Facebook is more than the year’s hottest stock story — it’s a cultural phenomenon

By Peter Delevett, San Jose Mercury News
Posted May 14, 2012, at 9:01 p.m.

SAN JOSE, Calif. — When Facebook goes public — as it’s expected to do this week in what’s almost certain to be the biggest stock debut for an Internet company — it will be more than a milestone financial event. It will also be a reflection of how tightly a company launched eight years ago in a college dorm room has become woven into the fabric of society.

In its ability to shape the way hundreds of millions of people around the world communicate, debate, make buying decisions, entertain and inform themselves, Facebook may well be the biggest technological advance since the advent of broadcast television.

David Kirkpatrick, author of the best-seller “The Facebook Effect,” spent years covering technology titans like IBM and Microsoft but said, “It wasn’t until I saw Facebook that I saw a company that was going to change the way life is lived.”

He likens Facebook co-founder and Chief Executive Mark Zuckerberg’s vision to transform society, and the single-minded pursuit of his vision, to that of historic figures like Mohandas Gandhi, Vladimir Lenin and Martin Luther King Jr.

Facebook, close observers of the company argue, is changing how business, politics and society itself operate.

“Word of mouth, 150 years ago, spread very slowly,” Twitter co-founder Jack Dorsey said. “Now, anyone in Iraq can post audio of what’s happening there, and anybody in the world can listen to it.”

Facebook was by no means the first social network, nor the first to grow to massive size. But it has taken off like few companies of any kind due both to Zuckerberg’s laserlike focus on the product and to a number of technological shifts, including the increased speed of broadband Internet connections and the lowered cost of storing data online.

And Facebook’s success has blazed trails for other social media companies to follow.

“In the last five years, social networking has been on as dramatic a growth trajectory as we’ve ever seen in Silicon Valley — faster than microprocessors, the personal computer, probably the Internet itself,” said Jive Software CEO Tony Zingale. His Palo Alto company sells Facebook-style networks that let other companies communicate with their employees and customers.

Zingale was a newbie at Intel when IBM introduced its first personal computer in 1981, beginning the rapid shift away from mainframes. He sees the advent of social media as equally transformative of the way people communicate and how business gets done.

In the era of Facebook, for instance, companies have had to radically adjust their strategies to reach customers — or face extinction.

Travis Katz, an early employee at MySpace, the pioneering social network that ultimately was surpassed by Facebook, said the social movement is “reshaping the Web and completely disrupting markets.” Just a few years ago, he notes, companies like Yahoo and AOL dominated the consumer Internet,

but they tried to broadcast information to a mass audience, much like television or radio.

Facebook, Katz said, is fundamentally different because it has trained people “to expect the Web to be personalized to them.”

That has also created opportunities for new companies to piggyback on Facebook’s success. BranchOut, for instance, lets users troll their Facebook network for jobs. Spotify lets people share and discover new music with their Facebook friends. And Zynga has shaken up the video game industry with wildly popular social games like “FarmVille.” Katz himself now runs a startup, Gogobot, that lets people find travel recommendations via their extended social networks.

By allowing other companies to build on Facebook’s platform, Zuckerberg has made a canny decision that will likely ensure growth even as its own user base maxes out, Katz and Kirkpatrick both said.

Facebook is also reshaping the political system, taking power out of the sole purview of consultants and traditional media and putting it more directly in the hands of voters.

Rory O’Connor, an Emmy-winning former producer for CBS News and PBS, has penned a new book, “Friends, Followers and the Future,” that looks at how social media — and Facebook in particular — are changing political campaigns and the media’s role in them.

Social networks were a huge factor in Barack Obama’s 2008 presidential campaign, letting the novice garner supporters and raise money despite facing politicians with national profiles. Facebook co-founder Chris Hughes, in fact, helped build Obama’s social networking site.

O’Connor and others say this year’s election will be even more dominated by social media — and whoever uses it most effectively will win.

Both Obama’s and rival Mitt Romney’s campaigns have brought in experts from the advertising industries to sift through the massive amounts of data Facebook compiles on its users, O’Connor said. Some observers liken the trove to a super-sophisticated polling system of the electorate.

“You and I might see a different Romney video based on our ZIP code and what we say on Facebook about whether we’re liberal or conservative,” O’Connor said. “That is a major, major departure from what’s ever been done in political campaigning.”

The same political and social disruptions have played out across the globe. A Facebook page maintained by Google marketing executive Wael Ghonim famously became the flash point for last year’s protests that toppled Egypt’s longtime leader, Hosni Mubarak.

On a more personal level, San Francisco blogger Nathan Bransford found out the hard way that social media can shine a harsh light on life’s most uncomfortable moments. Last month, he published a widely read post on how, in the wake of his divorce last year, that awkward experience of running into his ex happened again and again — but on social networks, not in person.

Bransford, who by day manages CNET’s social media branding, said he couldn’t afford to shut down his social accounts, as his ex-wife did. “I subsequently felt like I had to come out and say I was divorced, which wasn’t something that felt totally natural,” he said in an interview.

“The only way to approach life in the Internet era is with integrity, because the Internet by its very nature enforces honesty and transparency,” he added. “The Internet is no longer self-contained and compartmentalized.”

That kind of openness may be exactly what Zuckerberg had in mind when he envisioned a more connected world. But one of his earliest employees admits that in the craze of building and maintaining the site, there wasn’t always time for philosophizing.

“I thought it was just going to be this fun thing where people were building Web pages,” said Scott Marlette, who dropped out of graduate school at Stanford University in 2005 to become Facebook’s 18th employee. But “there were a lot of times when it was almost physically impossible to keep up with the site’s growth. At some points, there were truckloads of servers showing up to accommodate new users.”

Marlette now runs a Santa Monica startup, GoodRx, that helps people price-shop online for prescription drugs. It’s backed by some of the early Facebook investors and, in many ways, shares its vision of making the world more transparent for the good of ordinary people.

Like others, Marlette notes that Google — which currently holds the record for biggest Internet IPO — was perhaps the last company before Facebook to make information more available on such a grand scale.

“I really respect Google — the ability to search for information on anything and find it instantly is very powerful,” Marlette said. “But Facebook’s mission is so grand compared to the scale of what most companies are trying to do. I guess I didn’t think about the fact that it would pervade everybody’s lives in the way it has.”

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©2012 the San Jose Mercury News (San Jose, Calif.)

http://bangordailynews.com/2012/05/14/news/nation/facebook-is-more-than-the-years-hottest-stock-story-its-a-cultural-phenomenon/ printed on July 26, 2014