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A Debate: Should You Jump In On Facebook Debut?

And while the big profit growth for Facebook is impressive, it's slowing, and has been for three years. Last quarter, the growth turned negative, meaning it fell â¿¿ down 12 percent from the first three months a year earlier.

I think Facebook is one of the best things to happen in America in years. It's an unlikely, brazen success that makes you believe that the nation's best days may still be ahead. A college kid starts an online bulletin board for his classmates in 2004, and now one-seventh of the world's population is using it.

And the company is not just profitable, but incredibly so. Whereas most big, publicly-traded companies have to content themselves with pulling 13 cents of earnings out of every dollar of sales before paying taxes, Facebook gets to keep a seemingly impossible 46 cents.

And therein lies another problem: No company can sustain margins that high for long. If you believe America is a place that gives rise to destructive, capitalistic forces like Mark Zuckerberg, you know those margins are going to collapse, and fast. They are too high not to attract competitors.

What Facebook did to MySpace, a rival yet unknown can do to it. Or a rival suddenly known, like Pinterest.

Not familiar with that company? I wasn't until earlier this year. A sort of online scrapbook, Pinterest now has 10 million monthly visitors, even though its site was launched just in 2009. That early growth is faster than even Facebook's was, according to comScore, a tracker of Internet traffic.

The fact is, the social media industry is too open to competition for comfort. It lacks what Warren Buffett calls a "deep moat" protecting it from rivals. Scoff if you want, but how many college kids can build a rival to Burlington Northern Santa Fe railroad, a Buffett holding? Where would they get the steel for the lines, much less the men to lay them?

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