Facebook Have Made A Major Public Mistake (And How You Can Protect Yourself From The Fallout)
Facebook have made their biggest mistake yet over the last few months. No, it wasn’t forcing everybody to use Timeline. What comes next may be even more obnoxious to their users. There is something you can do about it though.
There are inaccuracies in this article for people dealing with low reach. Visit Keep Your Fan Page Posts in the Facebook News Feed With 3 Simple Steps for actions you can take.
Their public offering last month was surrounded with hype. In total, their stock was worth about $104 billion dollars. Last year, they made $1 billion dollars in profit.
Forget the scale of the numbers for a moment. The crazy thing is that people thought it was a good idea to buy these shares at the time.
Even if every cent of Facebook’s profits went into dividends for the shareholders, the rate of return is still less than 1%. That’s comparable to current US cash savings accounts.
More likely, they’ll be acting closer to the average and using a third of their profits for dividends. That’s a rate of return of ~0.3%. That is pitiful. I can invest better by leaving money in my bank account!
Even worse for the first day investors – everybody has realized this and the share price is falling down the cliff. The total valuation is now around $60 billion dollars. So, not only have you made a bad choice, you’ve also lost almost half of the money you’ve sunk into it.
But wait, the 0-day investors are laughing. The investment bankers and their preferred clients got to buy stock privately when it was worth less than $100 billion (See A note to Mark Zuckerberg for more).
On to the future, you may have heard about the new expense of Promote your Page. Some fan page operators are now struggling to be heard by their fans. There is a solution for missing posts on the Always Upward blog but that only helps users, not the fan pages. Instead, Facebook is all but demanding that to reach more than 8% of people who have asked for your content, you have to pay.
It’s hard to miss the connection here. Facebook needs to turn its users into cash generating machines to avoid a burst bubble and a death spiral into financial oblivion.
How You Can Protect Yourself From The Fallout
You can do something now to protect yourself. Invest in your own site. Put the effort in now, so that you aren’t running around panicking when the world changes around you.
Even if you are just one person, get a cheap website with your own domain name. Do not rely on one company alone to provide you with your social network.
EDIT: This article never really fulfilled the promise of protecting yourself from the fallout of the Fan Page changes. Read more about how to fix it here.