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Phase 3: Profit

mattmaroon.com

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Re: Phase 3: Profit

#21

Post by run4yourlives »

alex_c wrote: post #15
run4yourlives wrote: post #2

The biggest problem with facebook, imo. All the lovers will come and razz Matt and this comment, but none of them will be able to provide any evidence that facebook is doing anything but spending capital.

My suspicion is that Facebook will have to change how online advertising works, or die. Look at Compete data: average stay of 15 minutes * 350 million visits/month = 87.5 million hours / month in the US. That is coupled with decent demographic data and ability to target. How much would that much attention be worth in TV or newspaper advertising? A lot more than Facebook is currently getting, I suspect. If it can conv…

That's a good point, but those players will want fb to adopt big msn style flash ads. I'm not sure fb's users will go for that now.

I think they're going to have to look at membership or some other direct charge to users, and that's going to really affect that inflated valuation.

Re: Phase 3: Profit

#22

Post by cstejerean »

Goladus wrote: post #19
cglee wrote: post #6

One easy way for them to make money is to charge some nominal fee (say $15/yr) for premium services or ad-free experience. I don't use facebook myself, but most of my friends do, and most of them would gladly pay a small fee to just keep using facebook as is, nevermind premium features. Mining the social graph is the holy grail of social networks, but facebook, with its millions of addicted users, doesn't have to sol…

Facebook is a bit sticky, but switching is not as hard as you might think. If I had to dump facebook, I could probably rebuild my network (as much as I really cared about) pretty quickly starting with just a couple of phone numbers and emails.

Try deleting your Facebook account and see how much effort it takes. If you're lucky (and the trick that I worked still works) it might be about an hour. Otherwise it might take you days (hint: you have to delete every single photo, comment, wall post, friend, etc one by one and then contact Facebook to have your account deleted).

Re: Phase 3: Profit

#24

Post by aswanson »

alex_c wrote: post #15
run4yourlives wrote: post #2

The biggest problem with facebook, imo. All the lovers will come and razz Matt and this comment, but none of them will be able to provide any evidence that facebook is doing anything but spending capital.

My suspicion is that Facebook will have to change how online advertising works, or die. Look at Compete data: average stay of 15 minutes * 350 million visits/month = 87.5 million hours / month in the US. That is coupled with decent demographic data and ability to target. How much would that much attention be worth in TV or newspaper advertising? A lot more than Facebook is currently getting, I suspect. If it can conv…

They can convince major brands to advertise there. The problem is, unlike traditional media ads, web based advertisers can quantify how much bang for their buck they are getting (click throughs, etc).

Turns out that blanket, weakly-targeted advertising just doesn't perform that well, and companies get explicit feedback from these networks on just how bad the typical ad really is in terms of ROI.

Re: Phase 3: Profit

#25

Post by aswanson »

SwellJoe wrote: post #11
Mistone wrote: post #7

so many fb haters - yet they keep growing users, keep launching features, you can say they have no tech (baseless), they can't monetize (eer ask pg about this one; build something people want - a business model will emerge) and all the rest - yet you can say nothing about their growth and engagement.

Matt's not saying they aren't getting a lot of traffic, or that a lot of people don't enjoy using Facebook (nobody in their right mind would claim those things). Matt's saying that it's a rare form of chutzpah that Zuckerberg possesses that allows him to make up stuff like "the social graph" as justification for his second-place social network being worth 30 times the first-place social network (he's also saying some…

Facebook is not the next google for the simple fact that everyone is saying that it is. The Next Big Thing usually slips under the radar until it becomes completely dominant.

Re: Phase 3: Profit

#26

Post by neilc »

run4yourlives wrote: post #12
Mistone wrote: post #8

Earlier quoted context omitted.

how about growing users?..hmm thats seems like a valuable way to spend your time if your a consumer web company.

When you have over "65 billion page views per month", you don't need to focus on more users. You need to focus on getting paid. Fast. EDIT: In other words: if Money In - Money Out > 0: Success if Money In - Money Out The number of users doesn't matter.

Why does Facebook need to focus on "getting paid. Fast."? It's not like they have any difficulty getting funding. Obviously they need to figure out how to make money in the long run, but it's not like they're going to run out of cash any time soon.

Re: Phase 3: Profit

#27

Post by Goladus »

cstejerean wrote: post #22
Goladus wrote: post #19

Earlier quoted context omitted.

Facebook is a bit sticky, but switching is not as hard as you might think. If I had to dump facebook, I could probably rebuild my network (as much as I really cared about) pretty quickly starting with just a couple of phone numbers and emails.

Try deleting your Facebook account and see how much effort it takes. If you're lucky (and the trick that I worked still works) it might be about an hour. Otherwise it might take you days (hint: you have to delete every single photo, comment, wall post, friend, etc one by one and then contact Facebook to have your account deleted).

You don't have to delete the account to stop using it.

Re: Phase 3: Profit

#28

Post by run4yourlives »

neilc wrote: post #26
run4yourlives wrote: post #12

Earlier quoted context omitted.

When you have over "65 billion page views per month", you don't need to focus on more users. You need to focus on getting paid. Fast. EDIT: In other words: if Money In - Money Out > 0: Success if Money In - Money Out The number of users doesn't matter.

Why does Facebook need to focus on "getting paid. Fast."? It's not like they have any difficulty getting funding. Obviously they need to figure out how to make money in the long run , but it's not like they're going to run out of cash any time soon.

I get your point, but given the current economic climate and the understanding that the you can't predict when "the cat'll be out of the bag" in terms of when the valley realizes they're living on funding, the faster they find a way to bring in revenue, the better it is for them.

Re: Phase 3: Profit

#30

Post by rhiltd »

Why do people keep repeating that FB is 'worth' $15 Billion?

Is it an American thing for self-delusions?

FB as a business has the same credibility as a Washington Mutual AAA rated CDO.

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