Solid points; I probably should have been more clear and a bit less scathing in my critique. My apologies.

Ultimately, you are right on at least one account: Facebook is probably not worth $40 a share. There are three reasons to purchase a stock: ownership in the company, receiving dividends, and gambling that the stock price will go up. Zuckerburg still has a controlling interest in the company – over 50% of the stock (through himself and intermediaries), and Facebook to this point is not paying dividends. So the only reason to long Facebook is to hope the price will go up. It’s a gamble, and one that may not work to the investors’ favor.

Moreover, I doubt, too, that Facebook will continue the susbstantial growth necessary to maintain a high stock price.

Meanwhile, you are right about Gainesville having a service-oriented economy. Service economies are fine where you have a highly-educated and/or highly-skilled population. Banking, creative services (including radio), technology services (like Facebook), medical services, law enforcement, and many others are all essential parts of the American economy that I do not put down. But many other service jobs, in fields like retail and food services, seldom pay enough to provide a decent standard of living, and certainly not opportunities to raise one’s standard of living. I bemoan the decline (not end) of American manufacturing not because of romantic or nostalgic notions of past American glory, but because I think manufacturing affords less educated workers the opportunity to make a decent living. Imagine if the one factory in China that makes iPads and iPhones were to relocate to, say, Detroit. Detroit would, in an instant, experience a reversal of fortunes. I know that’s just wishful thinking, but I think it’s worth asking why so many people seem okay with with low-skilled manufacturing jobs going overseas.

As for Facebook, time will tell if I am right or wrong. I readily admit that I have no special business or computer training, and I certainly don’t claim to know what wonderous things the future holds. But let’s put it this way: if I had money, I wouldn’t be holding onto Facebook stock.

I’ll follow up on this story in the years ahead, and we’ll see where it goes.

I don’t believe Facebook’s market cap of 100 billion is anywhere near deserved with Ford currently sitting at 40 billion and Coca Cola at 175 billion. Even the big wigs like Google (200 billion), ExxonMobile (385 billion), and Apple (510 billion) seem leaps and bounds more established to warrant such a valuation.

Just because someone or something doesn’t “make” an tangible object, doesn’t that mean that company is worthless or any less valuable than a company that does. Look at Gainesville. Very few people in the city work for a company or industry that manufactures products. In fact, I would go as far as to say that there are three types of jobs one can get in this city: a job with the University, a job with one of the many hospitals, or a job working for company that supplies the needs of the people working for the University or the hospitals. All three categories are service jobs.

At the Radio station, do you actually “make” anything? No, you provide a service to people. Certainly, creativity is involved; I’m not trying to bash your job here. But nothing is being tangibly “made” in the process.

Same with my job. I (and the people I work for) don’t actually make anything. We go out and provide computing assistance and service to those within the college.

If you look at the ten highest revenue-producing companies in the world, eight of them are energy companies. They don’t actually “make” anything. They drill it out of the ground. Sure, there is some refinement involved, but I’d be willing to bet most of their profit margin comes from being able to drill large amounts out of the ground, taking advantage of economies of scale.

Additionally, value is not what someone “feels.” You may not like that Facebook may be “worth” more than Ford or McDonalds, but that very well may be the case. The services someone receives from Facebook exceed anything they receive from either of those two companies. For one, while everyone uses Facebook, not everyone buys a Toyota, so right there Facebook has the advantage. And while almost everyone has eaten at McDonalds (Billions and Billions Served), is one or two Big Macs a week really worth more than the hours the users spend on Facebook? I think not. Plus, if we can put a price one one’s time, Facebook does in seconds what used to take hours, freeing people up to pursue other activities that they enjoy. Opportunity costs are practically zero.

You compare Friendster and MySpace to Facebook, and while all three are social networking sites, there are marked differences between each. The key is that while Facebook was able to evolve with its users, MySpace and Friendster, thanks in part to decisions made by management and others, did not. Zuckerberg may be totalitarian when it comes to information gathering, but the man got where he is thanks to his ability to anticipate and adjust. Additionally, all three sites emerged within years of each other (Friendster in 2002, MySpace in 2003, and Facebook in 2004), but only Facebook has stood the test of time.

Is Zuckerberg infallible? Certainly not. But look at Steve Jobs. Just when the world thought he was done, he came back stronger and better than ever.

You may bemoan the end of the age of manufacturing, when someone could work fifty years for a company, retire, and have a nice pension, but that is not the way of the world anymore. Very few people have “careers” to speak of; just a series of jobs. America is, for better or for worse, a service economy now, and Facebook is on the cutting edge.