Facebook and Inevitable Change

by Richard C. Stimac

Mark Zuckerberg, founder and CEO of Facebook

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

Facebook went public for over $1 billion. I can’t tell you if that is a proper valuation and I doubt that anyone else can. What I can tell you is that the change in corporate culture will affect how the company operates.

A private company that is often personality driven, like Facebook has been, can reflect that vision of the one person. A public company is committee drive by the board of directors and reflects the vision of . . . no one in particular.

A private company can make long-term financial plans that may include short-term profit loss. A public company must increase its profit every single quarter or the stock price drops, investors panic, and the board of directors become more conservative.

In other words, Facebook has become just another corporation interested in safety of stock price, not innovation of product.

You might say, look at Apple. Exactly. Look at Apple. It ousted founder Steve Jobs, floundered, and then called him back and let him run the company as if it were a sole proprietorship.

Look at Google, you might say. Again, exactly. Google’s motto of “Do no evil.” was sound when the owners could forego profit in lieu of personal morals. Given the pressure to constantly increase profit, Google seems to have crossed the line (thick or thin) between good and evil.

Maybe Facebook’s stock is properly valued and maybe in the future the stock will increase in price. I don’t know. What I am certain of is that the way that Facebook does business will change in predictable ways.