Forget $3B In Revenue: Things "Don't Look Good" For Facebook

Post by redmondbarry » Sat, Feb 25, 2012, 8:43 PM UTC

Eliezer wrote: post #76

pron wrote: post #45

Earlier quoted context omitted.

But the story here isn't about Facebook's success; it's about their valuation. And valuations matter a lot. The entire US economy collapsed when house prices simply failed to meet growth expectations. Banks loan money backed by (overvalued) equity, and so the entire economy is in effect backed by predictions of future earnings. I've said it here before, but I think many of the tech and app companies are grossly overv…

Are you short these companies, then? Or are you buying puts?

Post by stefanbech » Wed, Feb 29, 2012, 10:37 AM UTC

netcan wrote: post #46

mmaunder wrote: post #35

Earlier quoted context omitted.

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…

I work in online advertising and I would agree if it weren't for the number. But, Facebook are selling ads. They probably still have a lot of low hanging fruit to pick. Advertisers have probably been getting a decent bang for their buck because it hasn't been the kind of economic climate that's very friendly to frivolous ad spending. The only "theory" I can think of that would explain Facebook ad revenue as a tempora…