Dot-Bomb 2.0? A look around Facebook Groupon and Apple
Well, the news that Facebook’s stock fell to below 19 dollars hit Silicon Valley hard last week. The milestone marked half the value of its IPO offering price. And as of this moment there has been an slight uptick in value from that low, but hovers around that number for the time being. The dip is being linked to a number of things, but most significantly telling was the passing on Thursday of a ‘lock-up’ period, meaning insiders and other early investors got their first opportunity to get out. The company has faced a number of issues surrounding its IPO and valuation since before the company went public. 
The belief is that many investors are basing their concerns with Facebook on the prospects for revenue. This sets up a massive focus on the company’s next earnings date scheduled for October 25. How the company performs in that report is poised to be a seminal moment for the company and indeed for a number of social networking companies. Many have expressed concern for the viability of social networking in terms of the ability to generate revenue.
A quick peek over at Groupon shows an 80% drop in value from one year ago. Yelp has bucked this trend by maintaining an increase from its IPO and there are other successful examples, such as LinkedIn, whose price remains more than double their initial price a year ago. The takeaway is there are successes out there, and while the notion of public investment in a company can in some ways be based on pop-financials, it appears that Facebook is a dog that is getting kicked while it’s down.
There is reason to be optimistic about Facebook however. While improved revenue statistics would go a long way to restoring the financial prospects for the company, the fact of the matter is that Facebook is growing. There are more and more opportunities for integration as much of the user base is going mobile. In the last year we’ve seen business presence shift dramatically from other structures over to Facebook related marketing. Although famously there is an element of fake accounts that came to light recently, the user base also continues to grow. Analyst estimates on the eventual value of the company range from somewhere around 30 billion on the lower side to all the way up to 200 billion on the high side. What is obvious is that the company’s mobile and tablet strategies and the happenings in the consumer market that go along with it will play a significant role in expanding revenue for the social networking giant.
In the meantime, technology giant Apple is enjoying the highest valuation of any United States company in history, with a market cap of 620.70 Billion dollars. Analysts have projected that price to go up even further. Investors seem to be reflecting on the upcoming projected product lines from the company. Starting with the iPhone 5, the anticipation for the company’s products is growing by the day. The iPad Mini and the new Apple TV product are both hotly anticipated products.
So the stories that are out there about a second technology bubble explosion, they are misguided, though not without merit. There are many reasons to be wary, but what most people are not aware of are the new possibilities that mobility and analytics bring about. Here we sit at the dawn of a new Big Data era, a new mobility and computing device wave, a complete redefinition of what computers are and how we interact with them. It is redefining social constructs as well and that is where companies like Facebook, Groupon, LinkedIn and even Apple are right at the heart of. They understand it and the fact that what is going on is actually a revolution in technology and media and there is no turning back.
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