Goldman Sachs is investing $450 million of its own money in Facebook, at a valuation that implies the social networking company is now worth $50 billion. Goldman is also apparently launching a fund that will bring its own high net worth clients in as investors for Facebook.
Goldman Sachs’s $450 million investment in Facebook has raised many questions. Apart from the involvement of Goldman Sachs debated here and here, what's interesting for any investment to be made is the future of Facebook and the world as we know it.
I think that Facebook is just all about what Davied Riesman, sociologist, described in self-explanatory titles of two books of the "50: The Lonely Crowd. New York, 1950. (With N. Glazer and R. Denney.) and Faces in the Crowd. New Haven, Conn., 1952.
Facebook is actually the triumph of "the other-directed character" described by David Riesman. How to define one's self becomes a function of the way others live, thus "shared" in Facebook where a person wants to be loved and "liked" rather than esteemed. Those who are in Faceebook are other-directed and need assurance that they are emotionally in tune with others.
I would say, taking it from Riesman, "that isn't it possible that Facebook is as a whole a fantastic fraud, presenting an image of people, a crowd, taken seriously by no one, least of all the ones who sign up or invest in its shares? It's a lonely crowd, stupid! The face of the crowd...Facebook.
P.S.: I joined Facebook a few months ago because some people were keeping sending me e-mails from their Facebook accounts asking to be my friend. I've signed up but frankly speaking I am a bit at odds with the spirit of that social networking. For that and other reasons I would question the valuation of Goldman Sachs and I have, like others, some serious doubts about the return on investment in the long run....
UPDATE: This video is self-explanatory