Have I Become a Curmudgeon?

Nearly a decade ago I jumped on the Facebook bandwagon when it rolled into my university, before it became a phenomenon everyone and their uncle knew about. I was an early adopter of the iPhone, I play video games online, and I Tweet on a regular basis. But now, days before I turn 30, I feel like I'm becoming a curmudgeon in the world of social media and Internet investing. I can't keep up anymore with the latest fad, and I feel like I'm falling behind the times. Maybe this is what old age feels like. Maybe I'm out of touch. The thing is, I couldn't care less.

I began slowly recognizing my aversion to Internet companies when intrusive, information-overloading products from Facebook, Zynga (Nasdaq: ZNGA  ) , and LinkedIn (NYSE: LNKD  ) began creeping their way into my world. Facebook and LinkedIn were cool at first, but I have a good job, so I'm not sure how LinkedIn is going to help me anymore, and I've decided I don't need to know what people from high school are up to.

I heard the rage about FarmVille and decided to try it before Zynga's IPO, thinking I might write about the stock from time to time. But FarmVille wants to post on my wall and know who my friends are, what interests me, and who I have a crush on (wait -- I'm not even sure about the last one).

Then came the links to articles I couldn't read unless I signed my firstborn over to the app developer and Facebook.

The last straw for me was Pinterest. I saw Pinterests popping up on my Facebook wall and had to investigate the newest phenomenon. Since I still know a few "cool kids," I think I could get an invite to this "exclusive" club, but I don't want one. I don't want to register via Facebook Connect or Twitter, bombarding my poor friends and followers with Pinterests of mine. I like to golf, ski, and drink a good beer. If you need to know more, call me on my telephone, or we can talk in person.

I've seen this movie before
There are ebbs and flows in anything. Social media is all the rage right now because of the success Facebook and Twitter are having, but it won't last forever. There just isn't enough room for 100 social sites. And few are generating enough revenue to make investing in them worthwhile.

Remember that Internet bubble that popped, leaving IPO carnage all over the stock market in the early 2000s? Groupon (Nasdaq: GRPN  ) , Yelp (NYSE: YELP  ) , Pandora (NYSE: P  ) , Zynga, and LinkedIn look far too similar to these failures to warrant my attention for long, much less my investment. Groupon's business model has already proven easily copied, and I'm not convinced that Pandora can scale up a growing customer base to produce big profits even in the long run. With Yelp, it's nice to read reviews, but there are plenty of other places to find them. Even Facebook, as popular as it is, falls in the same boat. Or maybe I'm out of touch.

Why I'm betting against Facebook
The biggest thing that may please or appall some of my fellow Fools is that I plan to short the upcoming Facebook IPO. No matter how popular Facebook is right now, history just isn't on its side. AOL used to be the place to talk with friends online. Then it became MySpace, and now it's Facebook. But Facebook is allowing more private information to leak out, and games like Zynga's, which are where Facebook makes money, are starting to annoy users.

It will start with curmudgeons like me deciding that Facebook just doesn't add any value to our lives. Then the kids will get tired of distant aunts and uncles posting on their walls and move on to something new -- maybe a network where grandma can't see your every move. Pretty soon, Facebook will become that thing we used to do, just like MySpace and instant messaging. Remember those? They were around not so long ago.

Am I getting wiser or simply older?
I'm not sure if my newfound aversion to social media is the result of my becoming older and out of touch, my realization that personal interactions are more important, or a trend among those of us who used to be early adopters.

Maybe it's just a sign that I don't fall for investment fads anymore. I want a solid business with revenue, profits, and a market that's growing. Whatever it is, I'm comfortable becoming an investing curmudgeon like those who missed out on the first Internet bubble. Hopefully I can miss out on some explosive IPOs and be left with a solid business, rather than a worthless ownership share in a has-been Internet stock, just like last time.

Are you going to jump on the Facebook bandwagon or jump off like me? Leave your thoughts in the comments section below.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of LinkedIn. Motley Fool newsletter services have recommended buying shares of LinkedIn. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (5) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 09, 2012, at 4:38 PM, IlluminatInvest wrote:

    Why would you want to short Facebook when you can short LinkedIn instead? At least Facebook users actually consistently use their site, and the overly optimistic analysts covering LNKD are projecting such lofty revenue growth that they think it will pass Facebook someday even though its addressable market is much smaller.

  • Report this Comment On April 09, 2012, at 4:39 PM, lucasmonger wrote:

    Well put. Although we'd all love to go back in time and buy Google at $100 or so during its IPO or Apple even at $7 per share during the dot bomb era, the recent onslaught of internet IPOs (LinkedIn, Groupon, Pandora) have not done well at all for investors. The only folks making money off of these IPOs are the investors and employees who owned stock who can now sell them for something.

    Google is trying their hardest to compete with Facebook, but I predict that the next biggest tech thing isn't going to necessarily be social media, but something completely different, maybe some mashup of wikipedia, Wolfram Alpha, and ask.com where you just ask a question and the cloud/internet figures out the answer. Or maybe Amazon grows to beyond books and items and goes deeper with one stop tech online support and user manuals for everything ever sold.

  • Report this Comment On April 09, 2012, at 9:08 PM, accelerando wrote:

    Wrote this some time ago -- jibes almost exactly with what you are saying. One thing to add is that my absolutely cool 17 year old niece and her similarly cool friends are already jumping away from facebook.

    "Couldn't agree more. Hope the hype and collapse of facebook stock doesn't take down the whole market.

    First there was AOL -- it was the place to go to 'socialize' using the internet -- their 'romantic' chatrooms kept them popular even when folks where migrating away from their service.

    AOL was replaced by yahoo. All the groups and chatrooms and dating and stuff --- the place to hang out to meet and greet until someone had a better idea.

    MySpace was the better idea and soon the chat on yahoo degenerated into conventions of idiots while myspace grew like wildfire until every kid and many adults had to have a myspace page.

    Now we have facebook. Replaced myspace mostly because myspace was taken over by advertising. Facebook is so doomed. Already uncool among the hipper teenagers, it's interface is crude and the inbuilt privacy issues of storing all your most personal info in a large corporation's central data base cannot be overcome.

    All of these 'social networks' suffered from the same basic problem. The only way to monetize was to sell advertising. The more advertising and the more intrusive the advertising, the less anyone wants to hang out.

    Next probably is some peer-to-peer social network that is ad hoc, extremely robust and ridiculously cheap to maintain. Probably charge people a small fee and leave fakebook in the dust.

    Would be very surprised if facebook is worth as much as 10 billion 2 years from now."

  • Report this Comment On April 10, 2012, at 11:49 AM, DJDynamicNC wrote:

    My sense is that Facebook is already on the downward trend, but that's a purely anecdotal and emotional feeling that I am completely unable to back up with data, so take that opinion for what it's worth (which is very little).

    There's a great deal of user fatigue. I get hundreds of notifications daily, about 10 of which I'm actually interested in. Maintaining my page takes time I don't have and don't want to spend. If I trim out the groups I'm a member of, other people can simply add me to different groups - without my permission.

    Google's doing social right for the long term. People want the internet to offer what Facebook offers, without going in to a walled off eco-system and without a ton of annoying management. Facebook gets this and is trying to offer everything that people use on the internet at large through their own service, and they might be successful, but I think Google will pull it off because of how adroitly they've positioned themselves in the mobile web. Google+ is part and parcel of the Android experience; I ignored G+ until got an Android phone, then it became a daily part of my life. It's still a work in progress, but if they can get it where it needs to be, they'll destroy Facebook.

  • Report this Comment On April 10, 2012, at 12:34 PM, TMFJebbo wrote:

    If you do short facebook I'd love to see a diary of what you are doing so we can follow along. I thought the same thing about the myspace vs facebook comparison. I don't know how relevant it is though since fb is so much larger now.

    Jeb

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