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Will Facebook become one of the most profitable companies in the world?

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Re: Will Facebook become one of the most profitable companies in the world?

#11

Post by olivercameron »

scottieh wrote: post #9
olivercameron wrote: post #6

Earlier quoted context omitted.

Why is it inevitable? They already run an ad network and their revenue's are nowhere near, for example, Google's. How else can they monetize this data?

They've barely scratched the surface. And it's not just an ad network... - virtual currency - daily deals - search integrated directly into the experience and that's just off the top of my head

Even with those three products, I still find it hard to believe they'd be one of the most profitable companies in the world. If you look at the top 50, it's filled with mainly oil companies, banks, and hardware producers (Microsoft being an exception). Google crept in at 47 due to AdSense, which I think Facebook could overtake.

I'm not saying Facebook cannot be wildly profitable, I just don't think it'll come close to the top 10 (what I'd consider to be "the most profitable companies in the world").

Re: Will Facebook become one of the most profitable companies in the world?

#12

Post by olivercameron »

marcamillion wrote: post #10
olivercameron wrote: post #8

Earlier quoted context omitted.

In the tech industry, maybe, but in the world?

Oh absolutely. Dropbox is reaching the point where now my father and mother use it. It hasn't reached Facebook levels yet (by that I mean, my grandmother ;)), but it is getting there. But with each incremental user, Dropbox's value increases in an e^x fashion. For more on why I think so, here is a more detailed breakdown: http://marcgayle.com/how-dropbox-is-printing-money There is no reason that Dropbox's growth will…

I hope it does like you say, it's an awesome product.

Re: Will Facebook become one of the most profitable companies in the world?

#14

Post by blhack »

marcamillion wrote: post #10
olivercameron wrote: post #8

Earlier quoted context omitted.

In the tech industry, maybe, but in the world?

Oh absolutely. Dropbox is reaching the point where now my father and mother use it. It hasn't reached Facebook levels yet (by that I mean, my grandmother ;)), but it is getting there. But with each incremental user, Dropbox's value increases in an e^x fashion. For more on why I think so, here is a more detailed breakdown: http://marcgayle.com/how-dropbox-is-printing-money There is no reason that Dropbox's growth will…

I don't think your parents are typical, honestly.

I bet if I surveyed my office, nobody here would have any clue what it was. Honestly, the only reason I use dropbox is that it makes getting photos off of my iPhone easy.

Re: Will Facebook become one of the most profitable companies in the world?

#16

Post by noelchurchill »

marcamillion wrote: post #7

One of the most profitable, perhaps...but I predict that if Dropbox stays independent - it will easily become the most profitable.

Dropbox adds little value to my life. Unless the company or technology evolves in ways I can't foresee, I would never pay for it.

Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.

Re: Will Facebook become one of the most profitable companies in the world?

#17

Post by sorbus »

noelchurchill wrote: post #16
marcamillion wrote: post #7

One of the most profitable, perhaps...but I predict that if Dropbox stays independent - it will easily become the most profitable.

Dropbox adds little value to my life. Unless the company or technology evolves in ways I can't foresee, I would never pay for it. Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.

Dropbox is a killer application if you have multiple computers or don't want to care about keeping backups. It's completely removed my need for flash drives, caring about which computer I have documents on, and so forth. I wouldn't underestimate that; I recall hearing that they've hit $100M/year in profits[1], and I expect that they've got quite a ways to grow. However, saying that they'll be the most profitable company in the world doesn't make sense to me - that would just take too much growth to be realistic.

For some context, the most profitable company in the world in 2010 was Gazprom[1], the largest exporter of natural gas in the world, with 24,555.7 million.

EDIT: Gazprom was the most profitable in 2009, not 2010, as pointed out below.

[1] http://www.businessinsider.com/dropbox-revenue-2011-3

[2] http://money.cnn.com/magazines/fortune/global500/2010/perfor...

Re: Will Facebook become one of the most profitable companies in the world?

#19

Post by marcamillion »

blhack wrote: post #14
marcamillion wrote: post #10

Earlier quoted context omitted.

Oh absolutely. Dropbox is reaching the point where now my father and mother use it. It hasn't reached Facebook levels yet (by that I mean, my grandmother ;)), but it is getting there. But with each incremental user, Dropbox's value increases in an e^x fashion. For more on why I think so, here is a more detailed breakdown: http://marcgayle.com/how-dropbox-is-printing-money There is no reason that Dropbox's growth will…

I don't think your parents are typical, honestly. I bet if I surveyed my office, nobody here would have any clue what it was. Honestly, the only reason I use dropbox is that it makes getting photos off of my iPhone easy.

Well they aren't especially tech-savvy, but I share files with them so they have it installed because of me.

My point is that at the rate at which it is growing, it literally is just a matter of time before all your coworkers and parents are using it.

It provides a peace of mind knowing that you can easily access your files - that is difficult to find elsewhere.

As technology continues to proliferate and more lives move online, people will likely use dropbox.

The more people that use Dropbox, is the more profitable they will be.

That is to say, their profit margins increase with the number of users they use - and that's not just because their unit costs decrease.

It's much more than that.

Re: Will Facebook become one of the most profitable companies in the world?

#20

Post by marcamillion »

sorbus wrote: post #17
noelchurchill wrote: post #16

Earlier quoted context omitted.

Dropbox adds little value to my life. Unless the company or technology evolves in ways I can't foresee, I would never pay for it. Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.

Dropbox is a killer application if you have multiple computers or don't want to care about keeping backups. It's completely removed my need for flash drives, caring about which computer I have documents on, and so forth. I wouldn't underestimate that; I recall hearing that they've hit $100M/year in profits[1], and I expect that they've got quite a ways to grow. However, saying that they'll be the most profitable comp…

This is not something that will happen over night. You meant to say that Gazprom was the most profitable in 2009.

Exxon did $30B profit in 2010. - http://www.google.com/finance?q=NYSE:XOM&fstype=ii

Exxon did $30B profit on $375B revenues. Net profit margins of less than 10%.

Of course we won't know until Dropbox releases their financials, but I strongly believe that they will be a bombshell when they are released. Nothing like anything we have ever witnessed.

I would not be surprised if their Net Profit margins are 30% - 50%.

At those rates, all it takes is for them to be doing revenues of $100B to exceed Exxon's profit take in 2010.

I know it seems a bit far fetched now, but so did every other technology giant when they were in the budding phases.

I think it would be foolhardy to bet against them.

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