By now most people have heard all of the news reports about Facebook’s initial public offering, and how the world now has a new crop of instant millionaires and billionaires.
But the news last week wasn’t all roses for Facebook. For one thing, it became clear as Day 1 of trading ground on that Facebook shares weren’t going to increase in value. Indeed, it took the underwriters stepping in with institutional buying to keep the share price (barely) above the initial offering price of $38 per share.
And there was the news of GM dissing Facebook by announcing that it is dropping its paid advertising program with the social network … evidently due to Facebook’s failure to convince GM marketing execs of the effectiveness of its program.
But there was even more. Consider this news report: Facebook was hit with a $15 billion privacy lawsuit on the very first day of public trading. Filed on behalf of a number of Facebook’s users, the class action suit claims that Facebook invaded personal privacy by tracking users’ web usage.
The lawsuit cites a bevy of case law and regulations as part of the briefing documentation, including the Federal Wiretap Act, the Computer Fraud & Abuse Act, the Stored Communications Act, and various California statutes.
Consider the implications if this suit is at all successful: Now that it is a public company, Facebook is under increased pressure to increase its advertising revenues rapidly – which means collecting yet more user data to help it target paid advertising effectively and thus command premium pricing.
But if the lawsuit is successful, it could prevent Facebook from collecting the very data it uses to serve up advertising based on relevant audience targets.
On the other hand, similar cases brought against Facebook in recent years have been thrown out of court because browser cookies haven’t been viewed as “wiretaps.” Moreover, plaintiffs have had difficulty in proving any “harm” as a result.
Of course, there was some additional very good news this past week for Facebook – at least for CEO Mark Zuckerberg: He got married.
… Which in the end may turn out to deliver far more happiness and fulfillment than all the money in the world ever could do.
Good marriages are like that … so let’s all hope for the very best for Mr. Zuckerberg.