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Why I Didn’t Attend The Facebook IPO Party

|Includes: Alphabet Inc. (GOOG), GRPN

SOURCE: VantageWire.com - A few weeks ago, I got an invite from my friends Mark, Dustin, Sean and Eduardo to attend a party in their honour. It was to be an open-house type of affair, where everyone was invited and could take part in the celebration. There were rumblings of this being the biggest party ever, with plenty of people leaving happy and having been 'poked' once or twice. The invite was for Facebook's Initial Public Offering.

At first I didn't want to let my friends down, so I clicked my response as a 'Maybe' to their request. I left it that way, as I perused the guest list of attendees. Thirty percent of the attendees were going to be employees, who I wouldn't know what to talk about with, as they kind of speak a different language than I do on a day-to-day basis. Another ten percent were from a Russian VC called Digital Sky Technologies, and again a language barrier arose. Now, I didn't mind seeing that the Accel Partners were going to be there, but it did concern me that there would be some members of the Goldman Sachs gang there. I've been to parties where they've been involved before, and sometimes they can get a little pushy, and there never seems to be enough room at a party to avoid them.

Normally I automatically dismiss each invite to participate in anything Mark suggests, out of spite, and maybe just a little jealousy. Recently he'd been giving me the hard sell on his Timeline feature, which I refused to go along with. Little did I know that he would go ahead and install it for me, despite my wishes not to do so. On many different occasions, Mark and his friends have gone ahead and changed the boundaries of our friendship and the respect for one another's privacy. And I'm not the only the one that feels this way about his treatment of those in his giant ring of friends.

So when Mark and his cronies invited me to this IPO party, I'll admit I was a little bit stunned. Normally, he's a bit greedy, and likes to keep things to himself (just ask my other friends, the Winklevoss twins). What could Mark possibly need our praise and support for at this stage in the game? Normally IPOs are for when you need to expand outward, to grow, and need the support of the public to make those goals come to fruition. At this stage in the Facebook story, I can't see what they could possibly need the extra money for, unless they're trying for a Napoleonic run at controlling the world's Risk board.

Many people are making comparisons to the Google (NASDAQ:GOOG) IPO of 2004, but they're mistaken in doing so. Google has a different business model, and is at a stage where it won't be taken out by competition any time soon. Facebook, on the other hand will constantly have competition in the Social Media realm, and with each privacy infringement, it'll eventually get closer to a shutdown on growth. There's only so much your friends' updates can do for you, but if Google shuts down for a day or two you will really feel it. Facebook goes down, and everyone's free from the shackles for a day or two. But strangely, yesterday's IPO put a value on Facebook higher than Google. And it's this fact that concerns me. Other than hype and fanfare, what does Facebook present that's more important than Google?

You see, Google deserved our attention; it earned it on hard work, innovation and making things easier. Google has changed the way we use email, shop, watch videos, search addresses, and even the way we look at the world as a whole. Facebook has made us more inclined to share as much information as possible, and from an advertiser and creepy overlord who wants information about its minions point of view, it achieves this very well.

There will be a lot of comparisons to Google. For the dreamers of getting rich off of Facebook, ask yourself how Mark and his party will quintuple your investment. Google did this for its investors. It opened at $100 in 2004 and is now over $546, and has hit highs of $714 in the past. How will Facebook do the same? While people like my older relatives are slowly trickling onto Facebook these days, others in my social circle are abandoning it in droves… moving over to Google+ for that matter.

So, yesterday came and went, and I eventually clicked "No" for my RSVP to the Facebook party. Perhaps it'll be an awesome event that I'll have missed out on, but I doubt it. Instead, I left my options open for a better invitation; One that doesn't have as hefty of a cover charge.

G. Joel Chury
Editor in Chief
VantageWire

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.