Content Marketing Blog

Study: Half of Americans think Facebook is just a passing fad

Potential shareholders may want to rethink their position on Facebook after a poll found that most Americans think the social networking site is just a fad.

The results from the Associated Press-CNBC study – which in Australia were released earlier this morning (May 16) – may cast a shadow of doubt over the expected value of the company ahead of its IPO.

Roughly one third of those surveyed felt that current estimates reflect the social network's real worth, while 50 said that the figure was just too high.

Investors were even more critical, with 58 per cent saying that Facebook shares were overvalued and only three in 10 potential shareholders felt that the current going price was appropriate.

However, a high entry point may not be enough to turn investors away with many still saying that they had plans to buy into the company.

On Tuesday (May 15), Facebook took what some are referring to as the bold move of increasing its share price from $28 to $35 to $34 to $38 each.

But it seems that Zuckerberg is hoping young investors who regularly use the social network will help to keep the share price competitive.

Among those under the age of 35, almost 59 per cent said that Facebook was a good bet, but when it came to those from older generations, the odds were a little less favourable.

Less than 40 per cent of those aged 65 and over thought that investing in the company was a good idea revealing a generational divide.

With more young people logging on to social networks, it makes sense that this generation would have a higher esteem for its commercial worth.

Gen X and at least half of those who identify as Baby Boomers were also willing to place money on Facebook going well.

Posted by Aimee McBride