"The 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." GS was founded in 1869; Facebook in 2004.
[deleted]
Why I'm not buying Facebook
61–70 of 106 posts
Re: Why I'm not buying Facebook
#62On Zynga: You think they're going to justify a $50 billion market capitalization through banner ads? These games actually do really well, not from banner ads but from virtual currency. Now that FB is pushing devs to use FB credits, they should be in for a healthy cut of the action.
Games like Farmville are a fad, like Rubix cube and Cabbage Patch Kids. That's not to say that casual games won't continue to an important segment of gaming, just that they will not provide an income stream that justifies a 50 billion company valuation. If it wasn't for the fact that "the market can stay irrational longer than you can stay solvent", I would short a Facebook IPO in a heartbeat.
Facebook's core value is that (nearly) everyone is on it and it is considered to be "cool". The cool aspect will not last. I'd be amused to hear any arguments as to how it possibly can. Young people will move on to something else.
I also think it's very likely that their power as a centralized manager of personal contacts will be eroded over time. Really, it's not that hard of a problem and some other applications will end up being compelling enough for people to switch. They will try to prevent it (e.g. like trying to prevent GMail from exporting email addresses) but ultimately will fail.
The history of the Internet is filled with the corpses of technologies that were supposed to be "the future". Who remembers PointCast? How about Orkut? For a while RSS was touted as the solution to all of mankind's problems. ;-)
Re: Why I'm not buying Facebook
#63Facebook is very similar to vmware. I expect it would follow a similar path in stock price. Currently vmware is trading at 140 p/e ratio. People are afraid to miss the next Google, Microsoft, etc.. SO they are willing to buy the latest trend. If facebook made $2 a year off 300M users they would have a market cap of 60B with a 100 P/E ratio.
> People are afraid to miss the next Google, Microsoft, etc
Yup, and they don't realize that it's not a winning strategy. Of course I would love to get in on the "ground floor" of the next Microsoft or Intel. Unfortunately it's like trying to get rich by buying enough lottery tickets. Sure one of them is going to be a big winner but the EV of your investment is negative.
Re: Why I'm not buying Facebook
#64"And any advertiser who is trying to target me on the social network is wasting their money." He ruined a perfectly objective point with this subjective generalization. That being said, I'm with him for on most points, and I agree on the bigger picture.
The future of Facebook is not targeting you on 'a social network', its opening up an ad-sense competitor and targeting you on any website - with your personal information. The like and connect buttons are just the first step. With that in mind it sounds like a good deal to me.
So why would people want to be Facebook users? What value are they getting besides targeted ads?
I find it amusing to see people trying to imagine theoretical ways Facebook could earn income to justify their insane valuation. It is essentially the very definition of speculation. A prudent investor wouldn't touch that shit with a ten foot pole.
Re: Why I'm not buying Facebook
#65Earlier quoted context omitted.
The future of Facebook is not targeting you on 'a social network', its opening up an ad-sense competitor and targeting you on any website - with your personal information. The like and connect buttons are just the first step. With that in mind it sounds like a good deal to me.
I'm surprised how few people seem to see this opportunity. They should be able to grab a huge part of online advertising. Also, I have a feeling that a lot of big media would like to stick it to Google, and would rather get their ads from Facebook instead.
Considering their TOS for the graph data - summary don't use the data to target ads, its just a matter of time before they launch this.
Re: Why I'm not buying Facebook
#66I was an early adopter of Facebook back in the day it was only open to a handful of school (VERY early 2004). It was nice and exciting and whatnot. But I've lost interest in it completely. I speculate that it's only newcomers that find it interesting. I now use FB only as a means of sending someone a quick note, getting invitations to events (a la evite -- remember that?), or maybe looking up a picture I was tagged in by a friend. If back in the day people put in their hobbies, activities, interests, and list of classes (yup, that was available. Great stalking tool...!), I find people's profiles completely empty.
Anybody with a different experience? Do you ACTUALLY use FB, or are you only drawn to it because of the reasons I outlined above?
Please note that I'm not hating on FB. They do what they do well. Just sharing my experience (and at this point, I will never ever be able to get a job at FB... ;-) ).
Re: Why I'm not buying Facebook
#67"The 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." GS was founded in 1869; Facebook in 2004.
GS has sustained its business over 140 years, consistently making a lot of money. (Also we recently found they are now, in effect, insured by the US government in a way FB can only dream of)
Re: Why I'm not buying Facebook
#68I was an early adopter of Facebook back in the day it was only open to a handful of school (VERY early 2004). It was nice and exciting and whatnot. But I've lost interest in it completely . I speculate that it's only newcomers that find it interesting. I now use FB only as a means of sending someone a quick note, getting invitations to events (a la evite -- remember that?), or maybe looking up a picture I was tagged…
Do you ACTUALLY use FB?
Yes. It probably helps that my family, and my wife's family, are all several thousand miles away and we just had our first child. We spend a lot of time on both FB and Skype, keeping everyone up to date.
Re: Why I'm not buying Facebook
#69> Let's just say for argument's sake that it is early stage investors who are selling. Why would they sell? Because they're in need of cash to invest somewhere else? The way the social network is talked about these days, it's the best investment opportunity in town. So why would anyone want to forsake it?
What a silly argument.
Diversification. Duh.
Even if you've got a hold of what you're certain is the biggest, bestest, most badass-est investment ever that's already gone up 20x, you'd do well to cash out a bit of it and spread that around. On the off chance something crazy happens, you're not up the creek.
I mean, that's not exactly revolutionary right? Diversify? If I owned Facebook equity now, I'd really happily cash some of it in and invest in something as uncorrelated to FB as I possibly could. Like, real estate in Bulgaria or something.
Re: Why I'm not buying Facebook
#70I was an early adopter of Facebook back in the day it was only open to a handful of school (VERY early 2004). It was nice and exciting and whatnot. But I've lost interest in it completely . I speculate that it's only newcomers that find it interesting. I now use FB only as a means of sending someone a quick note, getting invitations to events (a la evite -- remember that?), or maybe looking up a picture I was tagged…
Do you ACTUALLY use FB? Yes. It probably helps that my family, and my wife's family, are all several thousand miles away and we just had our first child. We spend a lot of time on both FB and Skype, keeping everyone up to date.
so why FB and not Twitter, for example? Is it the simplicity of having your photo album and messaging under the same platform?