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Facebook is not worth $33 billion

37signals.com

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Re: Facebook is not worth $33 billion

#101

Post by elblanco »

mrtron wrote: post #50
spolsky wrote: post #5

I hate to leap in with what seems like an ad-hominem attack on the 37 signals, but their utter and complete misunderstanding of all the basics of business is starting to grate on me, and I'm wondering if it has anything to do with Chicago. Is the problem that they're sitting there in a city without any other Internet industry, stewing in their own witty ideas, listening only to the adoring comments they get from the…

Given fb's current position - would it not be incredibly stupid to NOT do everything possible to continue their growth and try to become more widespread as a necessary layer of the internet? Assume they want to continue growing. Growing both the number of total users and the number of places they grab the users' attention (mobile is the next natural play). Of course they would continue raising money and not worry abo…

Of course doubling their user base twice is something like 30% of the human species. I'm not sure that's realistic.

Re: Facebook is not worth $33 billion

#102

Post by rafski »

The 100 million for schools is a preemptive publicity stunt ahead of "The Social Network" film premiere next week.

It will be interesting to see how hundreds of millions of people seeing a film (on- and off- cinema screen) – supposedly depicting shady roots of their favourite website – will react.

Most likely, with a "meh…" but let's wait and see.

Re: Facebook is not worth $33 billion

#103

Post by raheemm »

iampims wrote: post #84
raheemm wrote: post #28

Earlier quoted context omitted.

What does Chicago have to do with FB valuation? KTHX. DHH makes a good point though - what are FB's profits/profit projections? No one knows. Assuming its $200M, how the hell can FB be worth $33B? That's all...

It could well be that "only" $200M in profits is the result of spending $$$ on R&D and product development (FB Questions, FB Places, FB Credits), which could lead to a massive amount of cash flowing in shortly. They've massively invested in infrastructure, which has certainly lowered profits. They could very well start benefiting from this as soon as next year. Without information, though, it's all speculation.

Without information, though, it's all speculation

Right - that's the point. The valuations are not based on actual profits or profit potentials but rather on speculation/hype, which means bubble, and when a bubble bursts, it ends up hurting the entire community.

Obviously, startup valuation is not a science. BUT when valuations are based on wild projections (such as FB will be be more profitable than Google), then someone must call it out.

Re: Facebook is not worth $33 billion

#104

Post by gamache »

corywilkerson wrote: post #75
spolsky wrote: post #5

I hate to leap in with what seems like an ad-hominem attack on the 37 signals, but their utter and complete misunderstanding of all the basics of business is starting to grate on me, and I'm wondering if it has anything to do with Chicago. Is the problem that they're sitting there in a city without any other Internet industry, stewing in their own witty ideas, listening only to the adoring comments they get from the…

The Chicago dig seems really, really unnecessary.

It's as valid as when people refer to the Valley as one big techie circle-jerk. Or as the most fertile technological environment in the world. Location, location, location.

Re: Facebook is not worth $33 billion

#106

Post by InclinedPlane »

The more interesting question is whether facebook will even be around in 5 or 10 years. Look at myspace, huge userbase, grew from almost nothing practically overnight, and relegated to the dust bin almost as fast once facebook came around. The chances of a competitor being able to do the same thing to facebook cannot be ruled out. Indeed, with facebook's api such a competitor would have an easier job of nabbing facebook users than was the case with myspace (join the new site, let the new site import your fb social graph and mirror your feed to facebook automatically up until the day you decide more of your friends are on the new site).

Re: Facebook is not worth $33 billion

#107

Post by irahul »

nadam wrote: post #94
irahul wrote: post #78

Earlier quoted context omitted.

Both of them have some insights worth pondering, but the attacks are kinda negatively overshadowing the discussion. Joel really shouldn't have started the Chicago hyperbole. Do they have some history or it's just impulsive?

They are competitors.

That alone shouldn't be reason enough and I would say both of them behaved very unreasonably if being competitors is all there is to it. I was asking more along the lines of previous altercations or confrontations.

I do remember some post from 37 signals commenting about Joel's taking investment; not sure if it was David or someone else though.

A very thin line divides frank and honest speech and rude and arrogant statements. Most of the internet celebs sit on the fence and cross it every now and then - Linus Torvalds (Open BSD devs are a bunch of masturbating monkeys), Zed Shaw(Rails is a ghetto) etc etc.

That being said, there always is a take-away as these people are one of the most hardworking and talented people in the industry but the sad thing is it makes it difficult for people not familiar with their style to neglect the firework and just consume the good parts(not that it would matter to any of them).

Re: Facebook is not worth $33 billion

#108

Post by blakeross »

Great job writing an article about other people's alleged delusions and then basing it on delusions of your own.

Facebook didn't raise a Series E from Elevation Partners; that firm purchased secondary shares.

Seriously, you can't ride in on a high horse of fact and reality and then get the basic tenets of your argument so wrong.

Re: Facebook is not worth $33 billion

#109

Post by [deleted] »

dhh wrote: post #76
spolsky wrote: post #41

Earlier quoted context omitted.

2. That's just not correct. Spend twenty minutes talking to anyone who trades in bonds or equity before you make assumptions about what liquidity you need to get a good price... it's not much. Facebook trades all the time on sharespost, certainly enough to be liquid and to reach a market price. Google itself only has a tiny fraction of the shares available to the public (10% if I remember correctly) and far less than…

Also, Sharepost currently has 3 positions for sale at valuations between 33 and 44 billion. The total outstanding shares for sale represent 0.001% at 44B. That's pretty close to the 0.000000001% that put our $100B valuation on paper: http://37signals.com/svn/posts/1941-press-release-37signals-... But hey, you better snatch these shares up quickly. It's rare that you get a chance to a clear shot at a company where "pr…

[deleted]

Re: Facebook is not worth $33 billion

#110

Post by [deleted] »

elblanco wrote: post #101
mrtron wrote: post #50

Earlier quoted context omitted.

Given fb's current position - would it not be incredibly stupid to NOT do everything possible to continue their growth and try to become more widespread as a necessary layer of the internet? Assume they want to continue growing. Growing both the number of total users and the number of places they grab the users' attention (mobile is the next natural play). Of course they would continue raising money and not worry abo…

Of course doubling their user base twice is something like 30% of the human species. I'm not sure that's realistic.

[deleted]
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