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Phase 3: Profit

mattmaroon.com

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Re: Phase 3: Profit

#31

Post by mattmaroon »

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.

They'll have difficulty getting funding at some point in the future without a down round, which nobody wants.

Re: Phase 3: Profit

#32

Post by mattmaroon »

rhiltd wrote: post #30

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.

Because that's their market value based on recent investments.

Re: Phase 3: Profit

#33

Post by mattmaroon »

chaostheory wrote: post #29

I don't disagree with his main idea, but I really find it hard to believe that AIM and most cell phones are open platforms; though someone can prove me wrong.

I know of many apps not built by AOL that use AIM. Meebo, Trillian, Pidgin, Adium, etc. I don't think they meant it to be an open platform (until fairly recently) but it became one.

I meant the phone system. Individual cell phones are not necessarily platforms.

Re: Phase 3: Profit

#34

Post by mattmaroon »

aswanson wrote: post #25
SwellJoe wrote: post #11

Earlier quoted context omitted.

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.

Google did that for sure.

Re: Phase 3: Profit

#36

Post by mariorz »

mattmaroon wrote: post #33
chaostheory wrote: post #29

I don't disagree with his main idea, but I really find it hard to believe that AIM and most cell phones are open platforms; though someone can prove me wrong.

I know of many apps not built by AOL that use AIM. Meebo, Trillian, Pidgin, Adium, etc. I don't think they meant it to be an open platform (until fairly recently) but it became one. I meant the phone system. Individual cell phones are not necessarily platforms.

and how is the phone system an open plataform with regards to your "social graph"? and IM services?

Re: Phase 3: Profit

#37

Post by mariorz »

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…

who are these people that keep saying that Facebook is the next google? in what respect is it supposedly the next google? In that they are attracting a lot of talent? Then sure, I guess. In that they are, or will be, businesses of the same magnitude? not even Microsoft's FB valuation justifies that.

Also, and I'm not saying this justifies FB being worth 30x myspace (I don't know), but its very clear to me that in regards to innovation FB is the leader and the rest are playing catch-up at this point. I also doubt that without google's intervention myspace, hi5 or bebo would be able to catch up at all.

Re: Phase 3: Profit

#38

Post by shawndrost »

aswanson wrote: post #24
alex_c wrote: post #15

Earlier quoted context omitted.

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.

Brand advertising (most of traditional media ads) isn't measured in click throughs, isn't any easier to measure on the web than elsewhere, and can't be dismissed without evidence.

Re: Phase 3: Profit

#39

Post by boucher »

okeumeni wrote: post #4

The difference between Facebook and Google is Technology, the value of goods is define by its availability/scarcity. There's nothing spectacular about Facebook technology, Fame alone is not enough to justify those billions if you don't think so let see when they go public.

Facebook's technology is not as impressive as Google's for sure, but they actually do have some fairly impressive technology. For one thing, they process a huge amount of data on a daily basis (I want to say I was told over a trillion "news items" per day, but I don't remember for sure). Admittedly the site has slowed a bit in the last couple months, but not significantly.

Re: Phase 3: Profit

#40

Post by tonystubblebine »

mattmaroon wrote: post #32
rhiltd wrote: post #30

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.

Because that's their market value based on recent investments.

I've never understood if the $15B valuation is real either (although I understand that it's quoted by everyone as being real). The original $15B number comes from an investment that Microsoft did for a share of the company plus advertising consideration.

If you just valued the company on the share then it would be worth $15B but since there were other considerations you can't know at all what the valuation was.

I've heard of follow-on investments but I never heard any hard facts about the valuation of those investments.

On the other hand, I've heard people who should know (actual VCs, TechCrunch, press) say FB has a $15B valuation. I just don't understand how that's the case. Is it bogus or what is the piece of information that I'm missing?

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