Shenanigans Facebook is power

Author: Alex Garlick

Every year in May at commencement, graduates' heads fill with enthusiasm, excitement, fear and a vicious hangover as they prepare to enter "the real world." Invariably, a speaker delivers a message to the graduates regarding the possible impact of this generation, and how it can make a difference in the world at some point. That time for our generation is now, and I will guarantee you will be a little surprised at the source of this major social, and economic, impact - Facebook.

You may have thought Facebook's impact was limited to job offers being rescinded when potential employers found out about some "naked runs" from freshman year, but in fact, Facebook is making some serious waves in the business world.

Last week Microsoft bought 1.6 percent of Facebook Inc. for $240 million. For those of you not preparing for a Goldman Sachs interview right now, that puts the overall valuation of Facebook at $15 billion. Mark Zuckerberg, the Harvard dropout who started the social network in his dorm room a few years back, still holds 20 percent of the stock. Running those figures through my abacus I figure Zuckerberg is in line for a $3 billion payout in a couple years when Facebook goes public.

Why is this important to us? It shows the power our generation is capable of wielding in the marketplace of tomorrow. Microsoft is valuing Facebook's estimated 50 million users at $300 a head. Bill Gates and the boys in Seattle see dollar signs from the hours you spend looking at your Proctor Crush in a bikini on spring break, or unsuccessfully searching for "Nick Janson" just one more time.

This enormous price tag has inspired more head scratching among industry insiders than the unveiling of "Solid State Change" at the new Hillcrest building this year. Pundits claim that Microsoft is overpaying for its share of the advertising potential of the site. They also claim that Microsoft is just desperate to score some points in its ongoing battle with Google.

They are wrong. Gates is helping to bring Zuckerberg into the "Harvard dropout turned self made billionaire" club because he realizes how important it is to establish brand loyalty with "alpha consumers." Do you remember back in our elementary school days playing "Oregon Trail" on our Macintoshes in the classroom? Well, that was the strategy of Steve Jobs at Apple. He thought that if Apple could get their computers in the hands of the kids while they were young, Apple would eventually win the personal computing cold war. Meanwhile, Gates targeted Windows at working professionals. When it came time to get a computer for home, Mom and Dad were more comfortable buying a computer like the one they had at work than what the kids were playing with at school. This is why Gates is the richest man in the world.

The same thing is happening now. Facebook users are cementing their brand loyalty, and they are the "Alpha consumers" that drive our economy. The pundits cannot ignore our generation - our impact is being felt. So congratulations to Mark Zuckerberg, the leader of this movement. By my unofficial tally, he is the first self-made billionaire of our generation. Congratulations also go out to you, Middlebury student and Facebook user. Your computing habits are causing quite the stir. Get online and poke the night away.

Facebook is just the tip of the iceberg. The Internet is a never-ending marketplace for information. Moving forward it will reinvent how we conduct politics, economics, science, art and social relations. And our generation is pushing the envelope the hardest. So keep this in mind when you ponder your place in the real world - you have already made a real world impact (though it may only be in the wallet of one lucky nerd in Cambridge).

Alex Garlick '08.5 is a Political Science and Economics major from Needham, Mass.