Facebook: not quite staring into the abyss yet

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The platform wars have created the following paradox; in order to compete with Facebook, Google attempts to build a social network, In order to compete with Google, Facebook attempts to build a phone — both diverging away from their core competency in their efforts.

The rise of Mark Zuckerberg's Facebook was so Schumpeterian in both style and substance that it had the seeds of its own destruction planted in it from day one. The bohemian-intellectual image successfully pioneered in the early 2000s by the founders of Google effectively vaccinated the markets, for better of for worse, against the idea that tech companies were subject to the same valuation and/or reporting constraints as old-economy stocks. But Mr Zuckerberg is of a different generation, and a different type, to Mssrs Brin and Page—and Ms Sandberg, likewise, is no Eric Schmidt. What has consistently characterised Facebook has been its superficiality: emerging, more accidentally than by design, as the off-hours toy of a college dropout, its strategy has never conformed to notions such as customer service, integrity or transparency.

And while it is unlucky for Mr Zuckerberg that his toy's IPO coincided with the jitters induced by the euro crisis, the fact is that its valuation, at about 65 times consensus 2013 estimated earnings per share, was, by any stretch of the imagination, absurd. Indeed, it still is.

Yet beyond the rather trivial fact of overvaluation—unfortunate, perhaps, for those who bought securities supported by nothing more than hype, but on his own systematically short-term assumptions hugely beneficial to Mr Zuckerberg who thus achieved his childish ambition of valuing Facebook at one hundred billion dollars—the most astonishing thing is that the world's largest social network, like Myspace which was in that position just five years ago, has no strategy. Ms Totsis, who has seen through Mr Zuckerberg's main weakness—his attention-deficit syndrome—rightly puts the likelihood of Facebook succeeding in a move into the phone sector as rather on the low side:

This kind of project, as others have speculated, requires the kind of execution Facebook isn’t known for, and the company will most likely have to work with a third-party in order to actually ship. Some have suggested that it buy a beleaguered hardware startup like RIM or a stalwart like HTC because the kind of long-term focus required here is just not endemic to Facebook company culture.

Facebook isn't staring into the abyss—yet. But Mr Zuckerberg, like many of his generation, appears structurally incapable of long-term planning. I'd be interested to read something—anything—making a serious case for the company pulling out of the hole into which it has got itself, entirely through its founder's childish unbearable lightness of being.