In 2 Months, the company lost $45 Billion plus dollars of its market value. I do not know of a company that lost so much in such a short time, in a reasonably not unstable stock market.
All because people believe in registration and usage of a web site.
First lesson of web analytics is the following:
I remember Bill Gates in a media participation saying 'do not go after just clicks or number of people' in response to opportunity areas in the internet.
Can you guess what that company is?
The truth is that the consumer benefits of companies such as this that have the largest consumer platform to reach a huge population of the world and the potential of such a platform is indeed only limited by the creativity of the executives.
Yet, the company is not able to use the platform be a platform of product and services exchange in a fair and fun world. It may be just a matter of time.
Why is it not able to use its platform to let others market their product in an effective way?
What kind of marketing strategies and web presence and consumer web behavior it can not tap into?
The other point is not all consumers are equally valuable for any company, and US consumers are the market leaders to establish the value of a company in a significant consumer level ROI in the early stage, which means the company has to prove its marketing platform on the basis of 200MM US members (i think it is probably between 100MM and 130MM, a probabilistic statement based on experience and some general pareto type rules); we are all getting carried away by the number 900MM registrations. Out of 130MM, I think the active users are 25MM, which is a lot and out of which the advertisement valuable segment is likely 10 MM. This is just a wild prediction of numbers; but I trust this than 900MM numbers.
Well may be 25MM, depending on how one defines value of a consumer.
In the end it is probably not even about its shrewd marketing process.
The first lesson of web presence or freemium web services is the following:
You have to provide value to consumers beyond your free space in an unequivocal support of a consumer on his/her privacy. It can not be just sharing photos or videos or message wall, which many platforms can do and in fact once the fascination is over, the fall off from the cliff can be very devastating.
What do you think one thing the company can do to regain its confidence among its users?
I honestly believe the value of Facebook is beyond imagination; but to be relevant to consumers is never an easy job. We all have to know how to go beyond hypes so that the volatility in the value of such business models are not too much.
Update - May 2013- : Finally Facebook is turning around and is going to be one of the greatest rides, as it leverages the platform. Welcome aboard folks...
Time to buy Facebook; it is already late. This is all driven by aggressive approaches to leverage Facebook platform.