Is facebook too big to fail?

Source: http://bits.blogs.nytimes.com/2012/10/04/facebook-passes-1-billion-active-users/?ref=technology

[Facebook] said Thursday that it had a billion users worldwide who logged into Facebook at least once a month. The number is all the more remarkable considering that Facebook was created only seven years ago and has doubled its user base in the last two years alone. It took McDonald’s about 40 years to attract a billion customers.

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Facebook has lost nearly half its value since going public in May at $38 a share. Thursday’s announcement did not seem to cheer the market much: the stock closed at $21.95, up 12 cents, or 0.54 percent. 

The fact that facebook doubles its user base from 2 years ago while its stock price is almost half of its price at IPO demonstrates a simple concept of the social game: users are not equal to revenue.

Take a look at myspace: at its peak it had more than 100 million users (also regarded too big to fail then), and generated 800 million in annual revenue, but was defeated by Facebook. Many reasons could have caused the decline, in my mind, 2 stuck out: myspace had a closed platform in terms of development, and bent towards the advertising revenue instead of its users. The former limited what the platform was capable of. We can see how facebook's succeeded with the open philosophy of Farmville and the number of web services that has fbconnect. The latter had made the site slow bulky and more importantly inflexible when the innovative competitor facebook appeared and constantly changed to better serve the users

Mr. Zuckerberg told Businessweek that while he found his company’s market performance “disappointing,” he was not prepared to make changes for short-term gain.

“I mean, we care about all the investors, and that’s really important,” hetold the magazine. “And I think the only thing we can really do is focus on making the company worth as much as possible over the long term.”

He added: “I suppose there could be short-term things that we could do, but we’re not going to focus on those. We’re going to focus on the long-term stuff.”

I agree with zuckerberg when he says 'we are going to focus on the longterm stuff'. The only value that social companies have are the users, if facebook alienates its users by trying to create revenue too much,  then its only going to be another myspace

Facebook is not too big to fail, but as far as I am concerned, it will not fail.