845 Million Reasons Facebook Should Open its IPO to Retail Investors
Posted by
Beth Kurth on Tue, Mar 20, 2012 @ 08:05 AM
Sure Facebook was built “to make the world more open and connected” as per the letter from Mark Zuckerberg in the company’s S-1. But Facebook is also a daily meter of consumer confidence, retail intention, voter preference and consumer confidence. It’s Nielsen Ratings meets Gallup meets University of Michigan Consumer Sentiment meets Pew Research.
How unfair to all these long-time polling organizations who have built up staff and expertise dedicated to extracting behavior and then along comes the Facebook audience, over 800 million monthly average users, voluntarily providing real-time data.
Gallup highlights its 1000 interviews per day, 350 days a year. Sounds good until you look at some other numbers. Like Facebook’s 2.7 billion likes and comments.
Consider, when’s the last time you answered a telephone survey? Imagine a polling organization that never has to conduct outreach. Just sifts and sorts the real-time opinions of millions of unpaid contributors. What would this combination of reach, relevance, social context and engagement be worth in terms of revenue? It’s right there on page 40. Facebook collected $3.7 billion in revenue from this force of volunteer focus groups.
We say it’s time for Facebook to give back. To consider compensation for its 845-million contributors. Facebook should invite retail investors to participate in the IPO.
Not only is this a reasonable act of reciprocity, it’s also one that will pay off longer term for Facebook. First, it will keep ownership more widely distributed and therefore make it harder for institutional investors to enforce demands on the company in the name of “shareholder value.” Second, “investomers,” customers who are also investors, are more loyal than customers who are not.
And one of these days Google or Apple or some company that is still a twinkle in its founder’s eye, will mount a real challenge. At which time Facebook will need its friends more than ever.