Some advertisers are getting much better results with Facebook ads than with Google AdWords -- for instance, see http://jeffmatthewsisnotmakingthisup.blogspot.com/2012/01/is... (Money quote from that link: "...according to a friend in retailing, the average Facebook woman updates her relationship status to 'Engaged' within two hours of the guy actually proposing…so Facebook sells that relationship status information…
http://www.facebook.com/legal/terms "We do not give your content or information to advertisers without your consent."
...which consent most consumers will blindly give by clicking on whatever button they must click to get to their Facebook page... without ever reading such legal terms.
I agree with PG that this is "fake news"
What few people realize is that Facebook does $3B in revenues while not monetizing two "real estates" that could add $3B each (or more) in the future:
- Mobile is still not monetized at all and we are talking about 400M MAU!!!!
- Facebook does not leverage the huge breadth of data it has garnered about users through their "like" actions on other publisher's website to create a much need competitor to AdSense.
These two opportunities are $B opportunities easily...
My only concern for Facebook would be that they focus too much on their short term earnings to justify their very bullish P/E multiple... and lost sight on consumer satisfaction. On the other hand, by doing so (like Google has in the past 4-5 years) would open the door to new startups that could start gaining some great momentum!
If the worst news you can find about Facebook is a few rumors that they might miss a revenue projection, a prediction that their ad revenue growth rate will decrease from its current 60% (note: ads are not the only way FB can make money), and a random class action lawsuit, then Facebook's prospects look about as good as any company's ever get. This amount of badness is background radiation. You could scrape together…
It does raise the question "What is Facebook's Killer business model?". They have defaulted into ads because that's what Google did and that's what works for many other businesses. But I've never clicked on a Facebook ad and I don't know anyone who has unless it was research. I'm seeing highly targeted ads based on my interests and demographic and I just don't click because I'm too busy social networking. Whereas wit…
>But I've never clicked on a Facebook ad and I don't know anyone who has unless it was research.
I often hear this on HN and from other techies. I bet you've never ran a serious Facebook or any other Ad campaign and measured effectiveness (in terms of business ROI).
I used to think like you, but they do work (even 0.05% click thru rate is considered effective!) and hence these companies make billions of dollars. Please stop making such ignorant statements. $3 billion revenue is not a small number.
http://www.facebook.com/legal/terms "We do not give your content or information to advertisers without your consent."
...which consent most consumers will blindly give by clicking on whatever button they must click to get to their Facebook page... without ever reading such legal terms.
Anybody who puts a column graph showing billions and overlays a downwards trend in red showing slowing growth is essentially lying.
It's irrelevant that they have a point with regards to high P/E ratiom slowing growth and missing targets. Anyone who makes a graph shaped and coloured like that is belittling their readers.
It does raise the question "What is Facebook's Killer business model?". They have defaulted into ads because that's what Google did and that's what works for many other businesses. But I've never clicked on a Facebook ad and I don't know anyone who has unless it was research. I'm seeing highly targeted ads based on my interests and demographic and I just don't click because I'm too busy social networking. Whereas wit…
Their killer business model hasn't been released yet, but it will ultimately be a competitor to Google's Content Network Ads. Facebook is the ULTIMATE retargeting machine (hence why Google created Google+, it's not because they want everyone to be more social, they want your social data for ad targeting). I bet within the next 24 months, Facebook launches their content network ad platform and it will be the first tru…
Yeah, but where will those ads appear? I have absolutely no data on this, but it seems people are spending less and less of their web time on "the open web", and more of it on medium-to-huge websites, and those usually sell their own ads directly. Facebook will succeed at what you're suggesting only if their targeting proves so effective that medium-sized websites (say the big blogs and online magazines/news sites) can make more money running Facebook ads (after giving Facebook its share) than from staying independent.
When your P/E is greater than 100, people are expecting mad growth in the future. Growth slowing already? That's bad news for people looking at investing.
What would you call a P/E ratio over 9500? http://finance.yahoo.com/q?s=CRM Both the stock and the P/E ratio has been growing for years.
I'd call it an unsustainable-bust-waiting-to-happen.
The P/E ratio is growing because the share price is going up and they aren't making money. That's not a good thing.
If the worst news you can find about Facebook is a few rumors that they might miss a revenue projection, a prediction that their ad revenue growth rate will decrease from its current 60% (note: ads are not the only way FB can make money), and a random class action lawsuit, then Facebook's prospects look about as good as any company's ever get. This amount of badness is background radiation. You could scrape together…
If the worst news you can find about Facebook is a few rumors that they might miss a revenue projection, a prediction that their ad revenue growth rate will decrease from its current 60% (note: ads are not the only way FB can make money), and a random class action lawsuit, then Facebook's prospects look about as good as any company's ever get. This amount of badness is background radiation. You could scrape together…
Their killer business model hasn't been released yet, but it will ultimately be a competitor to Google's Content Network Ads. Facebook is the ULTIMATE retargeting machine (hence why Google created Google+, it's not because they want everyone to be more social, they want your social data for ad targeting). I bet within the next 24 months, Facebook launches their content network ad platform and it will be the first tru…
Yeah, but where will those ads appear? I have absolutely no data on this, but it seems people are spending less and less of their web time on "the open web", and more of it on medium-to-huge websites, and those usually sell their own ads directly. Facebook will succeed at what you're suggesting only if their targeting proves so effective that medium-sized websites (say the big blogs and online magazines/news sites) c…
They'll appear anywhere you see a site currently running adsense ads. There's tens of millions of sites running those ads, there is far from a shortage of publishers for a new advertising network.