On Stocks and FB

It was only when I got here in Korea that I started to dream of owning financial stocks from which I can grow my hard-earned money from. And in the considerable time that I have been far from home, my exposure to the social media that is FACEBOOK has also grown considerably large. And my, do I mean large. I take a look at my photo albums and they are all shots from my (mis) adventures here. It has been a calming refuge, a great past time. So what’s the catch- stocks and Facebook?

Well, devoid all the financial expertise which I don’t have anyway, I actually told myself that if I had money to buy shares of any company, I might dig on Facebook. Its CEO however, stick to not engage in any initial public offerings (IPO) in the near-term.

Facebook, the famed online social media company, is just five years old. Yet it has grown heaps not only in the United States but internationally. 70% of the current 400 million Facebook users are from outside the social network’s home base in Palo Alto, California. Along with the growth of this social frenzy, controversies currently surround, most pressed of which are the privacy issues.

That’s what our incredible Harvard guy, Mark Zuckerberg, was intensely sweating for in this interview.

I still think Zuckerberg is an awesomely cool CEO at 26. It must be those curls.

Facebook has since gotten support from venture capitalists, and these cash-rich, high-risk investors have put in considerable investments on the company's growth and expansion. No wonder Zuckerberg is all systems go with every update and upgrades and updo's. No one would want to disappoint these investors.

Facebook received its very first donation from Paypal in June 2004 at US$500,000. In 2006, it raked in about US$25 million from Silicon Valley investors. And the supports go on as Facebook heads on with improvements and progress. The results of all the efforts may actually be gleaned more clearly now.

For one, Facebook's market share in the online social networking market has grown tremendously. In the Philippines alone, it dried up the long-running fan base of the once, coolest social networking site, Friendster. And in March 2010, Facebook made that milestone of getting more traffic than Google in the United States on a weekly basis.

Now that is a WOW. It faintly tells of how people would generally want to get information these days. Seems like everybody wants the straight talk over the quiet search and reads.

Now, the big question: Is Facebook really worth the share?

It should come in to anyone as outright risky. Facebook's beginnings resemble those IT firms in the DOT.com bubble of the early 2000's that amassed money to guarantee a stream of income for investors who are eager to bank on the bright spot of technology and the internet in the future. In 2008, Facebook revealed in its financial plans the release of US$200 million for expenditures on servers and storage, while earnings were only estimated to be at around US$50 million. Now that was even a negative cash flow right there.

Where and how will the company work on their profits, then? Advertising will almost automatically come into play, and it has actually been Facebook's main lifeline for revenues. I would even like to think that Facebook's issues on privacy stem from their efforts to increase advertising for added revenue streams.

Sure, the HUUUUGE number of users are there, but for social media, people have been as fickle minded as ever, ready to switch to another when they stop getting benefits or end up paying to get benefits. Facebook's wide database of competitors is always ready to welcome any shifters. So there is no way Zuckerberg is going to get any money from its million users. That is unless a bigger entity buys them up and just work their way on profits from there.