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Original post made
on May 18, 2012
Does anyone else see FaceBook as a passing fad?
It's hard to imagine so much value being placed on a company that doesn't build anything or add value to our lives. Maybe I'm wrong, but it seems unsustainable in the long run.
Woodsider, there area lot of people who feel as you do - there was just an article this week in a local paper about it.
For much of the community work that I do, I find Facebook very useful. As the world has changed, & certain professions commensurate w/that, people in those professions find FB useful. In my world, authors, nonprofits, scientists & small business owners use it a lot. But people are flexible & will move toward or shape a trend that works for them. Everyone thought Google+ would be the Next Big Thing, but that hasn't happened. I don't think it adds nothing of value, but it's hard to see the value for those who don't use it or who use it very little or who's concerns about privacy trump their inclination to use it. Jaron Lanier has some good things to say about not using FB, btw.
Meanwhile, as we think on this, Mark's having a big party, not paying his share of taxes & local realtors are rubbing their hands together in glee.
The problem is not that Facebook does or does not add value but that Facebook has no idea how to make money on that value. The shareholders, who have NO control of Facebook, simply have no way of making money on their investment except by selling their stock to someone who is even less aware of this lack of revenue.
Hmmmm, I am interested in reading the article you mentioned. Can post here which newspaper it ran in?
Regarding, Google, I think the Google Car that is out there cruising around driverless, is very cool technology and will be useful in improving our world on the roads.
Regarding Mark, how is he not paying his fair share of taxes? I know the cofounder Savrin(sp?) hightailed it for Singapore and many employees have set up residency in tax free Nevada.
Peter, you made an interesting point.
Woodsider, I'm sorry, but I didn't pay attention to what paper it was. It may have been a local daily, like the Post or Daily News.
Here's an article on the tax dodge: Web Link
Peter's point is right on. How many people click on Facebook ads, for example?
What Mr. Zuckerberg is doing is not a tax dodge. It is borrowing against an asset (his stock and stock options). It is no different that you borrowing against your house instead of selling it - which would trigger a taxable event.
This is done all the time. Morgan Stanley was the lead underwriter and part of their "pitch" to senior executives and directors is providing wealth management. The centerpiece of those plans generally involves diversification by using the person's stock or stock options as collateral so they can purchase other assets.
"It's hard to imagine so much value being placed on a company that doesn't build anything or add value to our lives."
There are now nearly a billion people who connect on Facebook. That's one person in seven. I'm not even sure there's another company on this earth (or has ever existed) who can make that claim!
Ask people who are now able to communicate with long lost friends and family or have connected with others with similar problems or interests if Facebook doesn't add value to their lives.
What a ridiculous value judgment. I'm sure there are things that you consume or do that others might think is of little value.
POGO, he's doing 2 tax dodges - 1 w/his company, 1 for himself. It's disgusting, but all too typical.
Most users between 13 and 25 log in every single day, according to published stats,
Enough people click on the ads to make FB fairly profitable. There's still room for improvement of course.
Value is marginable to me when most of the status updates are farmville scores, stupid rants, and increasingly ads. I hope they figure it out as teens and adults are fickle!
Personally, what FB has done to inflate the local real estate bubble makes me beyond irritated since we are trying to buy this year, but I can't blame it on them! Let's just say when towns add jobs, they need to also add housing units. Can't have one without the other.
Peter Carpenter said: "but that Facebook has no idea how to make money on that value".
Revenue last quarter a little over $1B, profit about 25% of that.
Still an incredibly high valuation, but they have revenue and profits.
Facebook has a P/E of 88.3 compared to Google's 18.2 and Apple's 12.9.
IMHO that clearly demonstrates " that Facebook has no idea how to make money on that value".
Facebook has a lot of plans to make money. Remember, Google didn't know how to make money either.
900 million people use FB and many spend more time on the site than watching television. Monetizing this asset is the key objective for FB executives. I have no doubt that Facebook will make money and a lot of it. And it won't be by having users click on banner advertising or playing Farmville.
Now whether it is truly worth $100 billion - or even be the first $1 trillion (market cap) company as some have predicted - that, no one can say. I will say that anyone who thinks FB is a fad underestimates their power.
Sounds like you invested in Facebook. How much did you lose today? It's good you're in for the long term.
Sorry, but I didn't invest in Facebook privately, in the IPO or in the after market.
POGO, sometimes we can agree.
FB's business modeling is open to criticism and conjecture. The company makes money now. Lots of money. More money than many companies. $4B in 2011. The pricing of the stock at IPO was ambitious and what you see is that it pushed the limits of the current valuation.
This was not a rejection of Facebook or its business/revenue model.
If anyone is gloating about a "failure" of FB, I give you $4B reasons against such a claim.
There are many brilliant people in MP and Atherton and PA who can and have helped companies create new revenue generating models. But Peter is not one of them.
Peter is a classic case of a mildly successful exec from a previous generation who has now claimed to be an expert social media revenue models as well as so many other subjects.
Why he did not create FB is beyond me.
FB is nothing but success. MP did well to negotiation and land them.
Shall I name the thousands of cities who would go crazy for such a partnership?
Based on the following 2 sentences in your post, nobody will give any respect or weight to your comments. You don't know what you are talking about in those 2 sentences, so why would anyone think you have know anything else you've discussed.
" Peter is a classic case of a mildly successful exec from a previous generation who has now claimed to be an expert social media revenue models as well as so many other subjects."
"Why he did not create FB is beyond me."
"POGO" - same goes for you in addressing a poster:
"What a ridiculous value judgment. I'm sure there are things that you consume or do that others might think is of little value"
You don't know that to be true of that person.
Save your vitriol for your facebook pages.
Thanks to the posters who are mature and civilized.
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