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Robert Hewson
Robert Hewson
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3 Things To Remember Before Investing In Facebook

Zuckerberg letter makes one thing perfectly clear: Investing in Facebook is about more than business--it's about funding a new worldview.

When Facebook’s long-awaited IPO announcement finally came last week, it was accompanied by an open letter to potential investors from Mark Zuckerberg, its enigmatic 27-year-old CEO.

This is how he chose to open the account of his company in the IPO document:

"At Facebook, we're inspired by technologies that have revolutionized how people spread and consume information. We often talk about inventions like the printing press and the television--by simply making communication more efficient, they led to a complete transformation of many important parts of society. They gave more people a voice. They encouraged progress. They changed the way society was organized."

From the outset Zuckerberg wants potential investors to know that Facebook isn't just any company; it's a company on a crusade.

[ Are you ready for Timeline? See Facebook Timeline: 5 Facts You Need To Know. ]

Facebook understands that all the things that provide a sense of purpose and meaning in our lives are deeply intertwined with our socialness. We evolved to function in social groups, and we're all hardwired into the cultural networks that surround us. (Elsewhere, The BrainYard has reported on how that culture applies to Facebook internal processes such as employee recognition and business intelligence).

What we call culture is the set of methods that have arisen in a particular group to help its members pursue their collaborative instincts. Culture is also a knowledge repository; we navigate the world not by knowing everything, but by engaging with the network of knowledge and experience embedded in our culture, as David Brooks explains in his book The Social Animal:

Top 15 Facebook Apps For Business
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Slideshow: Top 15 Facebook Apps For Business

We use intelligence to structure our environment so that we can succeed with less intelligence... it is the human brain plus these chunks of external scaffolding that finally constitutes the smart, rational inference engine we call mind.

Mark Zuckerberg knows that lines of communication are crucial in culture. Taking them away would be like taking synapses away from the brain, leaving a mass of useless neurons behind. Ultimately it's the pattern of connections between the countless data points that makes a culture smart, and if you want to make it smarter, it's not about adding more knowledge; it's about increasing the bandwidth. This is at the core of Zuckerberg's mission.

He knows that culture is always willing to reinvent itself and accommodate new technologies that enhance the connections across the cultural network; it happened with the printing press, the discovery of electricity, the telephone, and commercial airlines. What's more, the pace and scope of change on each occasion was faster and broader than the last, because it was operating through ever-improving cultural connections.

Today, the rate of change is breathtakingly swift and happens on a truly global scale. Internet culture has already embraced email, forums, chat rooms, instant messaging, blogging, and now social networking. Zuckerberg knows Facebook needs to stay ahead of the curve, which is why he has installed mottos such as, "Move fast and break things," and, "The riskiest thing is to take no risks" at Facebook's Palo Alto headquarters.

Facebook's filing confirms three things:

  • First, with 845 million users, $3.7 billion revenue in 2011 (a 88% increase from 2010), and $1 billion in profits, Facebook is a massively successful, hugely profitable, growing company.
  • Second, with Zuckerberg personally owning a 28% stake and holding 57% of the voting stock, it will very much remain under his express command.
  • Third and perhaps most importantly, it is a company that is not content with merely making money, it is a company that wants to change the culture and politics of the world, as Zuckerberg himself openly expresses in his letter:

"We are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few."

If you do decide to invest in Facebook, remember that you're investing in more than just a company. You're investing in a man on a mission to rewire society itself.

Robert Hewson (@robhewson) is researching a book on social media, due for release in the fourth quarter of 2012.

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AustinIT
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AustinIT,
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2/10/2012 | 8:55:33 PM
re: 3 Things To Remember Before Investing In Facebook
""We are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few."

Interesting point the Z makes and it fortells a possibly dark period in our history that may come to pass. Specifically that, like the Arab Spring or Occupy Wallstreet movements have shown, otherwise stable Governments may find it hard to function when group movements decide to skirt the established law in pursuit of their goals. The US is a Representative Democracy for a reason. Social Media = beware of unintended consequences...
IT Joe
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IT Joe,
User Rank: Apprentice
2/10/2012 | 4:04:24 PM
re: 3 Things To Remember Before Investing In Facebook
Facebook has really changed my life for sure. I get free stuff for farmville and I can see what beers my buddies are drinking, cars they bought, and thousands of family pictures. Not exactly rewiring society is it :)
Deb Donston-Miller
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Deb Donston-Miller,
User Rank: Apprentice
2/10/2012 | 4:33:08 AM
re: 3 Things To Remember Before Investing In Facebook
Right now, though, it seems like the natives are happily converting. I guess time will tell whether that changes.

Deb Donston-Miller
Contributing Editor, The BrainYard
Blewbury
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Blewbury,
User Rank: Apprentice
2/9/2012 | 9:57:22 AM
re: 3 Things To Remember Before Investing In Facebook
Spooky that Zuckerberg is unashamedly intending to change the world like a Victorian missionary seeking to convert the natives. Perhaps he'll get boiled alive.
Deb Donston-Miller
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Deb Donston-Miller,
User Rank: Apprentice
2/8/2012 | 11:01:09 PM
re: 3 Things To Remember Before Investing In Facebook
It will be really interesting to see how/whether this changes the company and if it will be the catalyst for the same kind of thing we saw in the early 2000s with .coms.

Deb Donston-Miller
Contributing Editor, The BrainYard
David F. Carr
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David F. Carr,
User Rank: Apprentice
2/8/2012 | 6:26:05 PM
re: 3 Things To Remember Before Investing In Facebook
See also: Facebook's Social Mission: Can One of AmericaG«÷s Biggest Tech Companies Pursue its Social Mission and a Massive IPO Simultaneously? | Dowser http://bit.ly/wsV2Ab

I originally saw this reprinted on the Christian Science Monitor's website.
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