From the Desk of Bob Caldwell

Why Facebook is essential in modern marketing

As many of you probably have already read, Facebook has filed their IPO in recent weeks and with $5 Billion worth of shares on sale, the company is values between $85-100 billion. At first glance that is a mind blowing figure; I've read several editorials in the past coup of days that pointed out that this means Facebook's capital valuation is 1.5-2X that of Boeing. This IPO will also make millionaires out of many Facebook employees--one notable example is that of a graffiti artist who, in lieu of cash, opted for compensation in stock for a mural at Facebook's first office; that stock will make him worth over $200,000,000. And of course there's Mark Zuckerberg, the co-founder and CEO of the company, who at the age of 28 is worth more--looking at stocks, properties, etc.--than Steve Jobs even was at the time of his death.

So why is Facebook worth upwards of a hundred billion dollars? Let's first compare it to other large names in the tech industry. Google and Microsoft are worth roughly double that amount, while Apple fights every-other-day for the title of "World's Most Valuable Company." Google is the most popular website on the internet worldwide--looking at the numbers, over 1 billion "unique" users visit the site each month. Facebook, comparatively, holds the number two slot with over 800,000,000 members and will reach the same level Google has currently in a matter of months. Either way, however, unlike on Google where people usually--of course there is GMail, Google Docs, etc. but that's not the majority of the users--spend 30 seconds to a minute at most on the site trying to find other sites. Facebook, on the other hand, holds the record for the website that users around the world spend the most time on--I believe I read last week that 1 in 5 minutes spent online is on Facebook. Unbelievable--yet at the same time, when I log into my Facebook account, which I use for business, I see other people that are "doing business" by posting random pictures, playing games, and chatting with their friends. Certainly that is one of Facebook's uses, but for business puproses (unless you are making these games or own Facebook stock) I do not believe the above examples are (a) doing business (b) productive. But either way, the big question at hand is why is Facebook so valuable? Easy. People trust their friends. Or rather, people trust their friends when they recommend services and/or goods.

So if you're not using Facebook for business my question is this: what are you waiting for?

Copyright 2012 Bob Caldwell, NMLS# 188544