Some say Facebook has grown too fast for its own good, and its tanking stock price only serves to underscore the naysayers. At HBR, Jeff Stibel argues that Facebook is now too big to last.
Back in 2007, I wrote a prediction for my book Wired for Thought that MySpace would soon be overtaken by a little known network called Facebook. Most people, including my Harvard editors, thought I was delusional. MySpace was all the rage and experts were predicting it would overtake Google, Yahoo!, the written word, even communication itself. But just like every social network before it, MySpace flamed out.
Is it Facebook's turn? Facebook went public just three months ago with an initial share price of $38. Less than two months later, it's trading for $18.75. Why is Facebook in a slump? Pundits have suggested myriad reasons including poor investor relations, lack of revenue, and expiring lockups. Last week CNN, along with a host of other sources, argued that perhaps CEO Mark Zuckerberg, the venerable prodigy who built Facebook from the ground up, isn't up to the task of managing a large public company. This week the CFO came under scrutiny from no less than Andrew Ross Sorkin of the New York Times. As tempting as it is to place blame on the business, there may be a simpler explanation as to why it's not possible to keep Facebook's valuation at $105 billion indefinitely.
My perspective is that the human brain isn't capable of utilizing a network like Facebook if it grows too large.