Lots of users isn’t cool. You know what’s cool? Profits.
Facebook announced earnings last night, and as of this morning its stock is crashing faster than a Kristen Stewart romance.
It’s a bad day for Facebook shareholders, but for those of us who’ve been warning friends and relatives about its dangers it’s a day of vindication. The social media bubble has popped, and I hope the crash gets people to start asking themselves questions like who the Facebook customer is (advertisers), what their product is (you, if you’re on Facebook), and what will happen with your content when the heat is really on Facebook to generate profits (baby pictures sold to child molesters?).
Here’s a thing my father taught me that I wish I had listened to more carefully: when the heat is on, people do strange things. When the VC community starts to realize the profits aren’t materializing in their social media plays, they’ll get a lot more aggressive fast about what they do with your content.
Dave Whiner is leading a great discussion about this with some VCs.