Is Facebook Too Big to Fail? What is Their Business Model?

There have been a plethora of articles, opinion pieces and water-cooler conversations about Facebook over the past several weeks both in anticipation of, and in a post-mortem of, the company’s initial public offering (IPO). Some would say that any press coverage is good press coverage, but I am not so sure.

Two articles this week raise interesting questions. The first article, published by New Yorker Magazine, is entitled “Why I am Leaving Facebook.” Fellow blogger The Policy Thinkshop alerted me to this article, which tells the tale of yet another disgruntled Facebook customer choosing to leave the site.

This article made me wonder: Is Facebook Too Big to Fail? Facebook has become such an integral part of our culture, with people of all ages and backgrounds using the tool to connect with friends and family across the miles.

In a culture as geographically dispersed as the United States, Facebook serves to help us maintain relationships. Judging from the number of worldwide Facebook users, it seems to serve a similar purpose around the globe.

Facebook has changed how we build and maintain relationships, for good or ill. It seems to me that Facebook  is like Pandora’s box – now that we have all seen what can be, could we even put it back into the box if we wanted?

But the article in New Yorker Magazine does give reason for pause. The author reminds readers about who is at the helm of the company. Regardless of your thoughts on Mark Zuckerberg’s personal integrity, the author points out that a 28 year old responsible for making decisions about how to use your personal data can be a significant concern.

The author points out that young people can make reckless mistakes without an understanding of long-term consequences. I am no ageist, and believe that young people are capable of more than they are traditionally given credit for, but I so think the author provides food for thought.

At this point, the lure of keeping up with friends and family has led most of us to acquiesce to allowing our personal data to be used in whatever way the company chooses. It makes me nervous but, again, I am not sure that we can go back to a time before Facebook – I know that I would not want to do that.

The second article, an opinion piece in the New York Times, entitled “The Facebook Illusion” raises another interesting question about Facebook. Essentially, the article highlights the fact that the Facebook business model is not very sound.

To investors, Facebook promises access to billions of customers for online advertising. But I am an avid Facebook user and have never once clicked on an ad through Facebook. Who clicks on those ads? Judging from what we learned about General Motors pulling their advertising, very few people.

What do you think? What is the business model that Facebook uses to attract investors? Is it actually access to our personal data? What do you see as the future of Facebook? How attached are you to the program? Do you have concerns about the leadership having access to your personal information? Did the IPO experience make you think more about this? And how much of a services is Facebook providing for you and your family and friends? Would you be willing to leave Facebook or are you too enamored with the connections it enables you to establish and maintain? Do you see changes coming in the future? Where do you see Facebook in this future? Will it continue to be the market leader or will a different model come along and bump Facebook from its top spot?

I would love to hear your thoughts. Thanks so much for reading.

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Filed under Parenting, Relationships, Social Media, social pressures