The year of Facebook

BERKELEY, Calif. (MarketWatch) � This Facebook Inc. IPO is going to be the worst. The year ahead will be miserable because of it.

First of all, we have to hear about the crop of instant millionaires and billionaires. When did becoming an instant billionaire become so commonplace?

A graffiti artist who was gifted some shares for scribbling something will be worth $200 million! How does that make you feel, loser?

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The symbiotic relationship between Facebook and Zynga is creating riches for both companies, but their co-dependency also raises questions for both businesses, Shayndi Raice reports.

We�ll hear about how Chief Executive Mark Zuckerberg will only take a salary of $1 per year and live skimming off his pot of newfound wealth. This makes a mockery of everyone who actually works for a living, since he will pay zero taxes on the $1 salary.

Who started this idiotic insult anyway? Was it Bill Gates? Was it Steve Jobs? At least you�d think Zuckerberg could be somewhat creative and make it $2.99 or something.

Of course, everyone will want to somehow get in on this IPO. This means one thing and one thing only: Buying shares of Zynga Inc. ZNGA �I�m looking at this as some great short opportunities sometime next year. Zynga, I�m watching you.

There�s also a lot of chatter on Twitter, including some snide remarks directed at me @therealdvorak saying I told the world that because of the Sarbanes-Oxley Act there would be no more tech IPOs.

Let me reiterate my comments about this: Sarbanes-Oxley is preventing small companies from going forward with an IPO, not monsters like Facebook FB . That�s the problem.

So the Facebook IPO likely will be a huge success, and there is no reason not to think of it as the canary in the coal mine. As long as it holds up, things will be rosy.

I�m not quite in this camp. I think Facebook is subject to the exact same shift that took place after the dot-com crash of 2000: The ad business started rethinking its online strategies.

The company�s revenue for 2011 was $3.7 billion, mostly in online advertising. But every few years, something happens and the entire advertising universe decides that things need to change. Ads are pulled back.

This collapse of advertising revenues was obvious around 2001. Suddenly there was a new litany floating around that simply said �online advertising does not work.�

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H-P�s Meg Whitman may take only a $1 salary as chief executive, but her stock-based compensation totals more than $16 million last year, Arik Hesseldahl reports. (Photo: AP)

It does work, as we eventually learned, but for that moment it did not work. A lot of companies were hurt, and many which relied on advertising as their main source of income were ruined.

Luckily for Facebook, it is considering a premium version of the service and it manages to get a lot of royalty income from Zynga, which cajoles money out of its users the old-fashioned way through salesmanship.

My concern about the Year of Facebook is that it does represent a true bubble. If Zuckerberg and company can manage to keep the bubble from bursting, though, it may benefit the whole country. It will benefit the local economy, that�s for sure � and real estate in the San Francisco Bay Area is showing its old vigor.

At the end of the day, when evaluating the impact of Facebook, you have to ask yourself which of three things does it indicate: Is it just a one-shot event with no further impact on the tech sector or the overall economy?

Second, is it a harbinger of the future, the way the IPO from Netscape was in 1995? Netscape going public marked the beginning of a go-go era that lasted six years.

Third, is this IPO and the whole Facebook action in and of itself the bubble about to burst, putting us right in the middle of 2001 collapse? This would mean it was actually the Google IPO in 2004 that mirrored the earlier Netscape harbinger.

In other words, it could all be over. We�ll find out soon enough.