The question isn't, "What is Facebook worth?", the real question is what are we worth? The secret of Facebook is that there is no Facebook, just reams of user data, information voluntarily submitted by hundreds of millions of people in exchange for a free ride, which is monetized by a company that makes nothing except increasingly broken code, by selling ads to companies hoping to convince consumers to buy the products manufactured by their Chinese partners.
Behind all the flash and buzzwords is the promise of smarter and better advertising. The only thing keeping companies like Google and Facebook afloat is the same thing that used to keep magazines, newspapers and networks afloat-- advertising. And with users creating and promoting their own content, all the companies need to do is provide the connectivity tools, servers that stay up and an interface that people can figure out.
The products of this process have changed our lives, at least insofar as finding directions, having instant access to information and being able to interact with anyone we have ever known is life-changing. But so did the original communications revolution, which brought one standard of programming into homes across an entire nation, and made it possible to hear an event happening, even while it was going on.
The latest incarnation of the ongoing communications revolution is more flexible and less centralized than its predecessors because it no longer depends on massive corporations providing content to us. There are no more gravelly voiced announcers telling us what to think about the Vietnam War, in between commercials for sudsy soaps. Or rather they still exist, and if you are desperate you can find Dan Rather still blathering about Nixon and the Vietnam War on HDNet, a failed project of another Dot.com billionaire, and likely the only conceivable place that might still give Keith Olbermann a job, but they don't matter anymore.
Why bother spending millions developing content, whether it's a television cop show or a news anchor reporting from some officially "war torn" part of the world, to pull in a million viewers or readers, when you can let ten thousand people create their own content and pull in a million viewers that way, and the only cost is the physical and programming infrastructure to make it all possible.
If you think there's nothing good on television anymore, that's because there's no reason to make anything good for free television anymore. Network newscasts, the New York Times and magazines are vanity projects now. Some of these operate at a loss, the rest are battling diminishing revenues. They have no future and the easiest way to see that is by gauging the number of new newspapers, networks and magazines being launched.
That doesn't mean Facebook is the future, it's already the past. Without an economic relationship, the only way to lock in users is by providing a vital service that can't be easily shifted. There's nothing Facebook offers that qualifies; the morass of daily user interactions don't need to moved, its users will one day leave them behind. Its only staying power is user inertia, and that has no future. Google has managed to sink its roots far deeper into the lives of its users than Facebook, which, for all its intimacy, is just another waypoint full of user data, that, like milk, loses value after freshness.
Facebook is just another company with a bland interface, that started life as minimalistic before degenerating into digital design sprawl, which was heralded as the next big thing because it had a lot of users and it has a lot of users because it's the next big thing. Break that cycle and it no longer has a lot of users or is the next big thing.
The media-rich obsessions of a bored society turn bland neurotics like Bill Gates, Steve Jobs and Mark Zuckerberg into outsized public figures, as if they were the next Carnegie or Rockefeller. They're not. They're mildly clever toolmakers, adapting the work of more innovative thinkers, or paying others to adapt it. They're not personalities or empire builders, they're not even the smartest kids in the class, just smart enough to build a company based on doing one thing well and rarely learning to do anything else. That one thing can keep their idiot savant companies afloat, and lead to them being declared geniuses and trendsetters, but there's always another smart kid who has learned to do something else well, and that thing will also change everything.
Facebook is worth nothing and worth everything. Its value, like its content, is flash value, the explosion of the immediate, the unleashed energy of the moment. It monetizes the idle moments of people's lives, but it has no future beyond that moment. When the moment passes, it passes too. Its only power rests in the sheer size of its user base, in the aggregation of moments, the mayfly energy of distraction. So long as it appears to be growing, it appears to be of infinite value. When its growth stops, the collective moments will begin to diminish and the illusion will end.
The triumph of Facebook is the triumph of a post-media marketplace
where companies no longer know how to talk to users, and users are
always bored and always moving on to something else. It's the triumph of
accessibility and convenience for users and user data for companies
which are no longer in the manufacturing business, but in the branding
If everyone's products are being made in the same dirty alleys of China's factory towns by Chinese companies, which will
in a matter of months or years, roll out their own brand to Western
consumers, the conglomerates aren't really selling products anymore,
they're selling brands. The big letters on the can, the
"designed-to-death" logo, and the whole package of emotions associated with the brand.
Companies like Facebook try to lock in users with free services
in order to resell those users to American companies looking to
cultivate brand loyalty in order to resell those users back to the
Chinese manufacturers who actually make their products. Facebook sells
the ads while the company buying the ads feels confident enough about
its brand value to add 10 cents more to the price of
its detergent, gadget or jeans made in the same factories and sweatshops in
Asia as everyone else's.
The actual product being moved in all these exchanges is "You", the Western consumer being sold and resold down the digital river which flows all the way to Shanghai. Whatever new revolution is hatched in Silicon Valley, the ultimate beneficiaries are still the clean rooms of Asia where the technology that powers the revolutions gets made. Facebook and Google may come and go, and their data with them, but the manufacturers who make storing and moving the data possible are the short-term and long-term beneficiaries of every revolution.
Whether Apple or Google comes out on top is of small meaning to the Chinese industrial machine. Android or iOS still run on Chinese hardware, much like Mark Zuckerberg's own genetic code will. The future doesn't belong to the revolutionaries, it belongs to the machine of revolution, and the machine of the digital revolution is not in California, it's across the ocean. The short term benefits of technological revolutions may fall to the end users, but the long term benefits go to the manufacturer who uses it to build up its infrastructure.
Making our economy fragmented and individualistic; has also made it portable and destructible, and the tycoons with their massive data caches and user habit algorithms are only making it easier to sell Chinese products to America, not vice versa. The empires, like the data, are speculative, their value, like that of our currency, rests primarily in the perception of value. Its economy is increasingly our economy, a vast marketplace of numbers that runs on technology made in Chengdu, Huizhou and Shenzen.
An economy of brands has no future because sooner or later the perceived value crashes and then nothing is left but a hole where an economy once was.