An auditor visiting Earth from another planet might be gobsmacked at what our society considers to have economic value. Indeed, the nearly $100 billion envisioned IPO of Facebook could capture the attention of an inquisitive stranger from a distant galaxy, causing him to wonder not only about capital formation, but about social values. With that valuation, the upstart social media enterprise would suddenly be about equal to Abbott Laboratories or Citigroup in value, with only 26 of the Fortune 500 having greater market capitalization.
The need to communicate is as old as homo sapiens. Since the Stone Age, our species has needed to reach out and touch others. Hirsute, carnivorous prehistoric Man may have felt loneliness in his own way, hoping to relate socially in caves and at campfires. Much later and over the centuries, inventions such as the printing press, telegraph, and telephone permitted more widespread social interaction. And now, at the outset of the 21st century, the art of communication is made even easier.
The expected valuation of Facebook shows how powerful is the human desire to liaise and interface. Once the hype quiets down, it may be worthwhile to ponder why a huge array of software, servers, and electrons traveling at the speed of light could be worth so much, while other American companies in basic industries are imperiled by competition and loss of market share. Why is it that smart, young geeks can suddenly become so rich, while those smart, tried and true folks who work hard and retire to bed early struggle for economic stability and fulfillment?
A principal value proposition of Facebook is to allow the shy to assert themselves. A socially awkward person can blossom into a digital socialite, with a few clicks of a mouse. Where else can a minnow look like a whale, a solitary extremist look like the Chinese Army, and a clumsy person look like a tango instructor? Indeed, phalanxes of the social hermits of yesterday now sit mightily in their comfortable high tech enclaves, the bland, light gray cubicles that Dilbert championed. Some even manage to eat several meals a day there. Facebook is their triumph and confirmation that intellectual capital is worth as much or more than time honored physical capital formed the old-fashioned way -- with distribution having enormous potential for advertising revenue. And so one generation trumps another.
Facebook is indeed the affirmation of the erstwhile undemonstrative, and their numbers could be in the billions. The market is of course not just in the United States, as there are many timid people in Brazil, Russia, India, and China, known as the BRIC countries, where there are massive youthful populations yearning to copy, connect, and join the mainstream of globalization.
The ascent of Facebook should also be seen in a broader context: a new technology-focused generation values the ability to liaise and conduct self-display more than privacy. Part of this culture is the obligatory panoply of digital kit, designed to amuse and release the human spirit.
Packing iPods and Velcroed iPhones, they glide effortlessly from Facebook page to Facebook page. When not downloading the latest new apps, they may listen to music and text simultaneously on a handheld, even while crossing against the light -- all the while thinking it new found productivity called "multitasking." With fingers pounding in a furious atavistic dance, they immerse themselves in a digital frenzy, limited only by telecommunications capacity and their number of thumbs. And ease of access to cyberspace allows the conflating of data with information with knowledge with wisdom. Add some hypercaffeination with macadamia lattes and extra foam, and you have a heady brew of technology and consumerism.
Finally, another value proposition of Facebook is to promote democracy, as it makes it more difficult for governments to assert control and repress their populations. One dissident with a popular message going viral can create a tidal wave against an established order. The 20th century was unkind to despots, and the 21st is no different, as we see from the Arab Spring. But there is also a dark side: snooping governments can find out who peoples' friends are, and recruiters can search Facebook to see who has outlandish behavior in the public domain.
The potential of Facebook is as vast as the universe itself, about which we thus far know relatively little. In the event that there is life elsewhere -- in the Milky Way Galaxy and possibly in billions of other galaxies -- Facebook has massive export prospects. The only trouble is that instead of instant gratification, it will take many light years to reach out and touch.
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