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Thread: Facebook floating

  1. #1
    Guest Clouder_sx's Avatar
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    Facebook floating

    So, Facebook floating as of an hour ago, apparently worth $100bn but I agree with the press, I'm not sure how it can continue to generate revenue without putting ads all over your mobile facebook app - would look awful!

    Live share: https://www.google.co.uk/finance?chd...ntsp=0&fct=big

    Rising still madness really. I envy Mr Zuckerburg

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    Trade Rep & Great Guy Clint's Avatar
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    It's insane all right. Facebook have the unique advantage of having the majority of their user base between the ages of 12 - 18, and also being an open forum for advertising, making it an extremely attractive prospect to brands like Coca Cola, Pepsi etc, as it means they can advertise directly to their main target audience and it's all nice & legal.

    As clichéd as it sounds, the fact is, you get someone interested in your brand when they're young, they're far more likely to favour your brand for life.

    But yes, they're going to have to be extremely clever about how they go about all this new advertising, because if it gets too intrusive, people will go elsewhere.

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    Guest Jonny's Avatar
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    http://gizmodo.com/5911480/the-mark-...-youre-curious

    Zuckerberg is currently worth $19.24 BILLION dollars as I type this Not jealous at all

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    Guest Jonny's Avatar
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    As for facebook - it won't last as a long term investment. If you look at any of the web based companies from 10 years ago, nearly all of them are now on the ropes and virtually worthless...

    Yahoo, Altavista, Ask.com, Lycos, Friends Reunited, Myspace - they were all the big names worth a fortune in their time, and they've all been superceded by new 'big' things. The same is more than likely to happen to Facebook in a few years - already the usage statistics already say that people don't trust adverts on facebook and won't click through, which is a large component of their business model...

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    Trade Rep & Great Guy Clint's Avatar
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    That's true, remember years ago when everyone thought Myspace would be around for ever, and Bebo? The same will eventually happen to Facebook, as unlikely as it seems to the devotees. Something bigger & better will come along eventually. As for the advertising, I know I never click on ads, but a lot of companies rely on visual, if not subliminal advertising on social media, and a lot of times just seeing a logo enough is enough to sway your subconsious toward that particular brand. That's why I said, they're going have to be very clever about how they implement advertising. People don't like to think they are being manipulated in any way, but we are, every single day.

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    Guest Jonny's Avatar
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    On the plus side, Zuckerberg has lost $100M of net worth in the last 20 mins... Share price is pretty much the same as the initial price now, reckon it's going to completely tank?

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    Trade Rep & Great Guy Clint's Avatar
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    Wow. That didn't take long.

    I hope nobody ran out and pumped all their hard earned into FB shares

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    Guest Asht_200's Avatar
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    Quote Originally Posted by Jonny View Post
    As for facebook - it won't last as a long term investment. If you look at any of the web based companies from 10 years ago, nearly all of them are now on the ropes and virtually worthless...

    Yahoo, Altavista, Ask.com, Lycos, Friends Reunited, Myspace - they were all the big names worth a fortune in their time, and they've all been superceded by new 'big' things. The same is more than likely to happen to Facebook in a few years - already the usage statistics already say that people don't trust adverts on facebook and won't click through, which is a large component of their business model...
    Cough Amazon Cough

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    Guest Jonny's Avatar
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    Quote Originally Posted by AshT_200 View Post
    Cough Amazon Cough
    Amazon sells product though - they don't rely on advertising as their sole revenue stream... All of the examples above don't sell any 'physical' product...

    edit: If you look at Facebook, how is it worth $100bn? They have no stock, they have no tangible product - their business model relies on being a portal for serving targeted adverts. It's like the dot com bubble all over again...

    edit pt2: Facebook has just under a billion subscribers - so that means each of them is worth over $100, although they pay nothing to use the service, how is that sustainable?
    Last edited by Jonny; 18-05-2012 at 21:26.

  10. #10
    Trade Rep & Great Guy Clint's Avatar
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    Exactly. Their company is solely valued on potential revenue from advertising. They've basically just picked a number out of the air and said, there you go, that's what Facebook Inc is worth.

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    Guest Asht_200's Avatar
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    Quote Originally Posted by Jonny View Post
    Amazon sells product though - they don't rely on advertising as their sole revenue stream... All of the examples above don't sell any 'physical' product...

    edit: If you look at Facebook, how is it worth $100bn? They have no stock, they have no tangible product - their business model relies on being a portal for serving targeted adverts. It's like the dot com bubble all over again...

    edit pt2: Facebook has just under a billion subscribers - so that means each of them is worth over $100, although they pay nothing to use the service, how is that sustainable?
    Yes Amazon sell products, but your original comment didn't mention solely advertising revenue based companies.... Sorry just being pedantic - but if you want another example... Google - yes they may ship some products (technically they don't sell Android, it's given away) but their main source of revenue is advertising.....

    But I agree, FaceBook is hugely over valued at 100x price to earnings ratio (consider Apple is 13x)

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    Guest Jonny's Avatar
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    I should probably have been more specific and said 'new media' type ad-based web companies...

    Google will be the next big one to fall, IMHO - the reason they are desperately trying to diversify with Android, Chrome, Gmail and their other services is to drive 'stickiness' to their search services, which in turn drives their ad revenue - even they understand that their model won't last forever..

    Amazon were considered complete outsiders up until reasonably recently, they were not expected to turn a profit and go broke - I think they took 4 or 5 years until they actually made any money...

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    Guest weiner_patrol's Avatar
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    Well their shares are only slightly up from what they were valued at at the start. They will start looking for new ways to generate revenue by adding more ads. The more ads they add the less people will use it. It's a matter of how intrusive those ads get.

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    Can't tell the difference cleanhands's Avatar
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    Must admit I've not really been following this too closely, but it did seem like everyone was so busy being amazed that it was worth so much that nobody asked why it was.

    All it does for me is allow people who I've friended to keep the peace (work "mates") to send me shit I'm not interested in.
    Last edited by cleanhands; 19-05-2012 at 01:11.

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    Guest Quail's Avatar
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    Guys, the true value of Facebook isn't in ad revenue, it's in data collection!
    Last edited by Quail; 19-05-2012 at 01:46.

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    Guest R3K1355's Avatar
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    Either way I think this will be the high point of their value.

    To increase revenue they're either going to have to push more ads or harvest and sell more data, neither will please their user base and will put people off.
    Eventually people will start to leave, so they'll ratchet up the ads and data sales so more people will leave.
    Then investors will realise it's well overvalued, pull out all their money and the price will tank.

    Zuckerberg has made his money, he should sell off the remaining stock and go live the easy life now - that'd be the smart thing to do.

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    Guest ben8000's Avatar
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    Quote Originally Posted by Clint View Post
    Exactly. Their company is solely valued on potential revenue from advertising. They've basically just picked a number out of the air and said, there you go, that's what Facebook Inc is worth.
    The Dragons wont like that.

  18. #18
    Guest Asht_200's Avatar
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    Like I've said before the digital market is fickle...... however Apple and Google trying to control the smartphone market... the end goal is to control the ethos... You buy an iphone, you buy into the Apple way of doing everything.... You buy an Android Phone, you buy into the Google way of doing things...

    Facebook have 900 million users to preach their way of doing things - that's why they are so keen to get their own phone out there for starters - which platform rises to the challenge b(as they don't have their own OS) is anyone's game

    They know the majority of users access via phone now and that's where they lose revenue

  19. #19
    Guest Asht_200's Avatar
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    Quote Originally Posted by Clint View Post
    Exactly. Their company is solely valued on potential revenue from advertising. They've basically just picked a number out of the air and said, there you go, that's what Facebook Inc is worth.
    Just remember in 2007 these analysts who predicted the value of FaceBook are the same analysts who couldn't predict a global financial crisis....

    No one ever learns....

  20. #20
    Guest weiner_patrol's Avatar
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    lol judging by their mobile app...I wouldn't expect much from their mobile platform...

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