Facebook, riding the coat tails of Zynga, the online game developer, is going public.
Many Americans scratched their heads during the Clinton administration when Sun and Oracle had lobbied Washington to sue Microsoft and they are doing the same once again because Obama wants to sue Apple.
Apple, the seller of the innovative, globally popular and high quality iMac, iPhone and iPad line of products and related software is under scrutiny for antitrust violations for allegedly restricting other software makers’ access to its platform relative to Google’s Android.
Selling faces for ads to let in more free faces online is a business model that is not so viable for a company with $3 billion in revenue but valued by Wall Street at $100 billion, including Zynga, in 2011.
This market capitalization of Facebook, linked brazenly to bi-partisan politicking, could rise in 4 years to $1 trillion for nothing more than more ways than one for sending pictures, audio, video and text around, which Twitter does better and more parsimoniously, within 140 characters, from America to Egypt, with funding from Prince Al-waleed bin Talal of the Saudi Arabia.
American information technology companies which have defined the landscape of technology are still not worth what Facebook is expected to be worth despite a strong global revenue base. IBM and Microsoft still make software and provide Information Technology services for a living. Google has moved on from banking on online ads to licensing the Android operating system for mobile phone users on an open platform. Now it is innovating the semantic web with What Do You Love? at http://www.wdyl.com.
The Federal Reserve’s monetary policy making Federal Open Market Committee (FOMC) is habituated to using the refrain “how do we know if we are in a bubble?”
The FOMC did not know when the markets were in the tech bubble in the late ’90s. It lowered rates after the crash. It did not know in the mid-2010’s when it raised rates in the midst of the housing bubble, and now it does not know once again when the expected share price by 2016 is $400 over a revenue projection of $5 billion for a Facebook market capitalization of $1 trillion.
IBM, Microsoft, Apple, and Google can help avoid the mistake of another episode of the ’90s-type technology bubble and the associated corporate governance corruption in the board rooms by firmly restructuring the information technology (IT) industry in the United States.
In an IT marketplace habituated to easy money with little in commensurate revenues to show, Apple, with a solid worldwide and expanding revenue base and a market capitalization of $600 billion, can acquire Facebook together with Zynga, Instagram, Yahoo, Flicker and blogging tools such as WordPress or Tumblr to apply its hybrid-model model of revenue generation that uses open standards. Further, why contemplate antitrust actions against Apple when Google, it is reported, is investing in Motorola to compete with Apple in the devices market?
Ben Bernanke must resign from his perch at the helm of the Federal Reserve for not knowing what he is doing.