The Facebook Fraud

Is Facebook’s IPO prospectus real or some sort of confidence game being played by CEO and founder Mark Zuckerberg and his Wall Street bankers?

In a statement of intent as the social network announced its IPO, Zuckerberg said the site wasn’t created to become a company, but to accomplish a social mission – to make the world more open and connected. He added that Facebook is not focused on making money but wants to strengthen how people relate to each other.

According to the Zuckerberg, the IPO is about raising capital so Facebook can build more tools to help people to build and maintain relationships.

Zuckerberg goes on for a few pages like a great philosopher about to change the world.  It’s really all about sharing.

What happen to the days when Facebook wasn’t willing to let companies advertise on the site for fear of compromising its so-called mission?

If Zuckerberg and his Facebook minions were intent on its mission why don’t they share some of the IPO billions with the 850 million users on whose backs the site was made so attractive to Wall Street in the first place?  Or at a minimum – like Google – offer shares via a Dutch auction allowing ordinary investors to bid?

Who’ll get a piece of the multi-billion dollar pie? Many Facebook employees will be instant millionaires a few even billionaires.  The firms underwriting the offering, Goldman Sachs, Morgan Stanley and JP Morgan Chase, stand to make tens-of-millions on the offering. Certainly service providers in the Bay Area – real estate brokers, decorators, high-end car dealers – who have been chomping at the bit for a couple of years now as speculation about the IPO has mounted.

All off the backs of the site’s 850 million regular users who voluntarily give up their personal information, but stand to gain absolutely nothing. Well maybe not nothing, since Facebook intends to use part of the IPO’s proceeds to create more ways for them to “connect” with friends and hand over more personal information in the process.

Strip away the high minded rhetoric about strengthening how people relate, which in itself is bogus, what you really have is another way for corporate America to get into every nook and cranny of our lives.  Are we content to just sit back and have our every thought, feeling and relationship commodified to the benefit of Wall Street, Corporate America and Facebook?

Facebook’s ability to grow depends in no small way on continuing to attract new users and users continued willingness to disgorge personal information while being subjected to a steady stream of targeted advertising even as they engage in what they consider private activity. Facebook’s so-called mission of helping people build social networks is being funded by marketers using our personal information to encourage us to shop and consume.  Those two acitivities help us build and sustain relationships?

The social networking company is facing renewed scrutiny from consumers, courts and regulators (particularly in Europe) about how it handles information it collects from users. Are the public and policymakers finally waking up to the dangers of a company’s with a business model based largely on selling users (sometimes private) information to advertisers?  

Facebook has been compared to Google in its ability to appeal to advertisers, grow and generate revenue.  But the two companies differ in at least one fundamental way. Google is (or can be depending on the user) a gateway to further knowledge whereas Facebook is generally the gateway to the banality of most people’s lives.  For all of Zuckerberg’s extolling his company’s helping people relate Facebook may play more of a role in driving people apart or getting them addicted to the Internet and even murder.  According to three new studies, Facebook can cause mental health problems by offering an all-too-alluring medium for social comparison and ill-advised status updates.

Facebook is headquartered in the Silicon Valley berg, Menlo Park, named after the New Jersey town where Thomas Edison’s laboratory is located.  Edison’s inventions truly changed people’s lives for the better. I don’t think the same can be said for Facebook. Give me an IPO for a bio-tech company that has promising new drugs for Alzheimer’s or cancer or company with a promising new energy technology.  They would be worth a $100 billion.

About nobull

I am a journalist and writer. My writing has covers a wide range of economic, financial, business, political and public policy issues.
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