I predict that FB will become the world’s biggest online poker site once the legalities are worked out. Good players will be drawn to it because of the huge numbers of weak players who convert from play money to real money games.
Profits will be huge and the stock price will skyrocket once the implementation becomes imminent.
Facebook slowly rolled out to college students over the course of a year, so unless you went to school in the Boston area, you likely wouldn’t have heard of it. High school were allowed to join a few months after that. It wasn’t until nearly three years after the launch that Facebook allowed everyone to join.
On the other hand, Google+ was open to everyone within three months.
If they can’t get people excited after nine months of being open to everyone, they never will.
I think that that’s a huge overstatement but so far, I agree, things aren’t promising.
Valid points, and like hajario said, things don’t look real promising. But I still think you need to give it more time before you can denounce it as dead. I can’t think of many web sites or services that exploded with success right from the outset.
Facebook had yet to hit me with an ad I’ve found relevant. Their favorite seems to be a dating agency for girls looking to marry for a US visa.
Here is where the reality check comes in for me.
At what point does potential revenue (from ads, demographics, etc) substitute for actual assets?
How does Facebook’s valuation exceed that of other corporations with real assets (there are many notables)?
Why is Facebook different from other short-lived competitors?
Basically, most online ads are for stupid people.
“No one in this world has ever lost money by underestimating the intelligence of the great masses of the plain people.” Henry Louis Mencken
I can’t be on my own in this but when I am on places like Facebook, at this point I don’t even see the ads.
Seriously, for every webpage you can think off, all those pictures along the top and down the sides they no longer register in my line of sight. I know they are ads, and I won’t ever be clicking them, so these days they might as well not be there.
So I laugh when I hear about targeted ads. They could be the most accurately targeted ads in history, as targeted ads go they could be goddamn works of art, they could be life changing in how targeted they are to me, and I still won’t be even looking at them* never mind clicking the damn things.
*(one exception: ads with pictures of big tits.)
Same here. They’re just a blur to me. I don’t think that I have ever even clicked on one, let alone bought something, ever.
I don’t doubt Facebook’s ability to become a long term, profitable business. They’re profitable now and with the right moves they can be consistently profitable. But the initial valuation was literally insane, it valued Facebook more than Amazon.com, which has millions of customers directly buying stuff from them every single hour of every single day.
Companies like Walgreens and 3M are “Dividend Aristocrats” meaning these are stocks which have paid a dividend every year for 25+ years, and have increased their payout each year as well. Both combined would be valued less than Facebook’s initial valuation. These are established companies with consistent revenues and income that provide consistent and predictable shareholder value. They have consistently grown their revenue. Facebook has basically had a year or two in which they were in the green, and their most recent numbers show declining profits in an unproven, highly volatile industry.
Facebook stock isn’t worthless, but Facebook was never a $100bn company and the investors who paid money thinking it was are why many people become rich in the market–because most investors are stupid.
I don’t think ads are the real asset at Facebook, it’s the database of users and their demographic information. Like Google, Facebook has a huge storehouse of information just waiting for someone to come along and find a use. For example, how are people responding to a new product that was released last week? Facebook and Google could harvest information, in different ways, that a business might be willing to pay for. Similar to credit reports, I think businesses would be very interested in getting their hands on individualized reports about taste and activities. Heck, that is probably going on now.
Selling people’s data can be lucrative. Not in a conspiracy theory kind of way, just in the normal way that it’s done.
Another problem for Facebook is that people are increasingly accessing it with mobile devices, which have much less real estate for ads.
As someone once said: “If you are not paying for it, you’re not the customer; you’re the product being sold.” (Cartoon version.)
They are collecting a lot of information about you and selling it. There is huge money in this and what people naively put on Facebook is gold. Albeit some of the data is sold to advertisers who then use it to target ads. But a lot goes to data aggregators and you don’t want to know what they do with that.
When I look at someone else using Facebook, I am amazed. There are all those ads there. For some magical reason (!), I never see any.
Story on slahsdot is that facebook is working on it’s own mobile phone.
Is this a good move? Can they compete in this arena?
It’s an interesting move that at first I thought was a bad move because of Apple and Android dominance and the competitiveness of the field. But they are apparently using Android and teaming up with HTC which means they aren’t trying to reinvent the wheel. Possibly they will create a device/ui that positions the user right at the center of their typical activities - boot up to facebook with integration to other key apps.
I kind of like this move actually, there is an opportunity to do it right and create something that is compelling to consumers.
This is a double fail. The economics of entry into the smart phone market is horrible. Look at the recent failures of Nokia, Ericcson (for a while), and RIM, for example. And these are established companies. (Apple, as usual, is an exception. They were already in the hardware business, with retail channels and most importantly, a rabid fan base.)
The market is already crowded with experienced players.
Facebook is a niche software company with no experience in making and distributing hardware. It is doomed to failure.
It is a double failure since it looks like they are going to buy Opera. Opera is the biggest mobile browser (which surprises a lot of people). This will kill Opera in the end. Which is a shame. I like it a lot. It’s the only browser that does tabs right.
It’s like AOL buying Netscape.
People keep looking at the insane profits Apple is making and think that that is the norm rather than the exception in the smart phone market. There’s only room for at most 1 big profit maker in this market. Facebook will not be it.
I initially had the same reaction, but when I saw they are using Android and HTC it seemed different for two reasons.
1 - Android is a working product, they don’t have to invest a ton of money to create this. They just have to “personalize” it to a facebook centric ui.
2 - HTC is one of the top mobile phone mfg’s. Again, Facebook doesn’t need to reinvent the wheel here, if they use HTC’s expertise properly this could be a relatively low investment/low risk move.
Why I think this can be different from the others you listed:
Nokia/Windows - There is nothing compelling here - it’s a “me too” situation with nothing to compel a consumer to purchase one of these over the two other platforms with all of the mindshare.
Ericcson - no opinion, I haven’t followed this company at all.
RIM - Previous reasons for Blackberry popularity are basically nullified and now it’s looking like game over.
Facebook - It could be (possibly) compelling to consumers to have a phone that boots up and is immediately right where they want to be (facebook) with other key apps tightly integrated so the experience, from a consumer standpoint, appears to be simpler and right where they want to be. Even if competing phones only require a click or a simple gesture to bring up facebook - to a consumer that one navigation action can (possibly) feel like it’s more work than the phone next to it that is just automatically right there.
Agreed. But it’s a constantly shifting landscape, I wouldn’t expect it to just remain static for very long.
This is not a compelling argument to me.
The wireless providers want competition and they don’t really care where it comes from - if facebook created a phone that the consumers found interesting the wireless companies would want to use it against Apple to drive better deals.
Regardless of how difficult it is to make money in that competitive environment, my point was that I think they have a possibility of creating something compelling to consumers (based on current popularity of facebook).
There aren’t too many companies in that position.
The notion is that you are betting on internetworking, whatever developments we see in that space will be led by facebook. If someone finally figures out how to make boatloads of cash off of this, then facebook will be ina position to get the lion’s share of that cash.
There is a lot of inertia to prevent active facebook users from moving from facebook to other sites. Of course most facebook users are not so invested in facebook that they would feel a sense of loss if their accounts were scrubbed clean and they had to start all over again.
IMHO, its like betting on internet news sites on the notion that someone will figure out how to monetize all the folks who get their news from the internet.
Well, then that’s how they should be targetting ads at you. Your page should be inundadted with links to porn sites and strip clubs.
Two points.
I agree that facebook has value but that the IPO was overpriced.
You seem to be of the opinion that the typical retail investor is stupid at the same time you think of seem to advocate eliminating pensions for self directed reitrement accounts in other threads.
Yeah and its not generating very much profit relative to the share price.
The typical retail investor is stupid. Have you read about the portion of baby boomers near retirement with no retirement savings. I don’t even mean the huge portion of them with massively underfunded retirement accounts, there is a sizable number of baby boomers with no savings for retirement.
Unfortunately I don’t believe traditional pension plans are/were sustainable, at least in their current incarnation. I favor market-based plans, but I’ve been saying I consider IRAs and 401ks to mostly be a failure now.
I think instead totally self-directed accounts should be like investing in a hedge fund, meaning only the wealthiest workers should have the option. Everyone else should have to invest in much more restrictive plans that have, for example, no option to take loans against the value of the plan and no option for early withdrawal aside from disability.
Pensions work just fine in countries that have sensible pension regulations. For example much of Europe requires pensions to be fully funded at levels that an annuity company would be willing to guarantee the benefits (indeed many pensions are run through annuity companies). The sort of funding levels we require allows for all sorts of outrageous assumptions. Folks used to make more conservative assumptions until the corporate raiders of teh 1980’s made having fat pension accounts like putting a target on your back.
