I recently posted a piece speculating what floatation might mean for Facebook. At that time my view was that the brand’s biggest asset was its followers, many of whom had an irrational, emotional attachment. Many of these fans were likely to want a slice of the business in the same way that football fans buy shares to take a stake in their club. My concern then was that businesses must change their nature once they replace entrepreneurial flair with accountancy expertise, and it is difficult to avoid alienating that big fan base – the vital brand asset.
Though it did not take a financial genius to assess that the valuation was way overstated, I guessed that the fan base would not be too concerned as their emotional attachment would justify the premium.
Unfortunately we did not foresee murky waters through which the IPO would float. When your biggest asset is the unconditional regard of your stakeholders the potential for damage if you are seen to hold them in contempt is huge.
It was always going to be a difficult line to follow, but it was a shock to see such problems so soon.
It remains to be seen what the long-term impact will be for the brand. With the arena becoming increasingly crowded, there are plenty of other harbours for the disaffected to shelter until the storm blows over. I’m sure Facebook is hoping for better weather and very soon.