All of the pre-IPO hype and post-IPO letdown completely misses the point when it comes to Facebook. Although Wall Street may see it differently, Facebook's main task is not about making a quick buck. It's about slowly and methodically building a sustainable business that's both financially profitable and socially useful, long into the future.
That's of little solace to the investors who paid as much as $45 a share for Facebook on opening day, which, for a few moments at least, valued the company at more than $133 billion. On paper those folks lost money by the end of the day and even more as the stock sank on Monday and Tuesday of the following week before rising a bit on Wednesday.
I don't know what Facebook is worth today, and I don't care. Because that type of short-term thinking has nothing to do with what it takes to build a great company. To me, Facebook's value can be measured in far different ways -- how well it's serving its members, how its treating and compensating its employees, its social impact on society as a whole and, of course, how well it's positioning itself for the future.
When I look at Facebook, I don't think about price-to-earnings ratio, but of how it's changed the world for both better and worse, and how nearly a billion Facebook users are using it to enhance their lives and the lives of those they care about.
I think of the activists in the Middle East who used Facebook as a tool to help bring down oppressive regimes. I think of how social activists in the United States are using it to improve the environment, protest inequalities and effect positive social change. I think of how students are using Facebook to form study groups and how creative teachers are using it to enhance and supplement what they do in their classrooms. I think about the grandfather who gets to see regular photos of family members, the soldiers who keep in touch with their families, and people dealing with illnesses who use it to get support and life-saving advice.
I also think about some of the darker sides of social networking, including people using Facebook to reveal too much personal information or post pictures or text that could get them into trouble now or in the future. I think of the vast database that Facebook is amassing that can be used not just to send us targeted ads, but also to track us online and predict our actions. In the wrong hands -- such as an oppressive government -- that much personal data could have devastating effects.
I worry about people who spend too much time on Facebook and not enough time doing productive things like hanging out with friends and family or getting enough exercise.
Like those who trade Facebook stock, I see a fluctuating valuation. But to me, Facebook's value goes up every time it enhances someone's life or when Facebook introduces a great new feature -- like encouraging people to sign up as organ donors. Its value diminishes when the company makes a privacy blunder and it will fall into a negative territory in my book if Facebook staff let the pressures of Wall Street suppress its "hacker mentality" that drives employees to work all night to implement cool new features. But value also requires a stable platform where changes are implemented thoughtfully and incrementally so as not to disrupt and confuse users.
Facebook faces challenges, but its real successes and failures can't be measured by a rise or drop in its stock price. Its real value comes as the company and its users try to figure out how to usher in new ways to communicate and interact.
We've just begun figuring out how to live and thrive in a digital age and all of us -- not just the folks who run companies like Facebook -- have a lot to learn and a lot to contribute.
Sure, it's about learning to protect our privacy in an age where anything we say can be permanent and seen by millions and, yes, it's about learning to be "safe" in an environment we share with people we can't necessarily see and don't necessarily know. But it's also about learning to thrive in a connected world. Forget about Facebook's initial public offering. The IPO I care about is the Incredible Potential Opportunity that awaits us all in this brave new world of social media.
This article first appeared in the Monday, May 28, 2012 San Jose Mercury News and also on Forbes.com.
Disclosure: Larry Magid is co-director of ConnectSafely.org, a non-profit Internet safety organization that receives support from Facebook