Going public is clearly the biggest thing on tap for Facebook in 2012, but the world’s most populated social network and its users have a lot to look forward to over the coming year. From the maturation of Mark Zuckerberg as a leader to Facebook’s growth as a media platform to a looming collision with the world’s biggest tech companies, 2012 is poised to be one of the most important years in the company’s short history.
Read on for our predictions for Facebook’s upcoming year, and be sure to add your ideas in the comments.
It’s safe to say that Facebook’s long-rumored IPO will be the biggest public offering of 2012. It could also potentially be the biggest of the current decade, if rumors of a reported $100 billion valuation and $10 billion raise are accurate. That would put Facebook in the top-three American IPOs for highest amounts raised.
Of course, an astronomical target does not mean a guaranteed blockbuster IPO for Facebook. Zynga’s unspectacular debut on the public markets in December has some investor’s worried that social media IPOs will generate less enthusiasm going forward, and that could affect Facebook in 2012. “It’s a very telltale sign of how people feel about social media IPOs in general,” Jeffrey Sica, owner of Sica Wealth Management in Morristown, said. “[Investors] have become very shortsighted. There’s a lot of fear in the market right now.”
Furthermore, today’s tech companies are raising larger rounds of private money more frequently before going to IPO, and are allowing private investors to trade shares prior to going public. That’s adding up to less opportunity for public investors once the offering hits the market. This is another reason why there was lower-than-expected interest from retail investors for Zynga, and could also be indicative of a lackluster future debut for Facebook, which has raised a whopping $2.3 billion from private investors.
It’s unclear what this trend of raising mega-sized rounds of private equity means for public capital markets long term. However, it is clear that entrepreneurs and early employees of the few tech companies attracting this sort of attention are reaping the benefits. And aftermarket stock sales have allowed some early employees and investors to cash in, pre-IPO. Facebook has already minted a number of on-paper billionaires that way. If the company’s IPO in 2012 is as successful at the rumored $100 billion valuation, Reuter’s estimates that Facebook will be home to at least 1,000 new millionaires.
The Next Steve Jobs?
Shortly after Apple’s iconic co-founder Steve Jobs died in October, Facebook CEO Mark Zuckerberg wrote on his Facebook profile, “Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you.”
Mashable executive editor Adam Ostrow wrote following Jobs’s death, “Although Apple and Facebook have had a contentious relationship, it’s hard not to draw comparisons between Jobs and Zuckerberg, both of whom dropped out of college and founded their iconic companies in their early twenties.”
Indeed, even before Jobs died, there was a sense that his retirement from Apple as CEO was a symbolic passing of the mantle to unofficial Innovator in Chief in Silicon Valley, and to the tech world in general. But to whom? Many pundits have prognosticated on that question and the answer usually comes down to one of four choices: someone we haven’t heard of yet, Amazon’s Jeff Bezos, Google’s Larry Page or Mark Zuckerberg.
When people ask, “Who is the next Steve Jobs?” they mean, from where will the next giant of the tech industry emerge? Who will be the next larger-than-life figure to drive innovation in tech, design and business for the next few decades? It might not necessarily be anyone from the current crop of big company tech CEOs, but of the candidates, a good case could be made for Zuckerberg. That has a lot less to do with Zuckerberg’s potential as a Jobs impersonator (though he is getting better at channeling Jobs’ confidence on stage), and more to do with his place among the next generation’s influencers.
Zuckerberg’s performance at the f8 Developer Conference this year, which included an on-stage lampooning from Saturday Night Live star Andy Samberg, illustrates Zuckberg’s generational advantage. Even though he clearly tries to match Steve Jobs’s charisma, his style is clearly not a one-to-one emulation — and that’s okay. In fact, that’s exactly why Zuckerberg might be the next Jobs: He understands his consumers in ways that competitors have yet to grasp, and that edge has helped him to win the innovation war in social networking thus far.
Facebook vs. The World
Facebook has been on a collision course with the world’s biggest tech companies for a long time, and that could all come to a head in 2012.
The company will fight Apple in the mobile space, where a focus on HTML5 and a recent acquisition of mobile platform developer Strobe (makers of SproutCore) is positioning Facebook to be a powerhouse in the mobile space, ideally by delivering a rich user experience across hardware platforms. One big advantage Facebook can offer that other platforms can’t? Massive amounts of social data and one of the biggest installed user bases on the planet.
Facebook will fight Amazon and eBay in the consumer space, with the continued expansion of Facebook Credits, which are already being used to sell all sorts of digital content, from in-game items to movie downloads. For now, Credits can’t be used in the purchase or sale of physical goods, but as retailers like Amazon expand their footprint into digital, they’ll start start to bump into Facebook. And Facebook credits are already sold in stores. Therefore, using them for physical purchases might not be far behind, especially as they get added to mobile payment systems.
And they’ll fight Google on virtually all fronts. Both Facebook and Google are advertising-driven businesses, but Facebook’s revenue is a drop in the bucket compared to Google’s. That could significantly start to change in 2012, as Facebook rolls out new ad formats and more agencies shift traditional media buys to online advertising. Yet Facebook does face an uphill battle when it comes to convincing big brands to pay for advertising products when they’re accustomed to free Facebook Pages .
Facebook Becomes the Media
Somewhat lost amidst Facebook’s new Timeline buzz, three other developments in 2011 fueled Facebook’s aspiration to become the destination for all media. First, Facebook launched an update to its Open Graph protocol called Gestures, which essentially allows users to [verb] any [noun]. Or in other words, websites are no longer constrained to just allowing users to Like items. Now users can read, watch, listen or perform any other action around the web.
Third, Facebook offered an update to the News Feed called Ticker, that serves as a real-time feed of activity away from Facebook. Taken in tandem, these updates indicate Facebook’s growing desire to be to discovery what Google is to search — that is, the market leader for the new dominant form of currency on the web. In the previous decade, the link was the main way to pass information around on the Internet. Google figured out how to harness that information and turn it into a highly useful search engine. In today’s social media-driven world, the link is being replaced by the social recommendation (and more broadly, by the social action), and Facebook is attempting to build a discovery engine around that idea.
In other words, Facebook isn’t going to be a creator of media, but it will be the ultimate curator.
The Future of Timeline
Of course, that hoopla for Timeline was warranted. Facebook’s radical redesign of the profile page marked a huge departure from the traditional design, which in spite of numerous changes and updates, had maintained the same basic UI concept since Facebook launched.
The new Timeline is about storytelling. “Timeline is the story of your life,” said Zuckerberg at the f8 Conference. It’s a “new way to express who you are.”
That, of course, gets to the heart of Facebook’s oft-stated goal to make the world “more open and connected.” Here is a new profile that encourages you to share even more about your life by documenting and organizing everything you do. (Not coincidentally, that also plays right into Facebook’s advertising-fueled business model.)
What happens to Timeline in 2012 would be as difficult to predict as Timeline itself would have been this time last year, but it’s safe to assume that Facebook’s recent acquisition of Gowalla will have an impact on the future of the site’s profile design. With Gowalla, Facebook acquired a team of designers and developers that had created an unquestionably beautiful location-based social network with the stated purpose of helping users document their travel (both locally and abroad). Put another way, Gowalla was made for telling stories about the places you went.
Facebook didn’t specifically acquire the technology behind Gowalla, but it did say that it was “sure that the inspiration behind Gowalla will make its way into Facebook over time.” Smart money is that parts of that “inspiration” will find its way into Facebook as improvements to the storytelling functionality of Facebook Timeline and Facebook’s mobile applications.
Special thanks to Brian Carter, author of “The Like Economy,” who helped me codify my thoughts about the future of Facebook.