41–50 of 58 posts
His assertion's that it isn't investment making it a ponzi scheme, it's their customers who purchase advertising on facebook and see minimal returns.
Earlier quoted context omitted.
yes possible that people will jump ship for the next coolest thing. will everyones moms, dads and grandparents really want to "recreate" their social network and learn a new platform though? facebook is unique as they are the biggest game in the world with people's real names and real social connections.
As the consumers become more tech-savvy (old dogs can learn new tricks) and technologies become easier to use, it will be easier for them to switch service. All it takes is the influential people to move (think celebrities, popular friend, active family member, etc) for the others to follow.
Facebook? What about Youtube then? http://www.internetevolution.com/author.asp?section_id=715&#... Reality is Yahoo wasn't going to make revenue after time, FB and YT probably will.
True, Youtube is also questionable. BUT, Youtube got bought by Google, and Google does generate massive revenue, so it's a different story.
I don't work for Facebook and have no inside knowledge, but here's what I think. It helps to step back and take a look at the big picture. Companies have a certain number of advertising dollars. Companies that are really big in the consumer space spend large chunks of their revenue on advertising: consumer goods (soap, etc.), durables, autos, pharma, etc. This money is not going away anytime soon. Now, if you're an a…
The idea that facebook knows alot about me is somewhat scary :/
The problem I see is, people don't come on facebook to find stuff, they come to checkout what their friends are doing.
According to this link http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme, the ad revenue is coming from people "experimenting" with FB Ads. Soon they'll all realize that it doesn't work, and stop.
Same question from a different angle in a blog post from back in August - http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme
If the only source of revenue is really as he says just people experimenting with FB Ads, realizing it doesn't working, then leaving, then it is indeed like a Ponzi scheme.
I don't work for Facebook and have no inside knowledge, but here's what I think. It helps to step back and take a look at the big picture. Companies have a certain number of advertising dollars. Companies that are really big in the consumer space spend large chunks of their revenue on advertising: consumer goods (soap, etc.), durables, autos, pharma, etc. This money is not going away anytime soon. Now, if you're an a…
Thanks! That's a very well thought out argument :) The idea that facebook knows alot about me is somewhat scary :/ The problem I see is, people don't come on facebook to find stuff, they come to checkout what their friends are doing. According to this link http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme , the ad revenue is coming from people "experimenting" with FB Ads. Soon they'll all realize that it doe…
Somebody correct me if I'm wrong, but I've generally heard that CTR on FB ads is terrible. According to the logic above you should be getting 10x as many clicks because you are paying 10x as much, but advertisers aren't seeing anywhere near this ROI.
It's like a bunch of salespeople coming to a party that's been running for 10 years and trying to push sales onto people; sure, you might hook a few, but people are there to party and not to spend money on your junk.
The only way I can see them leveraging what they have a real advantage in, is by using the social graph to promote products to people's friends. That's kind of what Yelp does; you're more likely to spend money on things/places your friends recommend. The problem is that FB has done this before, it was called Beacon, and it was creepy. They are late to the game with Places, and they are getting so much cash from corporations for sponsored Pages that I don't think anybody uses them to judge actual value of a product.
You may bot be asking the right question..
It snot as a whole is facebook making a profit??
The right question is have advertisers found out where the ads on FB work the best and is that revenue growing?
The ads are working the best in games such as Zynga's as the ad can better targeted to engage viewer...
Has FB made a profit yet form advertisers using in-game ads, etc on fb's game/app platforms?
We do not know yet as they are still a private company with no breakouts in revenue to answer that question.
And comparing Zynga to Fb only gives a micro picture not a whole one..
But, it only works if FB can keep its users and community bases(users, developers, advertisers) there on the FB platform. If we see a sudden decrease as in Digg than it is a ponzi scheme..
"Not because of revenue they're actually making"? HUH?! Estimates for 2010 are 1-2 BILLION in revenue for Facebook. Fueling this revenue are companies like Zynga and Groupon - hardly bubbly companies... These guys are making real/sustainable revenue. Facebook is smack dab in the middle of social gaming and stands to be the AppStore of that world (WIN). Their targeting marketing has proven to be a huge driver of compa…
Earlier quoted context omitted.
@blantoni: You can find Facebook data center cost data here: http://www.datacenterknowledge.com/archives/2010/09/16/faceb... You'd have to 10X those costs (to $500M/yr), plus assume a 250% overhead (another $500M) on top of your $200M salary and benefits figure for Facebook to be in the red. Calling that plausible would seem a bit of a stretch.
Did you actually read that article? That is lease cost for their data centers (in 2009 no less). That's basically just paying the rent on their data centers. That doesn't include a 200 million dollar data center project to be built in Pineville, OR. And that does not include infrastructure, bandwidth, software, hardware maintenance etc. Let's face it, Facebook does not sell a product. Their only current viable revenu…