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Facebook rejects funding at $4 billion valuation, may not raise more

venturebeat.com

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Re: Facebook rejects funding at $4 billion valuation, may not raise more

#21

Post by anamax »

cellis wrote: post #7
ajju wrote: post #4

Earlier 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…

> and at least half of this is from ads

What is the other half from? Do facebook users pay for applications? Are users buying services? (I can see a travel agent service.)

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#22

Post by randallsquared »

drusenko wrote: post #5
ajju wrote: post #4

Earlier 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 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.

I have the same experience: I've clicked on facebook and google ads at about the same rate (maybe 5ish times each) in the last year.

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#23

Post by tokenadult »

JabavuAdams wrote: post #18
ctingom wrote: post #2

Facebook 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 heap…

It's revenue, not profit.

Yes, the distinction between revenue and earnings is what makes all the difference. Investors invest to end up with more money than they put into a business enterprise.

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#24

Post by byrneseyeview »

JabavuAdams wrote: post #19
cellis wrote: post #7

Earlier quoted context omitted.

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: ...

Surely the same could be said of Google. Their revenue is some tiny fraction of 1% of the value they create for users.

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#26

Post by psranga »

I'm a little puzzled by the skepticism about Facebook's utility. I don't know about you guys, but losing touch with old friends is something I feel bad about all the time. Facebook let's you keep informed in a shallow way about people who you don't meet often (enough). That's certainly better than being uninformed.

I would actually pay a small amount for something like Facebook.

If you build something with utility, usually it's possible to derive value.

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#27

Post by omouse »

JabavuAdams wrote: post #18
ctingom wrote: post #2

Facebook 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 heap…

They're subsidzing the training of several programmers who otherwise might not have had to deal with such huge databases and systems. This is valuable because whenever Facebook dies or when the programmers leave, other companies will be the richer for it. So not a completely huge misue of capital if you're thinking about the whole of society, but definitely a misuse if you're an investor in Facebook heh.

Re: Facebook rejects funding at $4 billion valuation, may not raise more

#28

Post by JabavuAdams »

byrneseyeview wrote: post #24
JabavuAdams wrote: post #19

Earlier quoted context omitted.

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: ...

Surely the same could be said of Google. Their revenue is some tiny fraction of 1% of the value they create for users.

Google makes more money than it spends. Facebook does not (yet). This is a crucial difference.

> Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

-- Charles Dickens

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