Facebook IPO? Flat. Facebook future? Bright.

Facebook IPO generated no big stock gains on its first day of trading. But Facebook has many of the traits that made Apple, Microsoft, and Google great in the long run. ?

By Charles Arthur,?Contributor / May 19, 2012

Facebook Chairman and CEO Mark Zuckerberg (first row, second from right) applauds at the opening bell of the Nasdaq stock market Friday from Facebook headquarters in Menlo Park, Calif. The Facebook IPO fell flat, with shares at the close only 23 cents above their opening price of $38. But the company's best days lay ahead.

Zef Nikolla/Nasdaq via Facebook/AP

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So the Facebook IPO finally took place and Facebook shares are now available for all and sundry ? worth at the end of their first day of trading almost exactly what they were worth at the beginning: about $38 apiece.

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Now the next difficult question: Is Facebook the next Apple, Google, or Microsoft ? that triumvirate of companies that we tend to come across one way or another in our daily dealings, or which have in some way or other driven how we experience the Web today? (You might not own an Apple device, but if you've used a smartphone recently then it probably had a touch-screen-driven system, and apps, and you might have thought about buying music from an online store.)

So is Facebook going to drive our Web experience forward in the way that those three have? In researching and writing my book "Digital Wars," on how those three companies have interacted down the years, a few points became clear to me.

First, if you get it right, then controlling the software platform can make you very rich. Microsoft owns Windows and Office, and together they actually contribute about 105 percent of its profits every quarter (other divisions, notably search, then make a loss, bringing us back to 100 percent).

Equally, you have to have the right way of making money from that software. Apple owns iOS and Mac OSX, its mobile and desktop operating systems, and because it also controls the hardware, it can rake in colossal amounts of money. But when it briefly tried licensing the Mac OS back in the 1990s, it nearly killed the company, because the ecosystem was too small. So you need breadth ? in effect, a broad monopoly ? for a software platform to be viable.

The next lesson is that Web companies are very vulnerable to disruption. Google in 1998 (when my book opens) was just an upstart, a company that thought it had a better way to search. But many people thought then that search was solved; Yahoo turned down Google's search algorithm because it was too good, which would mean too few people would look at the pages where it sold ads. Google zoomed past Yahoo within a few years.

What also helps: getting embedded into the public consciousness. The first use of "Google" as a verb that I could find in a newspaper was in January 2001; by February 2003 it was being mentioned in passing in an episode of ER, then the biggest show on TV. Nobody has ever, ever used any of the various names for Microsoft's search engine as a verb. Everyone knows what you mean by "Googling" something. That's pretty hard to dislodge.

Finally: It really helps to have a strong, driven leader who feels deeply involved in the company's fate. Apple benefited hugely from Steve Jobs returning in 1996/7; he felt that what happened to Apple reflected deeply on him, and to some extent he couldn't separate himself from it. Bill Gates was Microsoft, for quite a lot of its life: a hard-driving, detail-crunching, incredibly smart businessman. Google's founders, Larry Page and Sergey Brin, have made many of the key decisions (such as buying the mobile company Android in 2005, without even referring to their then-chief executive Eric Schmidt).

So if we roll all that together, what can we forecast for Facebook?

Working backwards: Facebook chief executive Mark Zuckerberg is deeply committed to it. He is not doing Facebook as a side project; he's not in it to cash out, because he could have done that years ago. This is his life's work, and he is clearly going to try to make it the biggest company it can possibly be.

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