The Hoodie by MC
Would you give a 28-year-old, who wears a hoodie, 100 billion dollar plus? We will find out later this week as Mark Zuckerberg goes about pumping many investing hands in New York.
We have been spared the conceit of Facebook’s initial public offering (IPO) being timed with the hoodied one’s 28 birthday yesterday. All indications suggest that the company will notch up an evaluation of 100 billion or more, which could also be taken to mean a little over a dollar for everyone of its some 900 million members.
With Steve Jobs gone and his black turtle neck and jeans having been retired from corporate folklore, we now have a black hoodie, slate gray T-shirt and jeans that Zuckerberg wears with nearly messianic nerdiness. There has been some chatter in the online media about whether Zuckerberg has been disrespectful of the Wall Street by not turning up in a more formal attire while seeking their cash. What the Wall Street sees is the more than $4 billion that Facebook makes in annual ad revenues because of suckers like me who are frequently drawn to “What’s on your mind?” box on Facebook several times during the day.
The IPO marks the onset of Facebook’s corporate puberty. Corporate puberty is a little more invasive than a cracking of the voice and sprouting of body hair. In a world where even a dollar does not come without strings attached, 100 billion will come with a massive burden of expectations. He can continue to wear his hoodie but his investors would expect that they earn enough out of him to sleep in their Brioni Vanquish II or Alexander Amosu suits.
I would like stick my neck out and say that Facebook has pretty much garnered its effectively addressable user base with its 900 million plus users. The sheer mass of that number is bound to act as a drag on the company’s dizzying trajectory. One of its obvious problems will stem from whether the ads that appear on the right hand sidebar really get value for the money for the advertisers. I do not consider myself a typical FB user by any measure but I have never bothered to even look at what they sell. I wonder whether Zuckerberg can afford to visually assault FB users by allowing far bigger and more intrusive ads for indifferent Facebookers like me.
The one billion dollar purchase of Instagram, which allows people to post photos directly from their mobile phones, has been much talked about for its value addition. I am not sure Facebook wants more photos either.
I suspect there is too much of everything on sites such as Facebook for people to really notice anything. A longer and sustained attention span is no longer a viable option and Facebook will have to make the most of impulsive updating that most of its users do to get in and capitalize. Experts believe that Facebook has not done enough to leverage its virtual currency Facebook Credits that users use to buy virtual goods. FB takes 30 percent of the transactions and earns real hard cash which last year touched topped $550 million. While ads are fine as a business strategy, payment would have to be form a significant part as well.
The point is Zuckerberg can wear to work what he wants as long as he justifies the projected 100 billion plus valuation by earning his investors a lot of money. Otherwise he may soon have to form a club with Jerry Yahoo! Young.