Got a bunch of questions about this, so let's talk Facebook for a moment. First off - the disclaimer: If you take financial advice from some dude that started a music blog on the internet, well, that's your own deal ... so, don't. Find a financial adviser that you trust, spend some time learning about the markets, or just don't invest. You wouldn't put money into any other product/service without doing your due diligence and making sure you knew what the fuck you were spending it on ... don't do that with stocks either.
Ok, now on to Facebook. First, someone over there totally fucked up the IPO. The delays, the increase in available shares, and even the starting price ... something was not right. That said, I do think there is value in the company. I think that Facebook have created a service with over 900 million users. That's insane. That's one website with more users than the entire internet had in 2004. I feel that you can leverage that amount of users, that amount of data, and turn a (nice) profit. Do I feel strongly enough to risk a bunch of my money on such a bet? Nope. But I believe it enough that I did take some of my discretionary income and toss a little bit into the stock once it settled down around the 30 mark. I don't ever expect to get rich off something like this -- obviously -- but I do believe there's value in the company enough to pick up a few shares. Now, I also did this knowing that I didn't need the money I put into it right now ... and I am more than comfortable with the options in front of me:
1) That I lose every last dime. I don't think that will happen over the long haul, however, I don't think I'd ever invest on an individual stock if I didn't accept this possibility.
2) That I can hold the stock for 5 years and not care about any kind of dip/boost in the short term. I didn't buy it to see a 10% jump today. I didn't buy it to worry about a 10% drop tomorrow. I bought it for 3-5 years in the future ... and my belief that the stock will be worth more in a few years.
Now, on to one more thing that I keep reading and I feel like saying something about. Mobile. I keep seeing people say that Facebook is going to go the way of Myspace because of mobile. I don't see it happening that way. Mobile is absolutely the most important thing in the tech sector right now. If you're not thinking about mobile - you're doing it wrong. If it's not a huge priority in your ad/content/product strategy: you're doing it wrong. But Facebook understands the importance of mobile. They haven't completely nailed it yet -- but they have very smart people on it. I've played with other mobile social sites -- and with the exception of Instagram (now owned by Facebook)... none of them struck me as long term competitors. Path? Meh. Pair? Meh. And there will come a time where they can monetize their mobile apps in a similar way as their desktop site (which is not going away) - or use the data they've gotten from their mobile products to better serve ads on their desktop site. Currently we use mobile as a way to supplement our online habits while at work on a computer, or browsing around for fun on a laptop or iPad. It means we spend more time connected. I think that in time, there will be a switch, we'll probably supplement our mobile lives with desktops / laptops/ iPads -- but it's going to be a while before the desktop that we currently sit in front of and browse around goes the way of the dodo.
I think that on a long enough timeline the innovation happening at Facebook and their continued product development ... will lead to good products, a giant website, and the ability to monetize this community. While Google and other web properties are out trying just about everything in the world at the moment ... Facebook has the ability to change how ads are targeted, how search is handled, the entire identity system, sharing/messaging, and how we buy things online. I think that's pretty significant in the online world -- enough so that I think within a few years we're not going to be talking about the closing price of one stock every single day. And hey, if I'm wrong, well - I've been wrong before ... but I've long had a feeling that FB is a generational company ... time will tell.