Facebook apps and ads appeal to a market very far away from us tech guys so it can be hard to think of how it works. Think of things as random as bored at home fat housewives and Swedish people as your money makers. Also facebook ads can be hyper local, because people in facebook tend to actually put accurate information in! Imagine local businesses and organizations advertising their cancer runs, concerts or what not.
Facebook rejects funding at $4 billion valuation, may not raise more
11–20 of 28 posts
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#12Earlier quoted context omitted.
What are they making money off? I have never heard of anyone clicking an ad on facebook. (conversely I have met few Internet users who have NOT clicked a Google ad) They could be selling data/information. If so, I hope it's anonymized.
I'd tell you what I'm getting insane clickthrough on, but I don't want the competition, thanks. Some ads target REALLY well.
Well, without even a general idea of what you mean by "some" that information is not very useful.
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#13Earlier quoted context omitted.
What are they making money off? I have never heard of anyone clicking an ad on facebook. (conversely I have met few Internet users who have NOT clicked a Google ad) They could be selling data/information. If so, I hope it's anonymized.
I'd tell you what I'm getting insane clickthrough on, but I don't want the competition, thanks. Some ads target REALLY well.
I'm not sure if crush offers count...
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#14Earlier quoted context omitted.
i have clicked on facebook ads, when at times they are actually really interesting to me. not often, but a few times. i probably click on google ads about the same amount (rarely) and otherwise never click on other ads across the web.
Like I said elsewhere, I may just not be in the right demographic of facebook ad clickers. (Just another way of saying maybe I am getting old :)
or you might not have run into a very well targeted ad yet. i've run into a few ads related to some of my very niche interests and musical tastes that have definitely caught my eye.
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#15Facebook made under $300 million last year, was a little shy of breaking even, and at first expected to make towards $400 million in revenue this year. But the company said in late March — incidentally at the time that chief financial officer Gideon Yu left the company — that it was beating projections by 70 percent. I’ve confirmed that this run rate has the company possibly breaking half a billion in revenue by the…
I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience, of which they have more information about, has multiple revenue streams (billions of CPM ads [I estimate 6B by Quantcast numbers, they also have a lot more space for them since the re-design], tens of thousands of targeted ad campaigns [many of…
"I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience,"
Probably thats the problem. More affluent(generalizing to educated) people and people who use better a network for technology, dont click on ads.
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#16Earlier quoted context omitted.
I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience, of which they have more information about, has multiple revenue streams (billions of CPM ads [I estimate 6B by Quantcast numbers, they also have a lot more space for them since the re-design], tens of thousands of targeted ad campaigns [many of…
"I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience," Probably thats the problem. More affluent(generalizing to educated) people and people who use better a network for technology, dont click on ads.
I for one would like to see some proof on that matter, not that I neccesarily disbelieve that statement, but it is an interesting dynamic. Obviously more educated people may stray away from clicking on ads for free iPods or hot local singles dying to meet them, but you could say the same about less affluent people clicking on ads regarding BMW's, high fashion, SaaS's, or a wild excursion on the Serengeti (obviously some these examples are slightly strawman-ish, but the point is there are many products out there that need more exposure, of which advertising is an option, that require money, of which affluent people have more of and are presumably more willing to spend because of that). Rich or poor, educated or uneducated, everyone has needs, everyone.
But of course, that's not even the point, because at the end of the day, you really care about maximizing user value, which for ads is frequency * (CPC or CPM). Now, obviously the CPC rates are higher for a BMW relative to a free iPod and the CPM rates are also higher if you know the audience is affluent, higher still if they are a fan of BMW on FB, higher still if you know their status is 'looking for a new car', etc. LinkedIn has fairly high CPM's from what I hear.
So is my conclusion that more affluent users are more valuable than less affluent ones? No, I don't know that, but that is my hypothesis, and I'd like to see some evidence pointing one way or the other (actual non-anecdotal evidence, and not just Myspace makes more than Facebook, since they run two very different ad systems and since we all know that correlation only goes so far).
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#17Facebook apps and ads appeal to a market very far away from us tech guys so it can be hard to think of how it works. Think of things as random as bored at home fat housewives and Swedish people as your money makers. Also facebook ads can be hyper local, because people in facebook tend to actually put accurate information in! Imagine local businesses and organizations advertising their cancer runs, concerts or what no…
Hmm, yes and no. Facebook ads are generally well targeted, I think. I get ads mainly for diving and snowboarding (which I have followed), dating (I am single and looking, not quite ready to take the plunge into online dating yet tho') and fitness (and I know those "get a six pack" ads are all scams, but showing them to me is a reasonable decision by the algorithm). I also get "become a fan of X" as sponsored ads which is just plain stupid.
Google's ads seem to be simple keyword matches and are context-free, I think Facebook could have the edge here, but they really do need to get rid of the scammers and actually pay attention to feedback (e.g. if I flag an ad as uninteresting, FB is wasting my time and its advertiser's money by showing it to me ever again).
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#18Facebook made under $300 million last year, was a little shy of breaking even, and at first expected to make towards $400 million in revenue this year. But the company said in late March — incidentally at the time that chief financial officer Gideon Yu left the company — that it was beating projections by 70 percent. I’ve confirmed that this run rate has the company possibly breaking half a billion in revenue by the…
Why? It's revenue, not profit.
If Facebook is actually "almost profitable", then my little 8-hour iPhone app is more profitable than Facebook.
Think about that. All those people; all that effort; all that busy-work. It's just wealth redistribution.
Now, investors expect that Facebook will scale (financially) better than Jaba's little iPhone app that you've never heard of -- once it starts making money it'll make heaps of money.
Thing is, if they're wrong, it's just a huge misuse of capital. OTOH there is a value to having subsidized geek nirvanas (to the geeks, not the investors).
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#19Earlier quoted context omitted.
What are they making money off? I have never heard of anyone clicking an ad on facebook. (conversely I have met few Internet users who have NOT clicked a Google ad) They could be selling data/information. If so, I hope it's anonymized.
full disclosure: I build/make money from facebook apps Facebook made under $300 million last year, was a little shy of breaking even... Why is this surprising to so many? There are dozens of developers that are netting 100k+ a month (yes i actually talk to one of them quite often), and at least half of this is from ads. Facebook is the largest social network in the world and growing at about 1 million users a day; wh…
Good for you! It's not so great for Facebook's investors, though.
FB: Hi, we're a conduit that funnels small sums of money from millions of people into a smaller number of developer's pockets.
Investors: So, how much of that do we get?
FB: Um. Almost 0, but we're working on that.
Investors: ...
Re: Facebook rejects funding at $4 billion valuation, may not raise more
#20Earlier quoted context omitted.
I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience, of which they have more information about, has multiple revenue streams (billions of CPM ads [I estimate 6B by Quantcast numbers, they also have a lot more space for them since the re-design], tens of thousands of targeted ad campaigns [many of…
"I don't understand what everyone's so surprised about. Myspace makes nearly $1 billion in revenue, and Facebook is larger, has better technology, has a more affluent audience," Probably thats the problem. More affluent(generalizing to educated) people and people who use better a network for technology, dont click on ads.
The fact that linkedin has the highest CPM rate of any of the major networks would seem to suggest otherwise.