Facebook: Act III

08/06/2012

The recent weak performance of Facebook's long-awaited IPO has many speculating about the future of the social networking giant. Within two weeks of going public, Facebook's shares dropped from $38 a share and a valuation of $104 billion, to $29 a share and a valuation of $63 billion.
 
Rather than signal a bursting of the social media bubble, the IPO simply opened the last of three "acts" experienced by many start-ups, argues IESE Prof. Javier Zamora of the Department of Information Systems. During the first act, the company attracts users; in the second act, it goes public to attract capital; and during the third act, the company finally carves out the right business model, which for Facebook will mean going beyond diplay advertising.

Face IT - IESE Technology Blog