101–110 of 204 posts
Note incidentally that I'm talking about the performance of the IPO, not the performance of Facebook itself. I think Facebook as a company is in a strong position. The problem is simply that Mr. Market ( http://en.wikipedia.org/wiki/The_Intelligent_Investor ) doesn't think so at the moment.
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Yes. Wall Street grades Facebook by drawing lines through dots of revenues and margins. The more accurate way to view Facebook is as a powerful coil that can spring in multiple directions. (I say this as someone who questions whether Facebook is a positive force on the web).
This is a cryptic comment. Yes, Wall St views Facebook as a powerful coil, but no one knows if it is compressed or stretched, but it certainly is. All it takes is for Facebook to go from $4 a user/yr to $8, or for teenagers to say "email me, I don't check facebook often". A powerful coil indeed.
Facebook exists because I would not like 500 friends to email me every day about their photos or jokes. That sort of thing doesn't scale well with emails.
Note incidentally that I'm talking about the performance of the IPO, not the performance of Facebook itself. I think Facebook as a company is in a strong position. The problem is simply that Mr. Market ( http://en.wikipedia.org/wiki/The_Intelligent_Investor ) doesn't think so at the moment.
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Changes to Facebook are like fluctuations in gas prices though. People grumble and complain, then just go ahead and don't change their habit. I'm pretty conspiracy-theorish on the whole Facebook thing. A part of me wants to believe Mark managed to hack the entire system. He got the maximum amount of money out of the IPO to build up a huge cash reserve for his company. He made his big acquisition before the IPO; futur…
>Changes to Facebook are like fluctuations in gas prices though. People grumble and complain, then just go ahead and don't change their habit. IMO, its like this. We spend a lot of time here on HN. Just like a whole lot more people do on Facebook. But we come to HN for a specific purpose to engage in these kind of discussions. Just like it will be difficult for PG to convert this into something else which makes more…
Even Google knows that's dangerous.
When I saw PG's email, I thought this was a self-fulfilling prophesy, even if it was only seen by YC founders. But now that every has seen it - it will be in Forbes and TechCrunch soon no doubt - it seems almost certain. If just YC founders see it, then they'll take less money, and get lower valuations, etc, leading the tone of the valley. But if everyone sees it, investors will close their wallets, people will decla…
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> I think Facebook as a company is in a strong position. Just curious, but I'd like to hear your opinion on why this is the case, vs all the naysayers that are betting against the company now. Do you have any specific point you find that Facebook can leverage to maintain success?
I don't think they've even tried to make money yet. They've just been focusing on growth. But they have so many users now that they could do whatever they want. Ideas that would entail a chicken and egg problem for anyone starting from scratch (e.g. marketplaces) do not for them. Plus Mark himself is such a fearsomely effective person. And so young; he's only a little older now than Larry and Sergey were when they st…
You're right that they haven't tried to make money yet. I once raged to a friend at Google that Facebook's use of ads displayed an utter lack of creativity or seriousness about building a business. (I also argued that Google should not try to tackle Facebook on its home turf, but if it really wanted to attack it head-on, it would need to build a destination site instead of merely "socializing" all their products. Sadly, that destination site turned out to be G+, and then they used it to socialize their products.)
There are two Facebooks. One is an identity service, built on a noisy social graph accreted over the years, which Zuckerburg is hoping to make as fundamental as DNS for the modern non-anonymized web. The other is a micro-blogging and photo sharing site on top of that identity service. Both are going to be hard to make money with.
It is really difficult to directly monetize the core identity service. They can attempt to provide the service as a bona fide piece of Internet technology (e.g. opening up retail locations to verify accounts in-person, or by partnering with wireless providers that sell their eventual phone), but then governments and others will get into the act and require open API access to the user information and graph data. As soon as that happens, they've given out their crown jewels.
Any other mechanism for monetizing the identity service is tantamount to providing advertising on the back of your driver's license, or making your social security card into a frequent-diner loyalty card. People won't like it, privacy advocates and anti-corporate doomsayers will have a field day, and governments will start interfering with their core tech. (A good strategy for Google might be to work on a stealth, open-ID based "Plan B" to have in their back pocket, for the day if/when Facebook does shoot itself in this foot like this. They've certainly screwed the privacy pooch before.)
And as for the other half of Facebook, they are in a crowded, fickle space, and their offering there isn't actually that great (and I say that as a user and a technologist). Twitter, Pinterest, and a host of small startups are very real threats. Mark paid $1B to keep Instagram from Twitter and maybe Google; how many more of those can he afford? Furthermore, Apple has enough cash in the bank to buy two Facebooks, even at its massively inflated P/E, and its gaming platform is tied to a much broader, more sustainable group of customers than Zynga's "whales". I've personally spent over $100 on iOS games - and barely noticed that that was the case. It was easy, casual, natural, and I will probably continue to dump more money into the iOS ecosystem, because it works great. I've spent exactly $1.98 to buy two Zynga games, mostly to get rid of the annoying ads, and I've stopped playing both.
Lastly, Amazon, whose customer profiles include credit cards and addresses, and whose social information is tied in to actual purchasing intent, has yet to reveal the punchline in its Kindle strategy. Just as 'selling books' was not the ultimate purpose of the company, I am fairly certain that 'reading books' is not the ultimate purpose of the Kindle. One concept: A Kindle fire with a barcode scanner turns every single aisle in every brick & mortar store in the country (with 3G signal) into a showroom for Amazon. Add passive background RFID scanning as the user walks the aisles, and it's a brave new world of retail.
TLDR: Mark is a smart and capable guy, now backed with fresh cash, but he's got to apply some creative thinking to demonstrate that he can actually milk his cash cow. His worst case scenario is to become basically Verisign, and I have not seen them demonstrate any new thinking to suggest this will not be the case.
When I saw PG's email, I thought this was a self-fulfilling prophesy, even if it was only seen by YC founders. But now that every has seen it - it will be in Forbes and TechCrunch soon no doubt - it seems almost certain. If just YC founders see it, then they'll take less money, and get lower valuations, etc, leading the tone of the valley. But if everyone sees it, investors will close their wallets, people will decla…
Only the Social Network bubble is popped -- which is the majority of companies that YCombinator funds. Social network websites that can be built in 3 months and have zero paying customers or any potential profitability really shouldn't have existed in the first place.
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But I think, its now going to be all the more tough for them to figure out how to improve their ARPU dramatically, as they don't have the benefit of obscurity. For example, even slight change to the feeds, like inserting what vaguely seems like an Ad, raises a huge uproar from people. In contrast Google had got Adwords figured out (but it was not as widely known) before their IPO.
Many ebay users also use FB. And a lot of FB users use Paypal. Think about it. Ads, movies, music, even games aren't really what will help then make huge amounts of money. Transactions will.
Let me take just take one example of 'movies' from your sentence. Would you think of Youtube or Facebook as a natural choice for watching paid videos/movies?
Likewise, IMO, there will be specific things for specific purposes.
I will proffer that the specific purpose for FB usage are things like vanity and managing one's image (how one wants to be seen in their social circle).
Recently I am seeing some 'xyz watched some on Social cam' kind of statuses on FB, of some xyzs who I am sure have not noticed such broadcast to their friends. These kind of mistakes, might just result in some very embarrassed and angry people.
(Am I the only one scared of clicking on anything, on any web page on the Internet, that is wrapped in 'Facebook blue' ?)
I believe the privacy concerns of these kind are going to spread to a wider base of people.
Edit: rephrase
I read this with a heavy heart, especially after working at Facebook before my current startup. Facebook is an amazing company with some of the best people in Silicon Valley working to make Facebook a once-in-a-generation company. But if Google debuted at $25b, and grew into a $200b company, how can Facebook grow by a similar multiple starting at a $100b valuation? In my opinion, opening at $38/share sucked all the o…
In 2004 Google Maps didn't exist. Android was an independent entity. The Google server farms were still few and far between. It was a search-based advertising company and nothing more. You could argue they're still fundamentally the same, but that's just because they have a rock-solid foundation to expand from.
Facebook in 2020 could be a completely different company and who knows, maybe a $500B one.