4 ms·

>c) If the advertising market ever tanks, they're screwed. You know that has happened recently right? People at facebook, and prominent investors like Andrees

by rortian 17y ago

>c) If the advertising market ever tanks, they're screwed. You know that has happened recently right? People at facebook, and prominent investors like Andreessen, have pointed out repeatedly that they could raise a lot more revenue. However, most of these methods would simply destroy the site by making the user experience much less bearable. >b) Their revenue per user is miserably low This might be a problem if they didn't have an enormous number of users and a very impressive amount of active users. >Holding Facebook up as an example of a worthy business model to follow is horribly naive. Is an incredibly nasty statement that reeks of jealousy. Sort of silly too. I think you could say a similar thing about Microsoft, since there will really only be one PC OS monopolist.

tokenadult 17y ago
Their revenue per user is miserably low This might be a problem if they didn't have an enormous number of users and a very impressive amount of active users. Somehow this reminds me of the old joke about the guy who lost money on every sale but made it up in volume. Yes, Facebook might make money enough to recover the investment of the first investors someday (I can remember when Amazon looked like it would never do that), but that all depends on the overall net earnings per user being positive. To date, even Facebook's own press releases don't report a situation that makes it clear the initial investors will ever be able to recover their investments. I like Facebook well enough, but unlike my early interaction with Amazon I have never made a payment to Facebook for anything.
- rortian 17y ago
  Yeah, but as others have pointed out, you haven't paid Google anything (you could have but probably not). It would be nice if facebook were public. Then we would know how much/if they are losing money on each user today.
- axod 17y ago
  Are you trying to suggest that for a website like facebook, it costs them more money to serve a few dumb HTTP requests, than they can make from adverts? That would be quite an achievement. >> "I like Facebook well enough, but unlike my early interaction with Amazon I have never made a payment to Facebook for anything." Many advertisers have.
  - apsurd 17y ago
    As a defendant of facebook, surely you can't say all they are doing is serving dumb http requests? Their army of world-class engineers would beg to differ no? And they must cost quite a penny to support?
    - axod 17y ago
      That's through their own choice, and something they can "switch off" whenever they feel like it. It's called investment and building.
netcan 17y ago
People at facebook, and prominent investors like Andreessen, have pointed out repeatedly that they could raise a lot more revenue. However, most of these methods would simply destroy the site by making the user experience much less bearable. I don't see that as a meaningful statement. If it would destroy the site, you cannot use this method to raise a lot more revenue.
- rortian 17y ago
  That's a good point and I should have stressed that this was in the past. It's fair to say the have reached a critical mass (in terms of members, photos on the site) where they could raise more revenue now but won't see a huge loss in usage. I think they will be able to raise revenue in a lot of creative ways. People underestimate how much the data that they have is worth.

by rortian 17y ago

tokenadult 17y ago

Their revenue per user is miserably low This might be a problem if they didn't have an enormous number of users and a very impressive amount of active users. Somehow this reminds me of the old joke about the guy who lost money on every sale but made it up in volume. Yes, Facebook might make money enough to recover the investment of the first investors someday (I can remember when Amazon looked like it would never do that), but that all depends on the overall net earnings per user being positive. To date, even Facebook's own press releases don't report a situation that makes it clear the initial investors will ever be able to recover their investments. I like Facebook well enough, but unlike my early interaction with Amazon I have never made a payment to Facebook for anything.

rortian 17y ago
Yeah, but as others have pointed out, you haven't paid Google anything (you could have but probably not). It would be nice if facebook were public. Then we would know how much/if they are losing money on each user today.
axod 17y ago
Are you trying to suggest that for a website like facebook, it costs them more money to serve a few dumb HTTP requests, than they can make from adverts? That would be quite an achievement. >> "I like Facebook well enough, but unlike my early interaction with Amazon I have never made a payment to Facebook for anything." Many advertisers have.
- apsurd 17y ago
  As a defendant of facebook, surely you can't say all they are doing is serving dumb http requests? Their army of world-class engineers would beg to differ no? And they must cost quite a penny to support?
  - axod 17y ago
    That's through their own choice, and something they can "switch off" whenever they feel like it. It's called investment and building.

netcan 17y ago

People at facebook, and prominent investors like Andreessen, have pointed out repeatedly that they could raise a lot more revenue. However, most of these methods would simply destroy the site by making the user experience much less bearable. I don't see that as a meaningful statement. If it would destroy the site, you cannot use this method to raise a lot more revenue.

rortian 17y ago
That's a good point and I should have stressed that this was in the past. It's fair to say the have reached a critical mass (in terms of members, photos on the site) where they could raise more revenue now but won't see a huge loss in usage. I think they will be able to raise revenue in a lot of creative ways. People underestimate how much the data that they have is worth.