In the Wall Street Journal this morning, Andy Kessler explains why Facebook might just be worth the staggering sums now being bandied about. The reason has less to do with the vast, complex network of software and servers the company has assembled than you might suppose. What it really comes down to, Andy argues, is one little button:
As bizarre as this sounds, one of the most valuable innovations in technology over the last several decades is Facebook's "Like" button. That's what has propelled the company to a galaxy-orbit valuation for its forthcoming initial public offering, filed Wednesday.
This is not only because the word "like" is, like, the identifying word of an entire generation. It's because computing has evolved beyond just taking directions from humans—and instead is cozying up to us and sniffing out our emotions and intent....
Facebook doesn't sell phones or tablets, or ship physical products or even do searches. Instead, it has a vibrant, pulsating community of 845 million people willing to share their personal lives with others. Facebook is a giant emotional locker.
That's where the Like button comes in. The adage about advertising is that only half of ads are effective, but no one knows which half. So companies will drop $3.5 million to NBC for a 30-second Super Bowl ad. Or run Keystone Light ads on Comedy Central. They may work, but advertising—ask P&G—is an industry ripe for productive innovation. With the Like button, Facebook is like Bob Eubanks on "The Newlywed Game," who promised contestants "a prize chosen especially for you." Advertising's nirvana is an ad chosen especially for you. Of all the players, Facebook is the closest to delivering.
As Pat Sajak said in his post the other day, welcome to the future.
Oh, and if you enjoyed this post--well, you know what to do.