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Ford vs Facebook

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Re: Ford vs Facebook

#21

Post by rabidsnail »

johnhartigun wrote: post #17
jwilliams wrote: post #14

Capital will ("should") flow to where it can be the most useful at producing wealth. This is just the market saying "I'd rather see what Facebook can do with X billion than Ford." Which on the face of it seems fair - Google had a similarly crazy PE when they floated. They grew into it pretty quickly though.

Investors don't invest because of curiosity. They want to earn money.

And the reason they're allowed to earn money is that their capital produces more value than it's worth. The only way that can happen in an efficient market is by taking risk. If you don't want any risk don't invest in the stock market.

Re: Ford vs Facebook

#22

Post by rjb »

johnhartigun wrote: post #17
jwilliams wrote: post #14

Capital will ("should") flow to where it can be the most useful at producing wealth. This is just the market saying "I'd rather see what Facebook can do with X billion than Ford." Which on the face of it seems fair - Google had a similarly crazy PE when they floated. They grew into it pretty quickly though.

Investors don't invest because of curiosity. They want to earn money.

Yes. Investors believe Facebook's value perception will catch up with its reality, since they are currently out of whack. They believe the current imbalance is in their favor. It's the only way to make money investing.

Re: Ford vs Facebook

#23

Post by rabidsnail »

Valuation lower than assets means you get eaten by corporate raiders, unless you're as big as Ford or the majority of the stock is held by a single family. That just shows how unhealthy Ford is.

Re: Ford vs Facebook

#25

Post by reinhardt »

tatsuke95 wrote: post #16
TazeTSchnitzel wrote: post #9

Earlier quoted context omitted.

The OED doesn't know your social connections, your sexual orientation, your date of birth, your address, your previous address, your current location, your gender, your age, your interests, your employer, all the websites you've visited or even what you look like.

So, they have good information for advertising. And that's going to valuable, no doubt... ...but that's it. They aren't building a physical product, they're going to sell other people's products. Or, sell information so that other people can sell other people's products. I find it absurd that the market for web based adverting, between Google and Facebook and others, can be this valuable in the long run. These are ad…

Ford is one of many car manufacturers, Facebook is a de facto monopoly when it comes to social networks.

Re: Ford vs Facebook

#26

Post by egknight »

tatsuke95 wrote: post #16
TazeTSchnitzel wrote: post #9

Earlier quoted context omitted.

The OED doesn't know your social connections, your sexual orientation, your date of birth, your address, your previous address, your current location, your gender, your age, your interests, your employer, all the websites you've visited or even what you look like.

So, they have good information for advertising. And that's going to valuable, no doubt... ...but that's it. They aren't building a physical product, they're going to sell other people's products. Or, sell information so that other people can sell other people's products. I find it absurd that the market for web based adverting, between Google and Facebook and others, can be this valuable in the long run. These are ad…

NBC Universal has done pretty well with an advertising funded business model, very valuable for a long time. Facebook does have a product. It is just intellectual, not physical. Also, they have good information, AND a stage to sell advertising. This is, and will continue to be, a killer combo that I would want my money in.

Re: Ford vs Facebook

#27

Post by jamesbritt »

reinhardt wrote: post #25
tatsuke95 wrote: post #16

Earlier quoted context omitted.

So, they have good information for advertising. And that's going to valuable, no doubt... ...but that's it. They aren't building a physical product, they're going to sell other people's products. Or, sell information so that other people can sell other people's products. I find it absurd that the market for web based adverting, between Google and Facebook and others, can be this valuable in the long run. These are ad…

Ford is one of many car manufacturers, Facebook is a de facto monopoly when it comes to social networks.

Facebook is a de facto monopoly when it comes to social networks.

Didn't that used to be true of MySpace?

Re: Ford vs Facebook

#28

Post by moocow01 »

TazeTSchnitzel wrote: post #5

Perhaps it's a bubble, but Facebook is used by an eighth of the people on the planet. Tell me that's not an asset. A single company has lots of information about and can display advertising to an eighth of the alive human race. Then again, so does Google, I suppose.

Its an asset but what is the value (in dollars and cents)?

Re: Ford vs Facebook

#29

Post by potatolicious »

vibrunazo wrote: post #19
forkandwait wrote: post #18

I am personally a lot more likely to log on to Facebook than to EVER buy a Ford -- just saying.

The point is that even tho you are logging to facebook, you are not paying them as much as those buying fords.

But we know that the auto industry is cut throat and low-margin. Paying $30K for a Ford doesn't mean Ford just made $30K. Between manufacturing, R&D, marketing, and raw customer acquisition cost (dealerships aren't free), I'd be surprised if Ford walked away with 5% of that.

Re: Ford vs Facebook

#30

Post by potatolicious »

jamesbritt wrote: post #27
reinhardt wrote: post #25

Earlier quoted context omitted.

Ford is one of many car manufacturers, Facebook is a de facto monopoly when it comes to social networks.

Facebook is a de facto monopoly when it comes to social networks. Didn't that used to be true of MySpace?

The difference is that Facebook is "threatened" by an intangible, hypothetical competitor who doesn't exist yet. Nor does the mechanism for defeating Facebook appear obvious or inevitable.

Whereas Ford faces very real, present competition in a market full of extremely competent players.

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