MarketInsight: Is Facebook a fad?
In September of 1964, two irresistible forces hit the First Coast like, well … like a hurricane.
The first was a hurricane. On Sept. 10, Hurricane Dora made landfall at Vilano Beach devastating the coast from St. Augustine to Jacksonville and beyond with its 125-mile hour winds. One day later, a second force of nature landed at Imeson Airport at 5 p.m. It was the Beatles coming to play the Gator Bowl that very night.
In an editorial published the day the Fab Four landed, the daily newspaper referred to “the shaggy-haired singers from Liverpool“ as “a passing fad.” That editorial pronouncement was, as we all now know, profoundly wrong. The Beatles continued to exert a gargantuan influence on world culture for decades after the damage caused by Dora was long forgotten. In fairness to the author, it is often hard to discern the difference between a fad and a long-term trend.
Several weeks ago, I was the keynote speaker at an event at the Cultural Center in Ponte Vedra. One of the attendees asked me if Facebook was a fad.
My instant reaction was to point out that it is hard to argue with 1.65 billion monthly users, but it got me thinking. I did some research. That is what I do.
One fact struck me. Users upload 300 million pictures to Facebook every day. That is 110 billion per year, more pictures than there are stars in the Milky Way. I wanted another comparison, so I asked Google how many books had been written in the history of humankind. One of the 543 million returned results stated that the total number of books written was 129 million. Now, I do not know if that number is correct or not and it would be impossible for me to check all 543 million results in order to find out. Frankly, it might be easier and certainly more edifying to read 129 million books.
I cannot read 129 million books or 543 million web posts, but Watson can. Watson is the artificial intelligence being designed by IBM. It occurs to me that in the future finding anything on the internet will require an artificial intelligence like Watson.
As humans, we lack the ability to sort through the morass of information, much of it misleading or even false, and find what we need. So, my tip to you in this column is to buy IBM. The stock is relatively cheap as of the writing of this column at $147 and the stock pays a current dividend yield of 3.80 percent.
Obviously, I still have not answered the question, “Is Facebook a fad?” My guess would be yes. Cultural phenomena like pet rocks, Rubik’s cubes, Facebook and hula hoops tend to come out of nowhere, captivating our collective imaginations. Everyone has to have one. But then, once everyone does, they fade away just as quickly.
My guess is that within five to 10 years you will begin to see articles entitled “Whatever happened to Facebook?” I might even end up writing one myself.
Scott A. Grant is President of Standfast Asset Management in Ponte Vedra Beach. He welcomes your comments or questions at firstname.lastname@example.org.