwanted and usually get added without my permission; CCleaner. This will often times help your PC to run faster. Some of these tracking programs are like barnacles on the bottom of a ship and they too must be removed.

You might also want to click on the Tech Tab up above and check out my recommendations for My Top Picks in Tech Tools.

Related articles

• Mozilla Addresses Online Tracking With Collusion (webpronews.com)
• The Google Cookie That Seems to Come Out of Nowhere (blogs.wsj.com)
• Google Privacy Blocks Websites From Tracking You (ghacks.net)
• Google Reverses Course On Do Not Track; White House Pushes Privacy (tech.li)
• 4 Must Have Browser Addons To Protect Your Online Privacy (maketecheasier.com)
• Find out who is tracking you Online : Collusion Add On for Firefox (skywatchmelle.wordpress.com)

Hey Google What’s Up?!

It’s all over the news right now. Google is changing the way they do business with those of us using their services. They want to identify us more by combining all the collected data in software platforms in which they provide service. If you use Google search, YouTube, Picasa, Gmail, Google+, Google Maps, blogspot, etc., they want to aggregate individual data to be able to track, quantify and ultimately sell those capabilities to their paying clientele.

Sooner or later all of us in the tech universe should realize it comes down to making more money and when you have provided all these services and have the technical savvy which Google possess, it’s only a matter of time whereby the anonymous nature of the individual wanting to use their service is going to give up more of that anonymity to feed ‘the beast’. Facebook has been moving in that direction and now Google.

Effective March 1st 2012, if you want to continue to use their services you will be automatically agreeing with their new policy. You won’t be able to click somewhere on the screen to ‘opt out’. The only way to opt out is to close your account if it is provided by Google and quit using their search engine.

Want to learn more on what your options are and how this might affect you? Go here — Google changes FAQ.

Related articles

• How to prepare for Google’s privacy changes (cnn.com)
• What to do before Google’s privacy policy changes on March 1 – Macworld (macworld.com)
• Google Executive Chairman Warns Against Regulation (webpronews.com)
• Last chance before Google rounds up your web history (ctv.ca)
• Make Sure To Clear Your YouTube History Too Before March 1st! (googleexposed.wordpress.com)
• Big Brother Google (blogpackinglight.wordpress.com)