Facebook's valuation (in Whoppers)
kottke.org
kottke.org
It should actually be a little less, since at some point there will only be 9 users who will have missed out on the flurry of unfriending, like victims of a fattening ponzi scheme.
That's 100,000,000,000 calories (50,000,000 days worth of food for a 2000 calorie diet), for anyone who's into counting calories.
This whole idea of it not being big enough yet is asinine.
I guess the side would not last long with this approach, but it would make a few dollars in the next days.
The 'platform' seems to be dominated by idle people who prefer free services that let them spend their day throwing virtual sheep at each other. That's not a particularly valuable demographic for businesses seeking to advertise their wares.
Much better, by far, to purchase targeted advertising on Google.
No, it is certainly not Adwords. For some offers it doesn't work. For some it works better than search. Just because it's not search does not mean it's not an incredibly valuable marketing channel.
They will never be as profitable as Google because the CTR of the ads is pathetically low (compared to search) and the clicks are much less valuable, but there is massive traffic there. Even if they never develop the killer ad product there is still a big business there.
My belief is that with straight up direct ad sales and limited targeting ads, MySpace cleared $1B this year. That's the potential upper limit of how much Facebook can make with just straight up ad sales.
But having a much more complete understanding of relationships, Facebook wants to find something more effective and profitable than AdSense. That's what Mark Zuckerberg really pitched to everyone that has invested into Facebook: his team's ability to reinvent online advertising.
The products they have so far -- Beacon, Social Ads -- are kind of lame but Facebook Connect is getting pretty big and they have quite a lot of money and time to work on it.
But all this doesn't matter. Facebook isn't profitable! And somehow this affects hackers around the world.
I doubt that, cleared tends to means profit, not revenue, how much did they actually make after all the expenses were paid?
That means they are still losing money. It doesn't matter if they have $1B in revenue, if it costs them $1.1B to operate, things are not sustainable.
It's fine if you think they're going to fail in their bid to take over the world -- I'm undecided, personally -- but it's silly to claim that they're "unprofitable" without acknowledging that they could be if that was their goal (or refuting that point).
But you do the exact opposite. You are claiming that they could be profitable but you don't back it up. I'm not saying you are wrong, just that you haven't flushed out your point at all.
I too could say that General Motors could be profitable, they'd just have to stop paying pensions, salaries and leases on equipment.
So the question to you is how can Facebook be profitable if they pay out more than they take in?
The problem is that Facebook thinks its Google...when it is not. This is why they spend so much cash trying to hire a ton of people. Just to make people think they are bigger than they are.
What they are forgetting is that Google was profitable before they started hiring people left and right.
Facebook is interesting in the event that any of its concepts around creating value really manage to take off. The concept of an open platform for app development could provide a model for next-gen end-user computing (barring net neutrality issues and the tubes getting clogged, etc.). Also, the virtual goods being exchanged on facebook and other online communities make up a billion dollar industry (http://www.marketingvox.com/virtual-goods-make-for-billion-d...).
a) nothing prevents you from re-adding those friends b) let's see you offer $12 for someone to stay off facebook forever.
For me, the value of Facebook is 0