Regular readers of this blog will know that I consider Facebook to be dead man walking. They will become like MySpace. Why? Because they are not making money the way they should. They are trying to monetize themselves and change the way they operate by selling private data. In the words of Jimmy Fallon~ Facebook is selling 330 million shares. Great now you can own a piece of the website that completely owns you.
Not only will they alienate their user base, but they have a couple of problems. First, many of their users are fake. The private data is not real. Facebook themselves will publicly admit that "at least 5%" of their users are fake. Using their figures, that means that 50 million Facebook accounts are fake. I'll bet that the real number is much higher than they are willing to admit.
Secondly, for a billion users, they are only making $3 or $4 dollars per user. That is not enough to sustain the business model long term. Secondly, it tells you that their paradigm is not suited to business. Several Fortune 500 companies have abandoned their Facebook storefronts.
The biggest reason that you shouldn't invest in Facebook, is that the smartest stock player in the world, Warren Buffett is giving Facebook stock a pass. His chief investment officer had strong words about not investing in Facebook. You can read the article by following this link:
So, that is why I am not investing in Facebook, and it further reinforces my belief that Facebook, like Microsoft, has had its day. The only way to go is down. Microsoft has already turned that corner.