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Free is not a business model. Within 12-18 months expect Facebook and Twitter to go the same route. Their burn rate is starting to catch up to them and Twitter'
by suckafree 16y ago
Free is not a business model. Within 12-18 months expect Facebook and Twitter to go the same route. Their burn rate is starting to catch up to them and Twitter's search deals will shrink.
- subwindow 16y agoDo you have any idea how much money Facebook is raking in with advertising? The targeting available on Facebook is unparalleled in human history, and they are making a mint on it.
- borism 16y agooh yes, they do! much better than google! however there's absolutely nothing advertised on them that I'm interested in. I literally can count on both hands number of times I clicked on google or facebook ads.
- il 16y agoSo obviously nobody else clicks on Facebook ads either, right?
- petewarden 16y agoIn my experience, a good click-through rate is about 0.1%, which makes sense since they're essentially banner ads 2.0, there's no intent captured at all. That said, they were cheap enough that I was able to acquire new users for my Facebook app at around $2 each in my small-scale tests.
- borism 16y agoobviously a lot of people do for now, since it's kind of novel and obtrusive way of advertising. the point is - online ad market is getting saturated.
- axod 16y agoEither cite some hard facts and data, or stop making sweeping statements.
- suckafree 16y agoYes, I do have an idea. And it is largely do to their user growth. This growth is not sustainable and will start to taper in 6-12 months. Facebook clearly is making money from ads (I'm not discounting this). It's been estimated at somewhere in the $400-600MM range. Of that Microsoft and their own ads make up the bulk of that. That is starting to dwindle and they are going to be headed in the direction of virtual goods a la Tencent. My point is that social media sites like Ning, Facebook, and Twitter are figuring out that free is not a business. Ning is just the first to admit it.
- axod 16y agoLets not come up with a crazy assed WRONG meme like "free is not a business". Free IS a business, and has been proven time after time over the last few centuries if not longer. Companies don't fail because they chose to offer something free, they fail for other reasons. From the very little I've read about Ning, it's clear they took way too much funding for a start.
- mixmax 16y ago"..has been proven time after time over the last few centuries" Could you come up with some examples of this? Not trolling here, but I can't come up with any pre-internet free models off the top of my head.
- algolicious 16y agoBroadcast radio and television.
- mixmax 16y agoOf course! Stupid me...
- axod 16y agoAdvertising has been around for quite a while.
- 16y ago
- proee 16y agoAre you sure about this? I imagine they are keenly aware of their burn-rate vs. growth-rate. At some point they may have to make a course correction to bring in real revenue. FB's primary goal was probably to out-pace myspace and they've obviously done that. I'd say they are in an excellent position to make good money.
- rewind 16y agoFacebook no longer has a burn rate.
- gscott 16y agoNow they just have to figure out how to give the investors a 100x return (or whatever the return rate should be).