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article imageOp-Ed: The new market hobby, or 'Trying To Figure Out Zuckerberg'

By Paul Wallis     May 18, 2012 in Business
Sydney - Facebook CEO Mark Zuckerberg has become the person most likely to be criticized by the markets every day of the week. That means the likelihood of the market misreading him is almost 100%.
The stock market and Zuckerberg are an unlikely couple, to say the least. In an earlier article this year I called the Facebook IPO a $100 billion blind date, and now we’re going to see if the relationship works or not.
The big problem is a clash of virtually alien cultures. Facebook isn’t your average IPO. The business issues are different, and it’s been monotonously obvious the market doesn’t know how to read them.
Then there’s Zuckerberg himself. He’s been mythologized, badly. Zuckerberg is everything many people loathe. He’s young, he’s extremely rich and successful, and nobody seems to get him. Even by the demanding standards of the tech sector, he’s different. He’s the standout bright kid in his class, another major discommendation. He’s about as popular as Bill Gates was when the book Hard Drive was published.
Analysing Zuckerberg has become a bad habit for business media. Like Facebook, he’s somehow expected to be anything and everything to everyone. He’s either now expected to be the Flying Nun or some sort of corporate ogre. The nearest thing to an objective assessment of Zuckerberg that I’ve ever seen was in a BusinessWeek article recently, “How Mark Zuckerberg Hacked the Valley”.
BusinessWeek made the effort to establish a comprehensible timeline for Zuckerberg’s moves and the rise of Facebook in a business sense.
Most articles about both Facebook and Zuckerberg tend to be local-specific case analyses, not whole package pictures. That lack of depth in context is going to be a continual problem for market analysis.
The record of reading Zuckerberg’s moves and Facebook as a business proposition is truly lousy:
“Social media is the Next Big Thing in marketing.” Well, is it? The fact is that the marketers have misused Facebook. Conventional marketing is way behind the times, particularly for the Facebook users. The Facebook generation doesn’t do “cutesy” or “real cool thtuff”. It doesn’t do “patronizing bits of fluff trying to pass themselves off as consumer interactions”, either.
“Facebook can be a single platform for advertising online.” Like hell. The commercial content on Facebook reeks. There are no incentives for the Facebook users to look at any of it. It breaks all the basic rules of advertising in terms of value for consumers.
“Facebook must generate revenue from other sources.” Gesundheit. A major platform should introduce big expensive revenue raising options on the basis of what, exactly? As half ass, badly defined ideas go, this one takes some beating. These things need testing before they can be considered credible.
Zuckerberg, the non-movie
One of the reasons for including the BusinessWeek article as a reference is because it’s actually a good look at Zuckerberg’s business savvy. Zuckerberg is a position player, not the average knee jerk “This looks good doesn’t it guys?” type of CEO. He parlayed Facebook from a dorm room operation into the biggest IPO in tech history.
No rabbits were pulled out of hats in the making of this IPO. Zuckerberg has waged a campaign of practical common sense and stayed very much in control. When he wanted capital, he knew how to get it. That capital has been steadily building Facebook into its current form.
The obvious fact is Zuckerberg, unlike his horrifically short-term brained contemporaries, looks ahead, and often a long way ahead. His moves, therefore, aren’t obvious. Market analysts should at least be aware of the fact that if they don’t know what someone’s trying to do, their analysis of the value of these moves is likely to be wrong or misleading.
For example:
Facebook and The Cloud- Facebook is likely to benefit greatly from Cloud capacity and capabilities. The Cloud can run things the internet can’t. You could have a Cloud Woodstock every day of the week and not even slow the servers.
Facebook and Client Relations Management- Instead of half-baked “come and see our Facebook page” crap, what the hell is wrong with “come and yell your head off and save us a fortune in class actions”? Most CRM systems are under used and often misused, and Facebook inputs can be easily monitored.
Marketing- “Come and see our Facebook exclusive offer!” as a way of establishing a Facebook presence- Yes, this is “duhhhhh” stuff, the thing that marketing should have been doing for years, and the idiots haven’t been doing it or even trying to do it. (I’m in the industry myself, a second generation ad copy writer, and it’s embarrassing to see an entire sector being so slow to pick up the obvious. 900 million+ people, and these morons don’t know how to connect with them? It’s appalling. It’s also a sign that the old marketing guys have to go, if they can’t get something as simple as this right.)
So, the story as it stands:
Will the stock market read Zuckerberg right? No.
Will the stock market analysts understand Facebook’s business moves? No.
Will success spoil Old Media and senile commercial thinking? No.
Start paying attention, you guys, because this is a new ball game. Forget the old models. This is the new stuff, and you’re going to be wiped off the face of the Earth if you don’t get it. Misreading Zuckerberg's moves so far hasn't been a great option. Misreading the Facebook business models is a worse option. Learn first, then analyse.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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