Why I'm not buying Facebook
finance.fortune.cnn.com
Why I'm not buying Facebook
1–10 of 106 posts
Re: Why I'm not buying Facebook
#2Reason #3 shows that the author does not understand even the basics of virtual goods and facebook platform monetization. The other points are nearly as non-sensical.
Re: Why I'm not buying Facebook
#3"And don't give me that crap about VCs being "early stage" and wanting to cash out of a "mature" investment. These people are as money hungry as any other institutional investor, and would let it ride unless….they saw something that suggested that the era of stupendous growth was over."
The author doesn't seem to understand how the venture asset class works.
Venture funds are owned by their limited partners (LPs), and typically have a fixed, 10-year life. After 10 years, the fund liquidates and the LPs (hopefully) get a nice return on their investment.
It's been 6.5 years since Facebook's first venture investments. If the investment vehicle was already 2-3 years old at that time, then they have to liquidate soon, even if the managing partners believe Facebook will continue to appreciate in value.
The author seems to think that anytime an investor wants to cash out, it's because they don't "believe" in the investment.
Re: Why I'm not buying Facebook
#4Reason #3 shows that the author does not understand even the basics of virtual goods and facebook platform monetization. The other points are nearly as non-sensical.
Please elaborate then, guy who works at Zynga.
Re: Why I'm not buying Facebook
#5The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week.
It's a fair point: if you had $50 billion lying around the place, which of the two would you choose to invest in?
Re: Why I'm not buying Facebook
#6Reason #3 shows that the author does not understand even the basics of virtual goods and facebook platform monetization. The other points are nearly as non-sensical.
Please elaborate then, guy who works at Zynga.
I'll take a crack at it. Here the author seems to be claiming that to remain popular and grow, Zynga and other Facebook-platform-users will need to have razor thin profit margins like Walmart in order to reach as many people with the lowest-common-denominator:
But here's the disconnect: if Facebook's future success depends on aiming for the lowest common denominator with the most people possible, that implies pretty slim margins a la Wal-Mart. You think they're going to justify a $50 billion market capitalization through banner ads? Are you kidding me?
How does selling virtual goods - which are all profit - relate at all to selling actual physical goods to consumers? Walmart drives the price down on what it sells based on it's huge presence in the market. This analogy barely makes any sense, and I have no idea what banner ads have to do with the comparison.
Frankly I would say that Reason #3 reveals that the author has a hard time making an argument in a concise or clear way.
Re: Why I'm not buying Facebook
#7The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week. It's a fair point: if you had $50 billion lying around the place, which of the two would you choose to invest in?
Seems like a merger would solve the whole problem.
Re: Why I'm not buying Facebook
#81. because this article is on CNN and our formula for getting visitors is to find a popular current event and take a controversial or contrary point of view on it.
2-5. see #1
Re: Why I'm not buying Facebook
#9The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week. It's a fair point: if you had $50 billion lying around the place, which of the two would you choose to invest in?
I remember when Goldman Sachs went public in 1999, only 12% of their shares went public. The remainder stayed with the partnership. I'm not sure (or able to quickly find) the current ownership, but it's certainly not ALL publicly traded.
So $50 billion would get you about one-fourteenth of Goldman. Not half.
Edit: grossly mis-remembered my facts. 511M shares include both stockholders and the shares of the former partners.
Re: Why I'm not buying Facebook
#10Earlier quoted context omitted.
Please elaborate then, guy who works at Zynga.
I'll take a crack at it. Here the author seems to be claiming that to remain popular and grow, Zynga and other Facebook-platform-users will need to have razor thin profit margins like Walmart in order to reach as many people with the lowest-common-denominator: But here's the disconnect: if Facebook's future success depends on aiming for the lowest common denominator with the most people possible, that implies pretty…
He's clearly talking about the software and not the "virtual goods". Zynga's games require all the engineering expertise required from WalMart's 2.99 gallon jars of pickles. Any other company that can deliver pickles in an acceptable way can get right into that market. By contrast, try making a WoW or Call of Duty clone. Huge, huge undertakings.
If you don't believe me, actually play some of Zynga's games. 50 percent of the random shit on Kongregate is better by far. The difference is marketing only.