With the much heralded Facebook IPO almost upon us, a backlash is growing among those weary of the endless hype. Some are skeptical of the company’s lofty valuation; others are just sick of all the attention being given to a site they see as little more than a frivolous time sink. “Can Facebook just have their IPO … so we can all stop talking about it?” one exasperated Twitter user plaintively asked, speaking for many.
Over at Zacks Investment Research, meanwhile, Tracey Ryniec announced that she’s officially “sick of Facebook.” You can almost hear the exasperation as she writes:
Facebook, Facebook, Facebook.
Are you as sick of hearing about the Facebook IPO as me? …
Yes, it’s the biggest Internet IPO ever. …
But do I really need to see another article about how the Ferrari dealers in Silicon Valley have brought in extra inventory in anticipation of all the new millionaires? Or how Menlo Park and Palo Alto housing prices, which were already sky-high, are soaring even higher from all the new money?
I can’t wait for this week to be over so we can talk about some other companies.
Facebook has had its critics from the start, from those wary of its business model to those troubled by its privacy policies to those annoyed by endless Farmville requests from so-called friends. But with the IPO imminent, the critics are coming out of the woodwork to offer their objections to the hype machine.
CNNMoney’s Paul R. La Monica offers “Five Reasons to Not ‘Like’ Facebook’s IPO,” Dave Smith of the International Business Times offers five reasons of his own, and over at the Huffington Post, John F. Ince outdoes them both with “13 Unlucky Reasons Why Facebook Is Rapidly Approaching Peak Hype.”
“It’s a cult stock,” the chief investment officer of Granite Investment Advisors told the Wall Street Journal.
Aside from general worries about valuation — which pop up with virtually every IPO — critics are especially worried that Facebook may not be able to make effective use of ads, which most users seem to ignore. (As professional funny guy Andy Borowitz put it in a recent tweet, “Facebook ads are a great way to reach consumers who are drunk and click on ads by mistake.”) And as more users come to rely on mobile devices rather than computers to access Facebook, it becomes harder, not easier, for Facebook to use ads effectively without clogging up the tiny screens and annoying users.
With impeccable timing, General Motors announced earlier this week that it would be pulling its ads from Facebook, convinced they weren’t effectively reaching consumers.
Others have more specific, some might say petty, critiques: Michael Pachter, an analyst for Wedbush Securities, groused on Bloomberg TV about Facebook CEO Mark Zuckerberg’s fondness for casual attire:
Mark and his signature hoodie: he’s actually showing investors he doesn’t care that much; he’s going to be him … I think that’s a mark of immaturity. I think that he has to realize he’s bringing investors in as a new constituency right now, and I think he’s got to show them the respect that they deserve because he’s asking them for their money.
So far investors themselves haven’t seemed to mind; Facebook has raised the price of its offering and is adding more shares to the pot to accommodate more of those who want to get in on the party. Perhaps investors remember another storied tech CEO with a fondness for less-than-formal wear who nevertheless managed to make them a lot of money: the late Steve Jobs of Apple. (Pachter himself remembers Jobs well and, despite his distaste for hoodies, has put a “buy” rating on Facebook.)
Still, a lot of this criticism seems to have sunk in with the American public — or at least that impressively large portion of the public that uses Facebook.
A new poll from the Associated Press and CNBC found that 59% of Facebook users polled said they didn’t trust Facebook to keep their information private. As for wonder-boy CEO Zuckerberg, only 18% said they were very or extremely confident in his ability to run the company. Perhaps more troubling for Facebook’s future, 57% of Facebook users reported that they never click on Facebook ads, and 54% said they wouldn’t feel safe buying things through Facebook. Half of those polled think the company is overvalued.
With all the criticism floating around, it’s perhaps not altogether surprising that there’s now a backlash of sorts to the backlash itself. In New York magazine, Andre Tartar accuses the antihypesters of having an agenda of their own. While the investment bankers pushing the IPO have a vested interest in boosting Facebook’s price, Tartar notes, “lots of rich, rich investors want to douse the hype and lower the price.”
So far, despite the backlash, the hypesters seem to be winning.