“You know how to whistle, don't you? You just put your lips together and blow.”

With apologies to Lauren Bacall, the Facebook S-1 is out,  and here are the numbers you need to know:

$1.974 to $3.711. $.606 to $1.

 

The first set of numbers are Facebook's revenues, in 2010 and 2011, in billions of dollars. That's nearly an 90% growth rate. The second set of numbers are Facebook's earnings for the same period. Fast growth, and $1 billion in earnings is nothing to sneeze at. But growth there is slower.

While most reporters are treating this document the way TMZ might treat Lindsay Lohan coming out of a limo, the question is whether you should take a flyer on it.

There are three answers to that.

1. Do you Facebook? If you don't, then don't touch the IPO. Don't invest in anything you don't understand, or at least know something about. And Facebook is pretty easy to understand once you join it. I did. Didn't like it. They still count me, but I haven't been to my page in a year. I use it to make snarky comments on Web sites that take that credential, I link stories from Seeking Alpha to it, and that's about it. No Farmville cows for me, and I don't look at their ads.

2. Do the math. Facebook is talking about a $100 billion valuation. That's an Amazon-like PE of 100 on trailing year's earnings, 50 if you think they can double it again this year. But they can't, because the law of large numbers says it's harder to move the needle as the numbers get bigger. Right now the market is treating Google at a PE of 20, Apple at 15, Microsoft at 10. My guess is they'll value it at $70 billion and expect a big pop at the open – you always have to have a big pop at the open or what's the point of doing the IPO? What did you pay the underwriters all those millions for, if not for a pop at the open?

3. Look at the headwinds. Forget Google Plus. They can't even get into China. Besides, China already has its own Facebooks, like RenRen, big companies that do whatever the government there says to do, without a qualm. And the market is highly competitive. It's not that they can't get in, I don't think they can compete. And if you can't make it there, your growth horizons narrow.

The S-1 claims there are 845 million “active” users on Facebook. I'm sure they include me in that total. I'm not one. Lots of people come into Facebook, and leave. Social networking is a very quirky business, competition always just a click away. It's mostly people who came of age after the Web was spun, the people who will really define the Internet (in contrast to my generation, which just built the thing).

How sticky is Facebook, really? How devoted are how many Facebook users to living their lives on Facebook? Sure, Facebook has “second-mover” advantage, in that they overhauled MySpace and learned some things. But is this the last evolution of the Web, the final chapter?

I don't think so. I don't think that chapter has been written yet. And anyone who does, I'll take your money, drink your milkshake, haz your cheezburger. To succeed Facebook has to ride, successfully, on top of a myriad of changes that have not happened yet.

Its chances of doing this are fair. At least as good as Google's. But as good as Amazon's? I don't think so. The social networking boom, as I've written, began to bust as soon as its shares came to the public market. (Bought any Groupon lately? Any LinkedIn?)

Trade it for fun, watch it rise like a skyrocket (because it will in the short term). You may have if you will, but I will have not.

But as soon as the lock-in period ends for the big shareholders, be gone and on to the next big thing.

It's coming. It's out there. The next big thing is always out there.

 

The U.S. complaint about Chinese “dumping” of polysilicon solar panels is a sideshow to the real battle, over which technology will dominate the next generation of solar panels.

GTM Research indicates polysilicon costs could drop this year to 70 cents per watt, although producers are doing all they can to dampen that speculation.

The action is in new technologies that will drop costs far below that level on CIGS and thin films of all kinds.

REC Group of Norway, an integrated maker of polysilicon-based panels, says their Peak Energy series can deliver a return on investment in just 12 months with the highest performance in the industry.

Meanwhile gallium-arsenide cell producer Semprius, based on North Carolina, says its print-transfer technology has produced a module with an efficiency of 33.9% – nearly three times what current cells produce. Scaling that up, raising yields and dropping production costs, could have a profound impact on the market. (Siemens has a 16% stake in Semprius.)

It's not just higher performance, but lower cost achieved through production efficiency that is driving these markets forward. This means leadership in the space remains highly fluid.

And to this has to be added improvements in inverter technology, which can cut costs by increasing the amount of DC power produced by a cell that goes onto the AC grid, to system manufacturing costs, to channel costs, and to reductions in the cost of getting installations approved by government at all levels.

As I have said before these are early days in the solar industry. This is going to become the cheap energy no matter how much we drill baby drill. The only real question is whether America can capitalize on its advantages in research and capital delivery, not whether China plays “fair.”

 

 

Think of this as Volume 16, Number 4 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Steve Jobs did something generations of political leaders have been unable to do.

He cemented the alliance between China and the United States.

He did this by making money for both, through cooperative development of his iOS line.  As he told the President, you can't make this in the U.S. We don't have the human infrastructure and logistics to produce, say, 37 million iPhones and 15.4 million iPads in one 90-day period, box them and and ship them, the way China can.

On the other hand, China lacks the software and marketing imagination needed to move that merchandise in countries around the world. It lacks the branding. Even the Chinese people know the difference between a real Apple Store and a Chinese knock-off. They will pay a premium for the real thing. And Apple, today, sits on $96.7 billion in cash.

Thus we have a symbiotic relationship, one that other companies can exploit, one that benefits the people and governments on both sides of the trade. Historically it's an important moment.

China and the United States are the great powers of the world today. No one denies this. Yet their economies are based on partnership, not competition. Peace, not war.

This has benefited China immensely. They have been able to keep what their armies took, Tibet, but they have taken the rest of what they wanted territorially without firing a shot. Taiwan just elected a leader dedicated to the slow absorption of his nation, Macau is going through an unprecedented boom, and Hong Kong is now the tip of a greater co-prosperity sphere that stretches right up the Pearl River Delta. And speaks English.

What folks don't yet credit is that this benefits the U.S. too. We're not getting the kind of Great Power pushback on our oil imperialism we got a generation ago, because opening those markets to oil exploration is in China's interest as much as it is ours. And companies like Apple, which design and market here but manufacture there, are going through an economic boom that makes the dot-com bubble look like something you'd find in a Coca-Cola.

Coca-Cola is a big part of this story, by the way. Coca-Cola, McDonald's, WalMart, and brands like them have created a global American culture, one that speaks English and has similar desires for a better, peaceful life. I saw this when I visited China in 2009.

The closest analog to what we have now is the U.S.-English detente that began after the War of 1812. But it's not similar at all. Because the world was different then, it wasn't a single global market.

No, it's not all going to be kumbaya. But both sides have a peace dividend right now, if they choose to seize it. And people on both sides now have opportunities to grow closer together, as individuals, in ways that can truly cement an enduring global peace.

Pax Steve.