Worrying about the fluctuating price of Facebook and whether Morgan Stanley properly managed the IPO misses the major historical and cultural point of what happened. What we should be asking is the significance of Facebook's opening capitalization (number of shares times price of shares, originally $38) at over $100 billion when the iconic New York Times Company -- which owns The New York Times as its flagship product -- is capitalized at less than one billion? Given that Facebook's original capitalization -- making it on May 18, 2012, the 23rd largest U.S. corporation -- is as much a predictor as a reflection of value, does this mean that investors are voting with their feet and fleeing traditional media for social media because they foresee not only the end of the print paper but the inability of the Times to sustain itself as a news source? While the average stock S&P price is $14 for every $1 of profit, Facebook's shareholders paid $100 for each dollar of profit. (Even today, May 27, 2012 with a price decline to slightly under $32 a share and capitalization of over $87 billion, it is still in the top 30 largest corporations.) By contrast, it is not clear if the Times Company is on the road to profitability.
I am less interested in the business model than the value our culture is putting on what is still perhaps the most important news gathering institution in the world versus the value it is placing on a social media company. For more than 115 years, The New York Times has been, not without bumps such as the misreporting of WMDs, our best diary of how our history unfolded day by day.
In an important way, Facebook is the anti-Times. The concept of the newspaper as paper of record also implies gatekeeping, by which I mean that the editors decide what goes through the Informational Gates into the daily print paper and Internet site, nytimes.com. In his column in the May 20 Sunday Times, Thomas Friedman seems to quote with approval Amazon.com's founder, Jeff Bezos, who advocates "eliminating all the gatekeepers."
But do we really want the death of gatekeeping? Within a democracy, we want forums for diverse views and much can be said for interactive media with audience comments. But we also need accurate and objective news and that depends on editors and reporters selecting and arranging available information. More than any other news source in the United States, the Times with its 26 foreign bureaus and experienced news staff provides foreign news. No doubt some independent bloggers are informed, and op-ed pages and major sites like The Huffington Post should include them in a dialogue. But that is different from ceding major foreign news to bloggers who not only don't know the languages and histories of the places they discuss but also have never visited those countries or interviewed key political figures. (In regard to gatekeeping, we might also note that authoritative historical and scientific books and articles also depend on knowledgeable editing and vetting).
If the blogosphere undermines the concept that editors control those Informational Gates, Facebook takes this even further by assuming we are interested more in each other's private and personal lives -- what we might call micro news -- than in international, national and even local news, and that we will spend more time reading about the health of our friend's dog -- the term "friend" is used loosely when many Facebook users have hundreds of friends -- or a minute by minute report on what music someone is listening to. One could argue that this information fills different needs, but many of my present and recent former Cornell students --and these are for the most part gifted students -- spend hours on social media, most of it on their smart phones; by their own admission, this takes time away from being informed.
This interest in the small details of life -- local news defined in its most reductive form --affects the major newsgathering venues that must engage its readers to sell advertising. With its expanded emphasis on its soft sections such as Style, Dining, Home and Travel, the Times today is as concerned with delivering what it thinks its audience and its advertisers want as it is with what it thinks its audience needs to know. This escalation of what the Times calls value added journalism -- where to eat and travel, how to invest and buy a home, how to find a partner -- takes its cue from social media in stressing the details of day-to-day life.
So when we hear that Facebook is worth more than 100 times -- or more than 87 times with the decline in its post IPO price -- what The New York Times Company is worth, we are not only hearing an economic fact but also learning something about the values of our culture. In 2012, we may be more interested in the warp and woof of our daily life -- often fluff rather than substance -- and we may be more motivated by our need to connect with one another on micro matters rather than to find larger goals and ideals informed by national and international concerns.
Author of the recently published Endtimes? Crises and Turmoil at The New York Times, 1999-2009, Daniel R. Schwarz is Frederic J. Whiton Professor of English and Stephen H. Weiss Presidential Fellow at Cornell University. He can be reached at firstname.lastname@example.org.
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