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Thursday, May 31, 2012
Jeff McMahon, Contributor
From Chicago, I cover green technology, energy, and the environment.
5/31/2012 @ 6:49PM |210 views
Why Facebook's IPO 'Hiccup' Doesn't Matter
Howard Tullman, president and CEO of Tribeca Flashpoint Media Arts Academy. (Image credit: Getty Images via @daylife)
The $21 billion slide in Facebook’s value since its IPO last week doesn’t reflect the social media platform’s outlook, according to the CEO of Chicago’s Tribeca Flashpoint Media Arts Academy.
Compared to the internet’s other giant, Google, Facebook has the winning formula for the present and probably the future, said Howard Tullman, president and chief executive officer of the Flashpoint Academy, which he describes as a “two-year, high-end school for digital maniacs.”
“Simply stated, Google is a rear-view mirror. Facebook is a sniper scope,” Tullman told academics and business people gathered at the Northwestern University Kellogg School of Management’s KIN Global conference today.
“And that’s why we’re seeing this enormous shift of display advertising to Facebook that’s in the billions already and accelerating.”
As Hayley Tsukayama wrote Thursday afternoon in the Washington Post,
Facebook’s IPO was supposed to be the deal of the year. It was expected to be a boost for the state of California. And it was poised to become the bellwether moment for Web 2.0 companies looking to make it on the stock market.
We all know what happened. Facebook came roaring out of the gate two weeks ago, jumping to $42 per share before taking a deep slide. On Thursday, the stock was trading at new lows, though it recovered slightly to close at $29.63 per share.
But the IPO and subsequent slide matter little in the long run, according to Tullman:
“They’ve had some interesting hiccups with the IPO, and it doesn’t really matter at all,” he said. “Facebook is winning. Why are they winning? Because Google is a system that was built by a bunch of engineers, and it’s algorythmic, and it’s looking backward. Whereas Facebook has the easiest job. Everybody volunteers: here’s who I am, here’s what I want to buy, here’s who I’m connected to, here’s how to influence me.”
“Facebook is winning, and the reason Facebook is winning is that the average American spends more time on Facebook than on just about everything else combined. And if that wasn’t bad enough, we live in a winner-take-all technology world where, as the winner pulls away, people abandon all the add-ons.”
Tullman is also a serial entrepreneur, chairman and CEO of Experiencia, Inc., general managing partner for Chicago High Tech Investors, LLC, president emeritus of Kendall College and an adjunct professor at Northwestern University’s Kellogg Graduate School of Management. In 2010 he added the word Tribeca to the name of the private college he launched in 2007 after Robert DeNiro’s Tribeca Enterprises took a 50 percent stake in the school.
Northwestern’s KIN Global conference is an annual invitation-only event devoted to fostering prosperity through innovation. Tullman spoke on a panel on “Transforming the Future” beside former executives from Kraft and BP and a dean from Northwestern’s RR McCormick School of Engineering and Applied Sciences.
Originally the World Wide Web was about “anonymity and links,” Tullman said, but Facebook changed the Web because it was the first major platform to require people to be themselves online. That proved crucial as privacy concerns diminished and people volunteered more and more personal information. Now the power of personalization, and the convenience of having personal information online, in one place, has developed its own momentum.
When paramedics show up to help you with a medical emergency, Tullman asked the audience, do you want them to have access to your medical history or not?
Facebook stands to gain the most from this trend because lazy people deplore redundancy: you can continue to enter the same information again and again, or you can enter it once, and Facebook is best positioned to provide that entry point.
Facebook Connect helped the platform secure that position and also allows Facebook to track the popularity and progress of every other business that participates.
Facebook continues to come up with ingenious ways to convince people to divulge more information, Tullman said—like Timeline, which begins at each user’s birth, compelling the user to fill in the blank years with more personal history.
“Facebook is just crushing it.”
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SPECIAL THANKS TO BEN S AND LINDSAY D FOR ALL THEIR HELP IN MAKING THIS HAPPEN AND TO ALL OF THE STUDENTS WHO SUBMITTED ARTWORK FOR THE PROJECT.
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