Quote from S2007S:
From what I have read, facebook is making money just like every other social networking company makes their money, ADS. I cant even recall the last time I clicked on an ad, anyway, in 2008 ads brought in about $300 million, in 2009 about $500 million and in 2010 around $800 million, now with over 600,000,000 people on facebook do people honestly think they can grow like they did the last 3 years, the answer is NO. Growth is peaking in how many users they have, they are not going to double or triple their growth rate the next year or 2, who knows if they ever will double their user base from the 600 million people they already have, I don't think its possible. There are 300 million people in the US and 600 million people on facebook I think everyone here in the US has signed up already. The only thing they can hope for is that the average user spend more time per day clicking through facebook pages.
Remember when myspace was growing at a huge pace well that ended as soon as it started, they have been losing users for a couple of years now, it will happen to facebook as well, who knows maybe by the time they go public they will have lost a couple of hundred million users, then what???? Maybe in years to come it will be cooler to tell people you dont have a facebook page. New trends always pop up and old ones forgotten, this will be the case with this trendy 2.0 website, the hype only last so long. There is probably a new website coming out by some 15 year old kid that will some how revolutionize the web in the next 5 years.
Quote from wutangfinancial:
GS will collect so much in fees over the years having facebook as a client, it doesn't really matter.
I mean, nobody can really say how this company will be doing in 15 years. I have a fair amount of knowledge regarding social media and there's so many variables I wouldn't bother making a prediction about their future revenues...
This company could be a steal at 50 billion. Their targeting could improve with the development of semantic algorithms that actually pull all the data off your profile. In that case, they could actually monetize their product more effectively than google, even though click through rates are abysmal at the moment. Not to mention facebook actually has more personal data than google and more traffic. In a best case scenario, they could easily be worth 200 billion plus.
On the other hand, they could run out of steam, run into conflicts with govts., lose trust from the public, and a stealthy competitor could change the face of social media. They could also simply take too long to figure out targeting-AI/semantic aglos are still a fantasy.
Again, its a worthwhile play for goldman eitherway.
ad increase is what killed myspace. Hell people make an uproar when they change the layout, think of adding one more ad. I also highly doubt that people will pay for games or apps/widgets. The profit of all these sites is based on low revenue per user and a high user base, scalping if you will.Quote from wutangfinancial:
No offense, but you don't really understand Facebook. You might be right regarding their overvaluation (see my previous post), but they could grow revenue a ton without increasing their number of users. They have yet to use any sort of targeting...the business end of the company is very much in its infancy. The model for these web 2.0 co's is to get traffic first, then monetize the traffic. They got the most traffic in the world. Thats not a trivial thing nor is it a fad that can just bust. They can hire the best talent to develop more sophisticated targeting to improve click through and conversion rates. They could literally improve revenue by 30X's without adding users.
Quote from S2007S:
Can I ask why people need to "check in" when entering a mall or restaurant, I need to know what the fascination is all about, why they need to tell people every fucking thing they are doing on a second to second basis. Why people post worthless posts of what they are eating or that there going to take a walk, are people really that pathetic that they need to tell people what they are doing. I'm hoping and yelling that this is just a trend that last another year or so because this is just a sad society we live in today.