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What the Browser Wars Say About Facebook

The following video is part of our "Motley Fool Conversations" series, in which Chief Technology Officer Jeremy Phillips and senior technology analyst Eric Bleeker discuss topics across the investing world.

Microsoft continues its inexorable decline in the browser wars. Certain studies are now showing Chrome has passed Internet Explorer. Given enough time, it's a veritable certainty Chrome will become the dominant browser. As Eric explains, Chrome's winning in and of itself doesn't mean a whole lot for Google investors. The point of Chrome was to push forward the progress of the Web as the browser came out at a time when Microsoft hadn't updated Internet Explorer in a historically long period. Whether or not Chrome continues racking up market share, the company has forced Microsoft from its inaction and into supporting a browser which enables many of the next-generation features Google desired. 

Looking longer term, Eric compares the browser wars to a larger trend: the inability to determine value from a new technology platform. Initially, investors believed ISPs like AOL would be insanely valuable, but that turned out to be false. Likewise, Microsoft fought for its browser to be dominant while initially ignoring search. History has told us that browsers ended up being of little value while search emerged as a huge industry. Likewise, Facebook just IPO'd to huge multiples on the promise of a huge user base. In this video, Eric discusses how the inability to forecast the value of fledgling platforms could be an ominous sign for Facebook.

Facebook recently became the largest company ever to IPO. Yet all the buzz around this social media monster could prove off-base, as Facebook has deep problems converting its millions of members to revenue. We've created a new report, "Forget Facebook -- Here's the Tech IPO You Should Be Buying," that details a much better social media stock that has a longer runway for growth than Facebook. The report won't be available forever, so click here to get access today -- it's totally free.

Eric Bleeker has no positions in the stocks mentioned above. Jeremy Phillips has no positions in the stocks mentioned above. The Motley Fool owns shares of Google, Facebook, and Microsoft. Motley Fool newsletter services recommend Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On May 27, 2012, at 4:30 AM, Odysseus221 wrote:

    I am not clear about how the Facebook IPO did not violate all kinds of fair-play laws involved with securities distribution. Obviously the whole production of the IPO was tainted with misinformation.

    What is of special interest to me is the founders role and responsibility in these matters--if any. After all, he stood to gain the most in this effort.

    Additionally, there were rumblings originally, that the founder simply stole someone else's idea he was working on.

    While my information may be incomplete in these matters, connecting the dots here isn't hard to do.

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