The performance of Facebook shares might have fallen short of expectations but Charles Sturt University (CSU) Information Technology lecturer Mr Ken Eustace said there’s plenty of interest in the social networking company.

 

Facebook listed on the Nasdaq Stock Exchange on Friday with more than 570 million shares traded, setting a new record for a US stock debut.

 

Mr Eustace from CSU’s School of Computing and Mathematics wasn’t surprised by the hype surrounding the initial public offer.

 

“Everybody knows Facebook for one reason or another and investors are always looking to get in early on the next big thing,” Mr Eustace said. “Social media is a huge marketplace that uses networks of friends or associates. News Limited, Microsoft and Google have all tried to work their way into the social media economy.”

 

In what many analysts have described as a lack lustre performance, the first day of trade saw  Facebook shares rise to $US41.50 before closing just above the initial listing price of $US38.

 

“The fact it has 800 million users is too big to ignore, but Facebook has a fluid dynamic unlike most successful IT companies. A successful social network has to renew itself and to nurture its members by use of its interface or usability, its sociability, and building a reputation leading to trust. All contribute to the sustainability of online communities,” he said.

 

Mr Eustace said the estimated value of Facebook at $18 billion is modest compared to other IT companies.

 

“It’s a bit like comparing apples to oranges but perhaps Google and Yahoo are a loose benchmark for comparison. Google today is valued at about $203 billion at $623 per share, that’s less than half the value of Apple at $495 billion and even the struggling Yahoo comes in at an $18.2 billion.”

 

Mr Eustace expects the early trading days to be volatile and fluctuate in the short term as some of the members may not want to be part of the company and so part ways, while others may be attracted to buy shares.

 

“Facebook will change, as being a public company will alter its roles, governance and the rules of engagement for members. One of the new roles for some Facebook members is that now they will act as both a member and investor. That in itself will change how the social network operates.”