Facebook’s 1st-Quarter Profit Falls 12% • Hacker News Board

Re: Facebook’s 1st-Quarter Profit Falls 12%

#41

Post by redthrowaway » Tue, Apr 24, 2012, 7:10 AM UTC

jonknee wrote: post #36

jbooth wrote: post #33

Earlier quoted context omitted.

If they can sell a $3 CPM, and each user loads 40,000 impressions lifetime, then they've monetized each user at $120 over that time period. That's a lot of impressions per user, but people click a lot on facebook. Plenty of room for them to grow.

That's a ridiculously high CPM for social media. The page views are very low value, even with all the targeting. Considering their revenue now and their traffic figures (over 1 trillion page views a month), their average is currently very low. $1B / 3T page views = $.33 RPM. They get a decent chunk of revenue through things other than advertising (namely their payments system) and that's a low-ball on the traffic, th…

I still don't see their endgame being traditional display advertising. It just can't provide the kind of cash they need. I think we'll see the engineers at facebook find ways to directly exploit the value of their network, but I only have vague notions of how they might do that.

Re: Facebook’s 1st-Quarter Profit Falls 12%

#42

Post by nikcub » Tue, Apr 24, 2012, 8:33 AM UTC

moreorless wrote: post #10

mikeryan wrote: post #6

Its profit, its going to be volatile. Honestly some folks will want to say the sky is falling but a lot of folks will point out that any profit at all for a company growing like Facebook is a waste of perfectly good cash.

Please explain why it is bad for a growing company to turn a profit?

because it indicates that you believe insting in your business will yield a greater return than leaving the money in the bank or with bonds.

considering that Facebook are about to raise $5B it isn't unreasonable to expect them to ramp up spending with revenue as well.

Re: Facebook’s 1st-Quarter Profit Falls 12%

#43

Post by philipithomas » Tue, Apr 24, 2012, 9:24 AM UTC

jacques_chester wrote: post #7

philipithomas wrote: post #4

Earlier quoted context omitted.

However, I am interested in seeing how their business diversifies over time - Google has both stability and revenue from expanding beyond search. Additional features such as SSO and analytics are increasing the value of Facebook beyond just friend-to-friend interactions, and I am curious about how their business plan will support long-term stability.

Google is actually not diversified at all. Out of $38 billion of revenue earned in 2011, $36.5 billion came from advertising[1]. [1] http://investor.google.com/financial/tables.html -- compare "Revenues" to "Total Advertising Revenues".

Rather than revenue diversification, I was thinking more about product diversification. With core products like GMail, search, Plus (hah), and Google Apps, if any one of those takes a catastrophic plummet in traffic, their revenue wouldn't crash completely. In their early days, if a competitor took over search, they would have no remaining products that continued to generate revenue.