Facebook seeks money in IPO, campaigns use tech
Facebook founder and CEO Mark Zuckerberg looks on during a news conference at Facebook headquarters on October 6, 2010 in Palo Alto, Calif. The company is expected to announce its IPO soon.
Facebook is expected to file paperwork for its initial public offering (IPO) as soon as today. The company may be valued as high as $100 billion. An astronomical amount, to be sure. Even if that number is off, the valuation will be high and Facebook, now faced with investors, will have to generate a lot of money to live up to it.
The way Facebook makes money, remember, is from advertising to you. And the more they know about you, the more they can tailor those ads. Tailored ads have a better chance of leading to sales so they're more valuable to advertisers who will pay more to Facebook. Ergo: the more you share, the more Facebook makes. So a public Facebook will give you a lot of chances to share information that could form a marketing profile.
Brian Cooley from CNET says the public Facebook might also be more transparent about what it's doing. "They've got to tell us what they're worried about," he says, "what competitors are coming after them, where they might fail, and we might get more visibility into what the company is going to do with our data -- how it's going to comply with various pressures and regulations, depending on how formal those are."
We now turn from the enormous pile of Facebook money to the enormous pile of presidential campaign money. Mitt Romney won the Florida primary but the race for the Republican nomination is far from over. Many more states lie ahead for the Republican candidates, each demanding plenty of money for field operations, TV and print ads, and a thousand other expenses. Whichever GOP hopeful gets the nomination will then have to compete against President Obama and his reelection campaign's warchest.
All the candidates, Obama and the Republicans, are trying to raise as much money as they can for the long slog ahead. One option: Square. It's a way of making payments through a mobile phone. You swipe a credit card through a little device attached to the phone or enter the information on a special app.
President Obama's reelection campaign has been using Square for a while, Romney's campaign planned to start trying it out last night in Florida. Tony Romm from Politico says Square has been a hot topic in Washington lately because campaigns see it as a way to gather money more easily. "It's really about accessibility," Romm says. "If you're working for a campaign, you've got the attachment for iPhone for Square for instance, and you're out and about on primary day, you can connect with voters and more intimately with a cell phone, take up those small donations that are beginning to be more commonplace in the election season."
But even if you're using a new system, you still have to follow the old rules. "You have to collect information about the individual," says Romm, "you know their name and their address and the payment information has to be complete, and it has to be protected data, you know we're still talking about same rules and regulations."
Then there's text messaging, which managed to raise a lot of money for Haiti after the earthquake there. You could send a short message that served to donate five or ten dollars to relief efforts. "The notion that you're going to text message a donation directly to a campaign, that ain't happening," says Micah Sifry of TechPresident.com. He says text donations to charity work fine, "but that's because folks have set up special nonprofit channel so that the mobile providers don't garnish all the money. When you do financial transaction through texting, your cell phone typically wants to take half the proceeds, and hold the money until you pay your bill, so it's not like an instant donation the way that going to a campaign's website or in this case now, maybe doing it with a credit card through one of these Square readers will be."
But while new technologies like Square are interesting, the good old fashioned world wide web still rakes in plenty of dollars. "The bottom line is most of the money these campaigns are going to raise these days are going go by people finding their website and making the donation there," says Sifry, "or being asked either through an email or being tapped on the shoulder by a friend who's using the campaign's tools to create their own fundraising page. At mybarackobama.com, there's a way for you to set up your own donation page where you can go out and email your friends and say 'click here so the donation gets credited to me', and that's a nice way for people to network their own social circle. Mitt Romney has something similar which they call myMitt. It's not nearly as technologically sophisticated, but they're catching up quickly."