Stupid use of FB "like" button

[glassgowkiss]

FB- too big to fail?

[rob]

meh. Stock valuation aside, you're pretty quick to declare dead a profitable company -- even the most pessimistic forecasts call for 40-45% growth this year alone, which admittedly is down from last year's 50%. In light of their ridiculous stock price, these numbers are quite modest and obviously highlight the company's ridiculous market valuation -- but 40% growth by itself is nothing to sneeze at, especially when the company has a 50% operating margin.

 

Of course facebook won't last forever, but it is still really premature to start planning their funeral. An overvalued stock does not mean the underlying company is unhealthy, and even assuming the most pessimistic near-term forecasts, it will take FB *years* to become unprofitable.

 

Comparisons of FB to myspace or washington mutual are pretty irrelevant, as are statements that FB is "limping along." Amazon is actually a much better comparison btw -- their market valuation is nearly as retarded, and their profit margin has become PAPER THIN.

[rob]

Myspace had 1/4 the users. Why isn't that valid? Shit, I wish I had those hotsluts friending me.

 

Yeah, but myspace had a fraction of the revenue. Just because they're in the same market space doesn't mean they're the same. It's like comparing Carl's Jr. to McDonalds, or something.

 

I agree with you about the flaw in the FB model of advertising wherin the ads are actually on the FB page itself -- this is not where the money is. My prediction (and others) is that FB will eventually launch a global advertising framework (like google's adsense) that will allow external websites to target ads to me based on my FB user profile. Talk about privacy concerns!

[glassgowkiss]

it is another bubble. Gee- 40% value of what? servers? FB is good for selling hype and bullshit. I never click on any adds, my friends don't either. Honestly people should get a clue and look beyond hype. The same with jobs, that ended in 2008- everyone was drinking coolaid of bush era "growths"- which was fuck all production of a suburbia.

[rob]

Gee- 40% value of what? servers?

 

no, 40% of revenue. You're kidding, right?

 

Agreed that FB is overhyped, but 40% revenue growth isn't exactly an indication of impending failure. Of course, the revenue growth is declining....

 

You're correct, it could definitely dry up, especially as the online advertising market gets more and more crowded. But comparing FB to the housing boom is pretty ridiculous -- it sounds almost like you're trying to claim that FB isn't actually making any money, but I'm sure I must be misunderstanding what you mean.

 

As to their stock being in a bubble -- not really. They're down another ~10% today, and look to keep going down. Hardly the definition of a bubble -- looks more like a bursting bubble, to me. Had it stayed at 38 and gone up -- definitely, that would have been some crazy shit. But it looks to me like the stock is simply normalizing to rational levels where it will no longer be overvalued -- I expect it to stop falling around $15-$20. We'll see.

[rob]

it sounds almost like you're trying to claim that FB isn't actually making any money, but I'm sure I must be misunderstanding what you mean.

 

I guess maybe you're just saying the value of the service they are providing is not worth the revenue they are seeing -- over $1 billion last quarter alone!

 

I'd tend to agree with you. But I guess people are giving them money, anyway. It will be interesting to see what their next quarter results look like and if their YOY declining revenue trend can be corrected.

 

[glassgowkiss]

Apparently all these companies like Enron, banks and such fuck-all industries were making money. They are "making money" because they say they are making money. The thing is none of this is real anymore. People should wake up to the fact that is is hype and bullshit. When you look at UPS or Apple- they have infrastructure and assets, and produce a physical product and deliver a service. A few servers doesn't make much of an asset. And "earning potential"?- well, just look what happened in 2000 market crash.

[Jim]

In general, I find FB a very odd business model, particuarly for a public company. No product other than advertising dollars - keyed to personal information and without studies to show that it is effective in steering customers to clients. Seems rather misplaced fascination with a business model that is not sustainable. Amazon and Apple are on the bubble as well, but at least the have a product.

 

I suppose there will always be some portion of folks that find the social media intriguing, personally I find it amazingly banal and a waste of time. But, whatever (now CC.com on the other hand....at least it's not trying to go public). It's an economic blib and another naval gazing fad.

[rob]

Apparently all these companies like Enron, banks and such fuck-all industries were making money.

They are "making money" because they say they are making money. The thing is none of this is real anymore.

 

If this were true, why does Nokia bother admitting they are losing money like it's going out of style? Enron committed fraud -- that doesn't mean that now "none of this is real anymore." You've taken an over-zealously bombastic and hyperbolic position in response to inequity and corruption, much in the way Kevbone does. Chill out a bit, it's not all a conspiracy.

 

People should wake up to the fact that is is hype and bullshit. When you look at UPS or Apple- they have infrastructure and assets, and produce a physical product and deliver a service. A few servers doesn't make much of an asset.

 

Google isn't anything more than "a few servers." Are they hype, too? They're making money hand-over-fist.

 

Advertising companies have always been around, and providing advertising is as much of a service as any other industry. You can see the actual product they produce when you log onto websites and see the ads. They're real things, and people are paying for them, and companies will never stop paying for advertising.

 

Now, you can absolutely argue that the service they are providing isn't worth the billions they are making -- and I'd probably agree with you. But when you take an obviously emotional position and loudly offer up statements like "none of this is even real anymore" as proof, well -- your argument gets lost in the lunatic fringe and loses it's momentum.

 

In general, I find FB a very odd business model, particuarly for a public company. No product other than advertising dollars - keyed to personal information and without studies to show that it is effective in steering customers to clients. Seems rather misplaced fascination with a business model that is not sustainable.

 

yeah, and my grandparents said Rock 'n Roll was a fad. Just teasing you, old man

 

I don't find FB to be a weird business model at all. Look at the money the advertising companies on Madison Avenue made in the early-20th century. It was epic. Serious, serious cash! Companies making their money in advertising are not a new thing by any stretch of the imagination. What makes you say it's not sustainable? It's been going strong probably since the invention of publishing.

 

I think you're right, though, making money off of facebook.com advertising isn't a winning model - there isn't enough growth left in it. I think they're going to branch out and sell an advertising service that other websites can call into and provide FB-contextual ads on 3rd party sites. Basically, this is what google does, except that FB stands to achieve a higher level of micro-context than google can achieve via web searches alone. After all, FB knows what you like!

 

Kinda scary, isn't it?

Edited May 29, 2012 by rob

[Jim]

I would agree that there is money to be made in advertising - good point on the old Madison Ave mafia. But I'd also say the hype about it being a sustainable public company, or at least anywhere the valuations currently, is doomed.

 

And no, FB doesn't have my number - I've no need to be a member. I'm busy enough. Probably someone like Google is selling my data to someone out there, however.

[AlpineK]

There are files with detailed information on everybody. Are the FB files better? Maybe, but if people jump ship the amount of information and quality goes downhill.

[rob]

There are files with detailed information on everybody. Are the FB files better? Maybe, but if people jump ship the amount of information and quality goes downhill.

 

Sure. And Google would have this same problem if people started using Bing and hotmail. Every advertising firm faces this challenge.

 

The Neilson Company makes billions of dollars using almost the same business model as FB and google, only they're monitoring people's TV watching instead of internet usage (using special TV sets that people elect to have installed). They've been making tons of money since the 1930's, and even though TV is in decline (relatively), they still had a billion-dollar IPO of their own last year. And their growth was only a measly 2.6%, compared to FB's massive 100+% growth of last year.

 

Advertising is big bucks!

 

[glassgowkiss]

The difference is that Google essentially is an on-line library and allows ads to pay for other wise good service. FB is just a nice time waster, but has no real use, besides entertainment.

[pink]

The difference is that Google essentially is an on-line library and allows ads to pay for other wise good service. FB is just a nice time waster, but has no real use, besides entertainment.

 

you think way too much dude!

[KaskadskyjKozak]

The difference is that Google essentially is an on-line library and allows ads to pay for other wise good service. FB is just a nice time waster, but has no real use, besides entertainment.

 

you think way too much dude!

 

weird, I had drawn the exact opposite conclusion

Edited May 30, 2012 by KaskadskyjKozak

[G-spotter]

The difference is that Google essentially is an on-line library and allows ads to pay for other wise good service. FB is just a nice time waster, but has no real use, besides entertainment.

 

You seem to spend a lot of time on FB discussing cameras with people.

[rob]

FB is just a nice time waster, but has no real use, besides entertainment.

 

You mean, just like that other overhyped fad "television?"?

 

[KaskadskyjKozak]

FB is just a nice time waster, but has no real use, besides entertainment.

 

You mean, just like that other overhyped fad "television?"?

 

[/quote

 

Yeah, "entertainment" doesn't have a use or make money (movies, prof. sports, video games, TV, none of it!)

[prole]

FB is just a nice time waster, but has no real use, besides entertainment.

 

Yeah, if you give a shit what some moron you went to high school with is having for dinner. Guh, thanks for "sharing"...

 

 

[prole]

But hey, a corporation could then use that post to send that person (and you!) pop-up ads for Kraft Mac 'n Chee. Earth shattering stuff here, folks...

[rob]

I used to get a tremendous amount of Ron Paul ads.

[prole]

That was money well spent.

[KaskadskyjKozak]

FB is just a nice time waster, but has no real use, besides entertainment.

 

Yeah, if you give a shit what some moron you went to high school with is having for dinner. Guh, thanks for "sharing"...

 

 

Your such an Uebermensch, Prole.

[prole]

FB is just a nice time waster, but has no real use, besides entertainment.

 

Yeah, if you give a shit what some moron you went to high school with is having for dinner. Guh, thanks for "sharing"...

 

 

You're such an Uebermensch, Prole.

 

Uber you, anyway.

Edited May 30, 2012 by prole

[G-spotter]

I went to such an elitist high school that there were no morons. Sorry yours was second rate!