Thoughts on Facebook IPO - A missed opportunity for the Communication Networks?

I have been reading about the impending Facebook IPO since February 1^st now.

While the hype & hysteria is totally on, with everybody talking about the “vital stats” of the company – breathlessly… There is something that in my view , needs to be reminded to my friends in Advertising.

And it’s not a pleasant reminder. It is a reminder about a “missed opportunity”, a glaring failing of the Industry.

The following is the revenue / net income break up of Facebook, as they revealed in their SEC filings.

It is extremely clear from this that Facebook (just like Google) is nothing but an “Advertising Platform” driven by Advertising.

Google still had a distinct product to offer, in the form of search to begin with.

It was only much later that they came around monetizing search and the entire Google product architecture around Advertising.

In that sense “Apple” can be called as the only “real technology company” making wares not entirely dependent on advertising revenues.

Facebook, in that sense looks like just another online “app” – something that became “extremely macro” with the process of time and whose singular biz model is audience aggregation.

Now the question that should keep most Ad executives awake at night is, what stopped the Advertising Networks – the WPPs, the Omnicoms, the IPGs, the Publicis of the world , to leverage their scale, clout and consumer understanding to use the Internet, pre-empt Facebook and launch such a platform way back when the Internet was still a toddler. (in early 2000s)

To my mind the reason is, that most Ad Networks have a mentality of building campaigns that begin, operate and terminate like a project.

They are simply not designed to construct something that can be a viable “platform” the whole industry can benefit from. That mindset is simply not there.

Just imagine, if today Facebook was a joint property, created by the Ad Industry Networks( in collaboration or singly)….what a superb revenue amplifier it could have been for the industry!!! What a discontinuity it would have been…..