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Of course, that’s the key to all the hype: the idea that Facebook is simply different. But in important ways, it’s just another company. In some areas, it faces tricky competition, for instance in making money from people using it on mobile devices. In others, it has become so dominant that it could easily run into Microsoft and Google-like antitrust headwinds. And as an investment proposition, there’s the long-term worry that if Zuckerberg doesn’t manage to keep making shareholders richer, his control is such that there will be precious little they can do about it.
Grouches of this kind look unlikely to derail the Facebook juggernaut as it steams towards its debut on the Nasdaq market. The excitement may well send the stock well above the actual IPOprice when it starts trading. It’s after the hype has worn off, when the faithful may have reason to ask questions, that skeptical investors might want to take a fresh look.
Richard Beales is a Reuters Breakingviews editor and a contributor to the e-book “Facebook: A ‘Like’ Story – Why investors shouldn’t fall in love” by Breakingviews columnists, published on May 8.
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