Why I'm not buying Facebook • Hacker News Board

Re: Why I'm not buying Facebook

#91

Post by bad_user » Wed, Jan 05, 2011, 8:00 AM UTC

lbrandy wrote: post #12

mynameishere wrote: post #10

Earlier quoted context omitted.

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…

Eh. Zynga is social games at scale. The engineering talent isn't in the games part, it's in the scale part. Getting to that scale isn't any easy feat either. What you've basically just said is that any idiot could clone facebook. Yes, they could. Except they still have everything to do.

World of Warcraft has 12 million subscribers.

Any idiot can clone Facebook, getting users to use Facebook was the hard part.

Scaling is vastly overrated. Yes it requires knowledge, but (a) you don't have to do it from the start (unless you're Blizzard and everything you do is an instant hit) and (b) users don't fucking care about your infrastructure that scales (that's not why they are playing your game).

Re: Why I'm not buying Facebook

#92

Post by Loic » Wed, Jan 05, 2011, 8:11 AM UTC

I do not have a FB account. You do not need FB to simply take benefit of the web at large. But you do need a good search engine.

For me, FB is the future Second Life. Making money now and hyped, but at the end, it will just be a simple good business, but not a stratospheric one.

Re: Why I'm not buying Facebook

#93

Post by pilif » Wed, Jan 05, 2011, 8:18 AM UTC

abstractbill wrote: post #72

draz wrote: post #70

Earlier quoted context omitted.

so why FB and not Twitter, for example? Is it the simplicity of having your photo album and messaging under the same platform?

Integration of photos, videos and messaging is definitely useful, as is the fact that all of our relatives have actually heard of facebook as opposed to twitter ;) I guess the other consideration is that facebook at least has some semblance of privacy, which is reassuring when posting photos and videos of someone too young to consent (or talk, for that matter).

Thank you for your remark in the second paragraph. I was beginning to think that I'm the only person on this planet concerned by all these "cute" baby pictures being posted publicly.

Pictures which the person on it will likely be really ashamed of in a few years.

Even though babies might look cute and you kinda might have "created" them, they are real people, not pets or lifeless objects.

The same as you can't post pictures of a random person without their consent, you really shouldn't post pictures of your child. Leave the posting of their baby pictures to them, once they are old enough.

Re: Why I'm not buying Facebook

#94

Post by patd » Wed, Jan 05, 2011, 9:06 AM UTC

"Reason 2 : Goldman has likely earned the lead book runner slot in any initial public offering."

When Microsoft valued Facebook at 15 billion, it was the same thing : they paid 240 million for 1.6% of the company AND running ads on Facebook (while excluding Google) AND some other things we may not know.

But people just said 1.6% for 240 million = 15 billion without taking other parts of the deal into account.

Re: Why I'm not buying Facebook

#95

Post by blader » Wed, Jan 05, 2011, 9:24 AM UTC

nas wrote: post #62

bemmu wrote: post #58

On 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 i…

"Games like Farmville are a fad, like Rubix cube and Cabbage Patch Kids."

Well, sure they're fads. But toys aren't a fad.

LOST might be a fad, but entertaining content aren't a fad.

Farmville might be a fad, but Zynga is in the content business, not the Farmville business.

Re: Why I'm not buying Facebook

#96

Post by borism » Wed, Jan 05, 2011, 9:32 AM UTC

Umalu wrote: post #15

portman wrote: post #9

Earlier quoted context omitted.

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 part…

The $88 billion market cap for Goldman Sachs is the value of all GS shares, including those held by insiders. So if you could buy $50 billion of GS shares at the current price, you'd own about 57% of the company.

So if you could buy $50 billion of GS shares at the current price, you'd own about 57% of the company.

could you? I think you'd have to offer a hefty premium over market price for GS...

Re: Why I'm not buying Facebook

#97

Post by tpatke » Wed, Jan 05, 2011, 9:33 AM UTC

Nobody has mentioned acquisition. I think it is safe to say that MSFT would be interested in FB at 50B. 100B starts to look like real money and it is hard to know who would be interested...

Re: Why I'm not buying Facebook

#98

Post by borism » Wed, Jan 05, 2011, 9:35 AM UTC

Swannie wrote: post #79

phreanix wrote: post #55

Earlier quoted context omitted.

Wait, let me get this straight. $2B in revenue is not 'sizeable' ?

Not in the grand scheme of things. Yahoo! Market Cap: 22B. Revenue: 6.5B. Employees: 13,900 Facebook valuation: 50B. Revenue: 2B. Employees: > 1,300 OK, so the costs of running Facebook from a pure employee point of view are smaller than Yahoo. And their cost for traffic is certainly lower (as the YHOO numbers include revenue distributed to ad carriers). But does the 2B revenue really justify a 50B valuation?

OK, so the costs of running Facebook from a pure employee point of view are smaller than Yahoo.

I wouldn't be so sure...

Re: Why I'm not buying Facebook

#99

Post by arethuza » Wed, Jan 05, 2011, 10:01 AM UTC

Loic wrote: post #92

I do not have a FB account. You do not need FB to simply take benefit of the web at large. But you do need a good search engine. For me, FB is the future Second Life. Making money now and hyped, but at the end, it will just be a simple good business, but not a stratospheric one.

I don't use FB either (although I do have an account).

However, my kids use it all the time and it's a vital part of their social life. I can sort of understand the valuation of FB - the people who use it regularly really depend on it and in a way that is much stickier than things like Google search.

The only thing that I can see that might hurt FB is if it becomes too popular and there is a mass switch by the "cool" people to use some other service - given that it is based on socializing rather than hard features this could well happen. However, I don't see any risk of this at the moment.

Re: Why I'm not buying Facebook

#100

Post by access_denied » Wed, Jan 05, 2011, 10:06 AM UTC

krschultz wrote: post #14

portman wrote: post #9

Earlier quoted context omitted.

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 part…

If I had $50 billion on this day to buy part of 1 company, I'd take Goldman no question. A few years ago if you got Facebook stock at a lower valuation, sure that would make you a lot of money. But if Facebook makes $2 billion now, and they already have 25% of the internet users as members, where does the growth come from? 50b valuation is right given their current revenues, but they're not going to go from 25% to 10…

> So we're basically betting on how much more money Facebook can squeeze out of each active user.

While I share your scepticism on a general basis, consider the possibilities of selling data to other companies. Yes, it doesn't help that FB has the company culture it has, but I can see the possibility of an array of businesses based on the FB data.