Facebook IPO–Love It, But Leave It

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With the Facebook IPO scheduled for this week, valuing the company at as much as $96 billion, many investors according to Bloomberg BusinessWeek (11 May 2012) see this as overvalued.

Facebook will be the largest Internet IPO in history, and would be about 4 times as much as Google was valued at its IPO at $23 billion in 2003.

Further, Facebook could be valued at offering at 99 times earnings.

This is more than the price earnings ratio of 99% of companies in the S&P Index, yet even with some estimating sales of $6.1 billion this year, Facebook would only rank about 400 in the S&P 500.

True Facebook has amassed an incredible 900 million users, but the company’s revenue growth has slowed for the 3rd year in a row.

Another article in BusinessWeek (10 May 2012) describes a new social networking contender called Diaspora.

Unlike Google+ which is predominantly a Facebook copycat, Diaspora is bringing something new and major to the table–they are addressing the privacy issues that Facebook has not.

Diaspora is a distributed (or federated) social network, unlike Facebook which is centralized–in other words, Diaspora allows you to host your own data wherever you want (even in the cloud).

Each of these independently owned Diaspora instances or “pods” (dispersed like in the Diaspora) make up a true social “network”–interconnected and interoperable computing devices.

With Diaspora, you own your own data and can maintain its privacy (share, delete, and do what you want with your information), unlike with Facebook where you essentially give up rights to your data and it can and is used by Facebook for commercial use–for them to make money off of your personal/private information.

When it comes to personal property, we have a strong sense of ownership in our society and are keen on protecting these ownership rights, but somehow with our personal information and privacy, when it comes to social networking, we have sold ourselves out for a mere user account.

As loss of personally identifiable information (PII), intellectual property, identity theft, and other serious computer crimes continues to grow and cost us our money, time, and even our very selves in some respects, alternatives to the Facebook model, like Diaspora, will become more and more appealing.

So with social networks like Facebook–it is a case of love it, but leave it!

Love social networking–especially when privacy is built in–and others don’t have rights to what you post.

But leave it–when they are asking for your investment dollar (i.e. IPO) that could be better spent on a product with a business model that is actually sustainable over the long term.

(Source Photo: here with attribution to Allan Cleaver)

 

>A Turning Point for the Government Cloud

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Los Angeles is moving to the cloud, according to Public CIO Magazine March 2010, and “they are the first government of its scale to chose Gmail for the enterprise.”

“It turned out that Washington D.C., was using Gmail for disaster recovery and giving employees the option to use it as their primary e-mail.” But LA is implementing Gmail for more than 30,000 city employees (including police and fire departments) as well as planning to move to Google Apps productivity suite for everything from “calendar, word processing, document collaboration, Web site support, video and chat capabilities, data archiving, disaster recovery and virus protection. “

CTO Randi Levin is leading the charge on the move to cloud computing, and is taking on concerns about cost, data rights, and security.

  • On Cost: “The city estimated $5.5 million in hard savings form the Google adoption, and an additional $20 million savings in soft costs due to factors like better productivity.”
  • On Data Rights: Nondisclosure agreement with Google includes that the data belong to the city “in perpetuity,” so “if the city wants to switch to another vendor after the contract ends, the city will be able to recall its archived data.”
  • On Security: “Google is building a segregated ‘government cloud,” which will be located on the continental U.S. and the exact location will remain unknown to those outside Google. The data will be “sharded”—“shredded into multiple pieces and stored on different servers. Finally, Google will be responsible for “unlimited” damages if there’s a breach of their servers.

LA conducted an request for proposal for software-as-a-service (SaaS) or a hosted solution and received responses for 10 vendors including Google, Microsoft, and Yahoo. Google was selected by an Intradepartmental group of IT managers and a five year contract issued for $17 million.

Currently (since January), LA is conducting a Gmail pilot with about 10% of its city employees, and implementation for the city is slated for mid-June.

Additionally, LA is looking into the possibility of either outsourcing or putting under public-private partnership the city’s servers.

And the interest in government cloud isn’t limited to LA; it is catching on with Google Apps pilots or implementations in places like Orlando, Florida and within 12 federal agencies.

Everyone is afraid to be the first in with a major cloud computing implementation, but LA is moving out and setting the standard that we will all soon be following. It’s not about Google per se, but about realizing the efficiencies and productivity enhancement that cloud computing provides.