As the social web matures and offers enterprises the promise of social media listening, monitoring, and engagement, the failed Facebook IPO exposes critical shortcomings of Mark Zuckerberg's nascent social network technology.
With rumors of Facebook's inflated pre-IPO valuation spreading like wildfire across the Internet, Zuckerberg's social networking technology failed to detect widespread social media commentary suggesting that the website's proposed $104.2 billion valuation was excessive -- and adjust its valuation accordingly.
The promise of social media's ability to perceive and influence popular opinion was lost on the website operator's management at a critical moment. And this at the same time that the potential for crowd-sourced fundraising was being proven by new entrants such as KickStarter and IndieGogo.
Facebook's social listening capabilities were unable to provide reliable data to IPO pricing analysts, and the network was presumably forced to rely on conventional mechanisms of Wall Street investment bankers.
Facebook's inability to detect social trends and influence pricing of its own IPO does not bode well for brand advertisers seeking to utilize the website to monitor and influence social trends regarding their own brands.
Ultimately these shortcomings expose challenges in Facebook's ability to generate significant advertising revenues providing social media services to advertisers.