The superstars of Facebook are still extremely wealthy people, but the
shine that existed before their IPO now is no longer there.
The sector has been hammered on Wall Street with other big names such
as Groupon and Zynga and even LinkedIn also falling recently.
Personally I've always been suspicious of the sector, viewing it as
overhyped and seriously overvalued.
After reading reports about Facebook generating less than $6 per user,
per year, the company would have to either continue to rapidly add new
users (something that is not happening) or start getting "creative" with
data and deals. "Getting creative" is nothing new for the tech industry
and with the young management team there, that option sounded more and
more likely.
I used Facebook for a brief period of time but closed my account years
ago and never looked back. I tired of their squirly behavior including
who owns photos and information. Having worked in the tech industry for
over twenty years, I have a bad feeling about the actions that may come
in response to desperate attempts to pump up the numbers. Pressure to
deliver quarterly numbers make otherwise rational people do irrational
things.
It's doubtful this type of online interaction will go away but it's
simply not the earth shattering movement that people believed. Most of
these currently public companies will not go away but their values will
have to come back down to earth. They're all interesting, but not life
changing.
As their values decline, expect a lot more consolidation across the
board in this sector and fewer millionaires and billionaires being
created after 24 months. Coming back to reality is not such a bad thing
for anyone.
Bendy robot is master of disguise
