I know that the New York Times does not care about whether its op-ed stable knows anything about what they are writing about, but even given that, this is ridiculous:
Ross Douthat: The Facebook Illusion: The Web 2.0 illusion survived long enough to cost credulous investors a small fortune last week, in Facebook’s disaster of an initial public offering.
I will confess to taking a certain amount of dyspeptic pleasure from Facebook’s hard landing, which had Bloomberg Businessweek declaring the I.P.O. “the biggest flop of the decade” after five days of trading. Of all the major hubs of Internet-era excitement, Mark Zuckerberg’s social networking site has always struck me as one of the most noxious, dependent for its success on the darker aspects of online life: the zeal for constant self-fashioning and self-promotion, the pursuit of virtual forms of “community” and “friendship” that bear only a passing resemblance to the genuine article, and the relentless diminution of the private sphere in the quest for advertising dollars.
But even readers who love Facebook, or at least cannot imagine life without it, should see its stock market failure as a sign of the commercial limits of the Internet…
The founders of and early investors in Facebook now have large pieces of an enterprise whose franchise is showing online ads to people based on who their "friends" are, and the market values this franchise at $75 billion.
That's "a sign of the commercial limits of the internet"? Given that a third of Facebook's market is likely to be in the United States, that $75 billion is $300 for every American family. If Facebook manages to capture 3/5 of the value it ultimately adds, that means that the creation of a Facebook has added $500 per family to America's wealth. That's not chopped liver.
So why does Ross Douthat think it is? Well, he reads his Bloomberg Businessweek, he hears of the (justified) annoyance of traders at the inability of the NASDAQ to smoothly manage the IPO, and he hears of the disappointment of those who had bet that the market would value Facebook not as a $75 billion (i.e., $32/share) but as a $90 billion business (i.e., the $38/share IPO price) or as a $100 billion business (i.e., $42/share). For those who had placed big bets that it would be at least a $90 billion business, the fact that it has turned out to be only a $75 billion business is--for them--the biggest IPO flop of the decade.
But to call the creation of a $75 billion company in 8 1/2 years ex nihilo a "stock market failure"?
Ross Douthat has no clue what he is talking about.