Facebook’s Stock Listing and the Path to New Industry Creation

Facebook, the largest company in the social networking industry, will list on the New York Stock Exchange by the end of this week.

With over 900,000 users, Facebook’s popularity is remarkable. Mark Zuckerberg, the 28-year-old CEO, has become as popular as a movie star, with fans anxious to catch a glimpse of him when he visits major U.S. cities.

At the time of the stock listing, Facebook’s capital has the potential of breaking $1 trillion and could surpass Google as one of the greatest stock market success stories in history.

Although Japan enthusiastically discusses business creation, new businesses haven’t been created for a long time. Meanwhile, the issue of whether Japan Airlines and Seibu’s holdings will recover is creating plenty of drama. What keeps new businesses from developing in Japan like they do in the U.S.?

For starters, Japanese society is not very open to new businesses because of their inexperience, lack of services and technology. The U.S., on the other hand, tolerates the mistakes and inexperience of new businesses, allowing start-up companies like Facebook to grow into major corporations. Even Facebook, which has dealt with problems concerning beauty contests and privacy controls, can attribute its growth to America’s acceptance.

Secondly, start-up companies in the U.S. have more capital from investment. While the overhead capital from investments for Japan’s start-up companies is more than $250 million, Facebook’s capital was $1.5 billion in January last year.

In addition, the abundance of talented individuals in the U.S. is apparent. Talent is critical to the emergence of successful businesses and Facebook is no exception.

The market occasionally overheats and there is fear that wild enthusiasm will create a bubble. Whether Facebook continues to grow is uncertain. However, amidst the stagnant economic conditions in developed countries, the best path to recovery allows new businesses to emerge and overcome their problems. Facebook’s success should be our guide.