How Should Facebook Use $10 Billion in IPO Cash?

Doing nothing is not an option. I don't even know why that was mentioned. You can't sit on money like that. However, they probably will let the dust settle for a few weeks or few months before spending their cash. At least I hope so.

They aren't going to pull a Microsoft and purchase a search company. Google is not as much of a threat really. Search isn't Facebook's expertise and it isn't their market. They would be happy letting Google continue to drive people around for answers on the web, while Facebook will continue to entertain and be friendship/family/work/etc. communication/community focused.

So what should they do with it? Focus on communication, community/community needs, and gaming. They need to ensure that they keep the attention of their existing community.

As for what to do with the cash:

1. Hire some awesome user experience/interface people. And those people need to work on timeline/profile view. The only reason people aren't complaining more about it is that FB like Google does not really provide a customer support experience that makes you feel like they actually care about your opinion individually. If you've ever submitted a bug to FB, you know what I mean. As for the interface, alternating left and right updates on the timeline makes it tougher to read and find things. And the whole feed thing on the right needs to go away. There should be a single feed page and a single profile page with controls to change filtering on posts. That is so obvious and ubiquitous elsewhere, so failing to provide a good interface for status updates when that is basically the point is ridiculous.

2. Hire some better folks to lead up API development. It is a huge mess right now. Too many APIs that don't all do the same thing, and breaking Javascript API with changes. Not cool.

3. For M&A, focus on bringing resources onboard for community, ratings and reviews, e-commerce focus. They could easily compete with Amazon and/or eBay within the existing social/community framework and it is a better idea for business than simply referrals, advertising, and selling imaginary sheep for people's imaginary farms.