Facebook’s IPO Flameout Coming May 17th

Pride goeth before a fall, something we’re pretty sure Facebook will learn the hard way when its IPO debuts, because they want to raise more than twice what Google put together for their IPO. One teeny, tiny, microscopic problem: Facebook isn’t worth nearly as much as Google.

Don’t get us wrong: Facebook is a valuable company. They’ve got at least $2.5 billion in cash, just dropped a billion to acquire Instagram and have no debt. So it’s worth billions. But $50 to $100 billion? Hell no.

As we’ve noted before, Facebook is built entirely around marketing; it collects information about you, ranging from what you listen to on Spotify to who you interact with to what websites you visit, and sells it to private companies.

The big problem is that Google can do it better, and it doesn’t rely on what amounts to an online roach trap to do it, either. Google has access to your information that Facebook can only dream about.

And, frankly, Facebook’s advertising model on its own site is severely flawed compared to Google’s. For example, it became convinced, for a week, that I spoke Spanish. Currently, it thinks I’m in the market for a new cell phone (I’m not) and that I want to use my credit card at the nearest Redbox (I don’t). The site can only pitch you ads based on the information you feed it.

Granted, Google has much fresher and more precise data, but that’s the problem: why should investors pay for what’s ultimately the lesser advertising source? We suspect this will be reflected in Facebook’s IPO; be prepared for disappointment, Zucks.

(Image courtesy Todd Barnard on Flickr)