Why Facebook’s IPO May Not Be A Good Thing

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facebook ipoThe recent Initial Public Offering (IPO) of Facebook was celebrated around the world. Mark Zuckerberg (pictured), the founder of Facebook, is “the man.”  He represents everything I wish that our Black boys would be, where you spend as much time grinding in front of your computer as you spend dribbling basketballs or busting rhymes in the studio.  It was sheer hustle, vision, and the willingness to bust his butt on late Saturday nights that now gives the 28-year old Zuckerberg enough money to buy Jay-Z‘s entire family 50 times over.

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In fact, Mark Zuckerberg will earn more money from interest alone in the next six months than Jay-Z has earned over his entire life, and he doesn’t even have to call himself a “n*gga” to do it.

Now that’s gangsta.
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With that being said, I had to put on my Finance professor hat on for a second to talk about the social network that everyone is talking about.  Facebook has changed lives, leading some people to think they have friends that really don’t exist or to create shallow relationships that clump together and provide a fraction of the satisfaction that comes from real human interaction.  Personally, I have about a few thousand “friends” on Facebook, and the sad truth is that I only know about .1 percent of these people personally.

With that being said, Facebook is very helpful to me and nearly anyone who uses it.  It helps to resurrect old classmates that you haven’t seen since they were 14years old, and it allows you to keep tabs on annoying relatives without actually having to call them:  “You know we had a baby, right?” “Yep, I saw all 75 pictures on Facebook.”

Facebook now has about 900-million users, far more than Zuckerberg ever imagined.  When you bring together that many people for that long, there is always money to be made.  That’s when the vultures of American capitalism get their claws into your idea — turning it from an artistic and meaningful vision — into gunky, bland, corporate slop.  Another great case-in-point might be commercialized hip-hop, which is no longer the beautiful art form it used to be.

Since the IPO, Facebook’s users have become less excited about the company.  In fact, Zuckerberg and company may be at risk of seeing its users sprint away to the next social media fad on the horizon.  Just three years ago, no one knew what it meant to “tweet” another person.  So, I’m sure there is something we’ll all be doing in 2015 that we don’t know how to do right now.  The point is that the move toward hard-core capitalism may end up shaking the very foundation on which Facebook was created, turning it into another Myspace-like wasteland.

In the field of Finance, all we talk about is capitalism.  Capitalism is powerful, like fire or a drug.  Fire can either cook your food and keep you warm or it can burn you and your family alive.  American capitalism has an insatiable appetite for revenue growth: No matter how much money you made last year, capitalism demands more, like a crack addict who wants to sell everything, abandon everyone, and smoke until he dies.

So the social networking site that was once a fun place to hang out will likely become so inundated with ads that it becomes a disgusting, uncomfortable user experience.

In fact, Facebook could easily become like Essence Magazine, an entity that once set trends and pushed the envelope, who now seems to have more ads than actual content.  I once hoped that Essence could maintain Black ownership so that its principals would realize that supporting the Black community was just as important as making another dollar.  Similarly with Facebook, it is at risk of being mutilated by shareholders who care nothing about maintaining the pre-existing culture on which the social network was founded.

Capitalism can be a good thing if it’s well-regulated and always considers a double bottom line.  There is nothing wrong with making money, but it’s also OK to have goals that go beyond financial gluttony.  Keeping a principled business model that leaves the door open to making the world a better place is always preferable to simply hoarding cash and entrenching yourself as part of the system that you once rebelled against.  Capitalism, at its worst, is designed to enslave people and make our lives meaningless, which is sad because you can’t take your money with you when you die.

I hope Facebook doesn’t fall for an addiction to capitalism, but the odds are already stacked firmly against it.   Capitalism is a powerful machine, and those who fight against corporate greed are typically spit out of the system and replaced by those who are with the program.  So, with the IPO, I said goodbye to Facebook and hello to something else.  I sincerely hope that I am wrong about this one.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and founder of the Your Black World Coalition. To have Dr. Boyce commentary delivered to your email, please click here.

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