I am pulling the plug on my Facebook account. The discipline of writing will help me clarify my reasons and will hone my writing skills.
The root of my reason for choosing to not participate in Facebook is that I do not understand why "The Market" values the company as being worth almost $200 Billion. I can look at all of the companies listed above them in the S&P 500 and give a pretty good verbal sketch of how they make money.
- Apple designs integrated software/hardware/intellectual property that is highly desirable to "hip" consumers who will pay a premium.
- Exxon extracts dinosaur farts and turns them into fuel, lubricants and plastics.
- Google sells highly focused advertising space based on customer supplied data.
- Microsoft sells integrated software/operating systems
- Johnson and Johnson sell bandages
- Wells Fargo is a bank and generates profit from borrowing at low rates and loaning at high rates
- General Electric make turbines and a bunch of other stuff
- Chevron, same as Exxon
- Wal-Mart sells large volumes of goods at attractive prices. They compete via their logistical and buying leverage
- Procter and Gamble make money by adding water, fragrance and a fancy bottle to soap.
- JP Morgan same as Wells Fargo
- Verizon found a way to put a meter on teenager's inability to let anybody else have the last word.
- Facebook....I am clueless on how they make money or ever will make money.
Why do I think it is important
When I go to a yard sale I can see and touch the item I am bidding on. It is explicit. I bid a certain amount of money to the seller and he/she is free to accept or decline. We both have our own concepts of what the item is worth.
There is little hidden in the transaction. Oh, the gas line may need replacing but that is something I can discover if I am a good buyer and then I have the option of adjusting my offer price.
There is never a case of our consummating the deal and then having a Septic Truck back up to my basement and filling it with sludge as a hidden clause in the transaction. The yard sale is transparent.
"The Market" thinks Facebook is worth $200 Billion. Somehow they see Facebook as having the potential to churn out four or five billion dollars of profit every year out into infinity.
I do not see Facebook becoming a pay-for-service company like Verizon. There are too many other social media companies nipping at their heels. The LD-50 for social media companies appears to be about four years (does anybody remember MySpace?) and Facebook has already overstayed that.
The only other viable business model is for Facebook to become the private sector equivalent of the NSA. Your history let to the highest bidder without your knowledge or permission. I have no bargaining power because I do not know what data they are extracting and I have no reference to "price" what is being taken. They leave me two options: Be milked or head for the door.
There is little I can do to keep the NSA out of my knickers but I can "fire" Facebook.
And I did.