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The Real Value of Facebook?

The Real Value of Facebook?

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There has been much wailing and gnashing of teeth over the recent Facebook IPO but less consensus over the long term value of the company. And bad news begets bad news. Even issues like outages gain national attention as if they were part of some deeper, darker story.

Have we forgotten that the real purpose of capital markets is to unlock long term value; not to satisfy the whims of short term investors? And yet here we are bashing the IPO and the company after just a few days. It's like judging a new born baby based on whether or not it looks sufficiently like its parents or siblings.

Sadly whether it is dotcom stocks, IPOs or houses we have come to expect to make money by flipping assets rather than investing in them. A boom and bust society has been the result with little growth in equities. It's hard to build long term wealth with a short term perspective.

This has other implications.

The long term transformational impact of technology generally exceeds the short term hype. In the case of social networking we have seen much hype but are nowhere near realizing the full potential.

Why is this potentially dangerous?

Because we often fail to see the full benefits of technology and so delay its implementation.

We recently passed an important milestone; the ability to store and compute almost anything. This means that many challenges we once thought impossible may now become attainable. And through ventures that may or may not have the word social in them, but may still bring huge social benefits in healthcare, lifestyle even the management of our economy, we may transform the future of our planet.

These initiatives need long term venture capital not short term day trading.

Facebook is an exciting opportunity in a huge long term shift in our global society to wards greaser collaboration, freedom and transparency empowered by technology.

Let's try and put a short term value on that.