Just one little prick can burst the biggest balloon

Eight year's after that interview with the Harvard Crimson, the university's daily student newspaper, Mr. Zuckerberg is now the 23rd richest man on the planet after Facebook went to IPO on Friday last. Despite the protestations of the earlier incarnation of the man who made it OK for billions of people to become narcissists in public as a well as in private, money has been made - and then some.

Ironically, the maxim that "time makes liars of us all" was coined in 1977 by George Vaillant the director of the Harvard Londtitudinal Study of Aging. Like the rest of us Mark Zuckeberg too is aging. He is now a venerable 28 and, as we say in the UK, is absolutely "minted" after deciding to make money from facebook after all.

However, although the founder and a few of his mates and mentors have made out like bandits, and despite the US$104 billion IPO of part of Facebook being touted and lauded as the mega-floatation of the century (so far) the event itself was surprisingly lacklustre.

Sure the shares shot up from $38 a pop to $42.05 within a couple of hours of the IPO, (which was itself delayed for a considerable while by the electronic gremlins of Wall Street) but after institutional investors got into the pumped shares, took their profits and then dumped them the stock price fell back very close indeed ($38.23) to to original inflated offering price and banks poured money in to the company to prop up the stocks to avoid the embarrassment of Facebook shares closing on their first day as publicly traded stock at less then the opening price.

As trading closed on Friday last, Morgan Stanley (Facebook's main financial advisor) had paid over the odds to buy shares to keep the price above $38 and was left holding 162 million Facebook shares worth a notional $6.16 billion. When the Nasdaq opens later this morning we'll see what they'll be worth then.

JP Morgan and Goldman Sachs also dipped in to their coffers to buy stock and keep the share price artificially high, spending $3.2 billion and $2.4 billion respectively.

These banks and others will have neither the resources nor inclination to do that for long and analysts who, a few short weeks ago, cheered to the rafters the notion of the money to be made from Facebook's floatation are now classifying the stock as a "sell".

For example, Brian Wieser, an analyst at Pivotal Research Group in New York, says Facebook’s shares were priced for  a “perfection” that may not be attained and certainly could never be maintained, He is advising his clients to give Facebook shares a wide berth.

Because technical problems prevented some prospective purchasers from placing their orders, the Nasdaq has set up an enquiry and appeals process. With the benefit of hindsight it is likely that some of the punters who would have lost money had their purchase orders actually gone through will be delighted that the system failed.

So now, as the ballyhoo fades, Facebook is left to the quotidian grind of monetising its site and services. Top of the agenda will be a focus on mobile advertising as a major revenue source. It will be a high-wire act worth watching as Facebook struggles to attract and retain ever-increasing numbers of mobile users (who, as a species, are very resistant to mobile advertising), at the same as time as ramping-up the number of ads they will have to deliver to consumers to meet the revenue forecasts the company will have to make and meet if it is to keep the Facebook bubble inflated.

Only last week the company filed a statement with the US  Securities and Exchange Commission (SEC) wherein it disclosed that the urgent actions necessary to wean users away from advertising supported desktop and laptop services and attract them to use Facebook on mobile devices will "negatively impact"  the Facebook business model and long-term revenue earning capabilities.

The filing reads, "We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected."

And Zuckerberg should be worried. A new survey from the digital marketing agency Greenlight shows that 44 per cent of percent of respondents said they never click on ads on Facebook while a mere 3 per cent said they regularly do so. What's more 32 per cent of respondents say they "strongly distrust" Facebook with their personal idata.

Meanwhile, as Bono's venture capital company makes him more money overnight from the Facebook float has U2 has made in its entire lengthy existence, a $15 billion class-action lawsuit has been launched claiming that Facebook has been, and still is, in breach of privacy legislation by tracking users against their wishes - even after they have logged out of and exited their Facebook accounts.

Do no evil  Make a buck or two.