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Jon Friedman's Media Web

Take this Facebook IPO and shove it

5/18/12 12:01 AM ET (MarketWatch)

Reuters

NEW YORK (MarketWatch) -- The Facebook initial public offering fireworks are being lit by one factor alone: greed.

Believe me. I know.

The other day, my broker, an amiable fellow, breathlessly called me to say I could get in on the big Facebook IPO because his firm was involved. I should've realized that every securities outfit under the sun has or will claim a role in the deal, as a way to encourage clients to jump into the warm, sparkling water.

For a split-second, images of winters in the tropics and summers in the mountains danced in my head as I computed how much money I could make by getting in and then getting out. I was as greedy as hell for a moment.

Fortunately, cooler heads prevailed. I told the broker that I couldn't buy Facebook stock, even if I'd wanted to because my company's ethical policy precludes journalists from owning stock in companies that they're writing about. My editor reassured me that this applied to Facebook and me. Thanks heavens, too.

Thank heavens, because I think this public company's prospects are problematic. This is a company which has yet to prove that it can generate profits quarter after quarter. Yes, in other words, it is a lot like every other IPO that has come down the track -- with one exception. Facebook is getting the full-court-press treatment. The hype machine is turned up to its maximum capacity.

Facebook is the latest siren song coming from Wall Street and Silicon Valley. Investors' portfolios are littered with the debris of can't miss IPOs.

And my problem is not that Facebook head Mark Zuckerberg likes to thumb his nose at road show convention by wearing his adorable, trademark hoodie when he talks with the button-down Wall Street men and women. He could wear a Speedo and it wouldn't matter, if he had something I wanted to buy. (Maybe not clad in a Speedo, though, on second thought.)

I wonder about Zuckerberg's ability to be a dynamic, unflappable chief executive of a company as scrutinized as Facebook. Not to sound like a reverse ageist, but he is only 28 years old -- which worries me. He hasn't had the management experience yet to give me confidence to believe that he can withstand the typical problems that beset public companies – such as bear markets, Washington's inevitable interference, public scandals of whatever stripe and an ability to speak Wall Street-ese to the people he'll need on his side in the post-IPO process.

What can be feel sure about when it comes to Zuckerberg? Can we entrust our money to him and still sleep easily at night?

I suspect that Zuckerberg has simply become one of those media celebrity CEOs, thanks partly to the big success of "The Social Network," a smart movie depicting Zuckerberg's ascent. Whether or not you think Hollywood treated him kindly -- he didn't look very nice -- is immaterial. What matters is that the film added mightily to his image as a superstar CEO.

Facebook, meanwhile, has the big buzz. According to the Nielsen company, it passed MySpace in January 2009 to become the leading social network/blog site for the first time. And Facebook has remained at No. 1 ever since.

I am not a Facebook-basher, by any stretch. I am as faithful a user as you'll find. I am plugged in while I'm at work because everyone else that I know is, too, including the kinds of media executives I can get to without having to seek out their public-relations people. Wall Street would like us to believe that Facebook is the next link in the Apple-Google chain.

But Facebook isn't Apple (AAPL) , the most dynamic stock in the equities market. Apple has loads of popular products that people think they can't live without. A large part of Apple's explosive success hinges on the idea that Apple's wares are also status symbols, which adds to the company's geek-chic appeal.

Facebook is no longer cool, though. It is a useful way for us all to communicate, and I appreciate it. But I could "get off" Facebook tomorrow and live a productive life. It is not essential to us.

To its credit, Facebook has all but thwarted Google+, Google's (GOOG) answer to Facebook's empire. Google+ hasn't quite caught on in a meaningful way in our society because it wasn't a clearly superior alternative to Facebook. There will be other challenges to Zuckerberg's dominance.

But those challenges certainly won't come from any of the get-rich-quick investors. They are preoccupied with thoughts of how they're going to spend their windfall.

Facebook has nothing to worry about right now. It has Wall Street banging the drum for its IPO, and everyone is giddy with greed.

Not me. I say: take this IPO and shove it.

MEDIA WEB QUESTION OF THE DAY: Will you buy Facebook's shares?

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