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The biggest problem with facebook, imo. All the lovers will come and razz Matt and this comment, but none of them will be able to provide any evidence that fac

The biggest problem with facebook, imo. All the lovers will come and razz Matt and this comment, but none of them will be able to provide any evidence that facebook is doing anything but spending capital.

Mistone 19y ago
how about growing users?..hmm thats seems like a valuable way to spend your time if your a consumer web company.
- run4yourlives 19y ago
  When you have over "65 billion page views per month", you don't need to focus on more users. You need to focus on getting paid. Fast. EDIT: In other words: if Money In - Money Out > 0: Success if Money In - Money Out < 0: Fail The number of users doesn't matter.
  - okeumeni 19y ago
    Good point!
  - neilc 19y ago
    Why does Facebook need to focus on "getting paid. Fast."? It's not like they have any difficulty getting funding. Obviously they need to figure out how to make money in the long run, but it's not like they're going to run out of cash any time soon.
    - run4yourlives 19y ago
      I get your point, but given the current economic climate and the understanding that the you can't predict when "the cat'll be out of the bag" in terms of when the valley realizes they're living on funding, the faster they find a way to bring in revenue, the better it is for them.
    - mattmaroon 19y ago
      They'll have difficulty getting funding at some point in the future without a down round, which nobody wants.
      - nostrademons 19y ago
        They're profitable, though. So if they wanted, they could avoid taking any more funding, ever, and just grow the company off retained earnings.
        pchristensen 19y ago
        Profitable, but nowhere near profitable enough to justify the enormous investment they've taken and their valuation.
- boredguy8 19y ago
  What exactly are facebook users consuming? And volume is no substitute for probability if every "consumption" is at a loss. Sony can sell the PS3 at a loss because it makes money on the games and in the long run, wins. They can't sell the PS3 at a loss and sell the games at a loss, and make up for it with volume. That's what facebook seems to be attempting. And they're not even winning the volume game.
  - boredguy8 19y ago
    Should have read, "volume is no substitute for profitability".
alex_c 19y ago
My suspicion is that Facebook will have to change how online advertising works, or die. Look at Compete data: average stay of 15 minutes * 350 million visits/month = 87.5 million hours / month in the US. That is coupled with decent demographic data and ability to target. How much would that much attention be worth in TV or newspaper advertising? A lot more than Facebook is currently getting, I suspect. If it can convince major brands that Facebook eyeballs are worth the same as traditional advertising (in effect sell them CPM, not CPC - "Facebook is the new TV"), then Facebook will do quite well. That's a very tough sell for smaller players, but it might not be impossible for Facebook.
- run4yourlives 19y ago
  That's a good point, but those players will want fb to adopt big msn style flash ads. I'm not sure fb's users will go for that now. I think they're going to have to look at membership or some other direct charge to users, and that's going to really affect that inflated valuation.
- aswanson 19y ago
  They can convince major brands to advertise there. The problem is, unlike traditional media ads, web based advertisers can quantify how much bang for their buck they are getting (click throughs, etc). Turns out that blanket, weakly-targeted advertising just doesn't perform that well, and companies get explicit feedback from these networks on just how bad the typical ad really is in terms of ROI.
  - shawndrost 19y ago
    Brand advertising (most of traditional media ads) isn't measured in click throughs, isn't any easier to measure on the web than elsewhere, and can't be dismissed without evidence.
    - aswanson 19y ago
      It wasn't a dismissal. I would strongly disagree with isn't any easier to measure on the web than elsewhere though. If I place an ad on a site that results in 16 clicks which result in 4 transactions out of an audience of 32, I have a mathematical percentage of the effectiveness of my ad placement. This is possible on any ad placement on the web. If I run the same ad on tv or print, I have nowhere near the ability to accurately attribute any delta in sales activity to that specific ad run at that specific point in time.
yariv 19y ago
I think that when Facebook introduces a transactions API to their platform to enable frictionless micro-transactions in apps it will start raking in a lot of money by taking a cut of each transaction. How successful it can be is pure speculation, of course.
- axod 19y ago
  That assumes someone actually makes an app which is worth using. Let alone paying for...
  - jcromartie 19y ago
    I can only guess that you're getting downvoted because there are people here who would rather not believe what you're saying because their startup is based on building Facebook apps.
  - yariv 19y ago
    I think the key issue isn't whether apps are worth using, but whether many people actually use them. The answer is a pretty clear "yes."
    - run4yourlives 19y ago
      Not so much. The key issue is whether people will somehow pay for apps, and by extension FB itself. That remains to be seen.
yters 19y ago
Facebook potentially offers the best kind of advertising: referrals. The social graph gives companies the data they need to target this kind of advertising. However, this means companies need to be less exploitative and work more with their consumer. I see this as being a bigger benefit for smaller, more personable seeming companies.

Mistone 19y ago

how about growing users?..hmm thats seems like a valuable way to spend your time if your a consumer web company.

run4yourlives 19y ago
When you have over "65 billion page views per month", you don't need to focus on more users. You need to focus on getting paid. Fast. EDIT: In other words: if Money In - Money Out > 0: Success if Money In - Money Out < 0: Fail The number of users doesn't matter.
- okeumeni 19y ago
  Good point!
- neilc 19y ago
  Why does Facebook need to focus on "getting paid. Fast."? It's not like they have any difficulty getting funding. Obviously they need to figure out how to make money in the long run, but it's not like they're going to run out of cash any time soon.
  - run4yourlives 19y ago
    I get your point, but given the current economic climate and the understanding that the you can't predict when "the cat'll be out of the bag" in terms of when the valley realizes they're living on funding, the faster they find a way to bring in revenue, the better it is for them.
  - mattmaroon 19y ago
    They'll have difficulty getting funding at some point in the future without a down round, which nobody wants.
    - nostrademons 19y ago
      They're profitable, though. So if they wanted, they could avoid taking any more funding, ever, and just grow the company off retained earnings.
      - pchristensen 19y ago
        Profitable, but nowhere near profitable enough to justify the enormous investment they've taken and their valuation.
boredguy8 19y ago
What exactly are facebook users consuming? And volume is no substitute for probability if every "consumption" is at a loss. Sony can sell the PS3 at a loss because it makes money on the games and in the long run, wins. They can't sell the PS3 at a loss and sell the games at a loss, and make up for it with volume. That's what facebook seems to be attempting. And they're not even winning the volume game.
- boredguy8 19y ago
  Should have read, "volume is no substitute for profitability".

alex_c 19y ago

My suspicion is that Facebook will have to change how online advertising works, or die. Look at Compete data: average stay of 15 minutes * 350 million visits/month = 87.5 million hours / month in the US. That is coupled with decent demographic data and ability to target. How much would that much attention be worth in TV or newspaper advertising? A lot more than Facebook is currently getting, I suspect. If it can convince major brands that Facebook eyeballs are worth the same as traditional advertising (in effect sell them CPM, not CPC - "Facebook is the new TV"), then Facebook will do quite well. That's a very tough sell for smaller players, but it might not be impossible for Facebook.

run4yourlives 19y ago
That's a good point, but those players will want fb to adopt big msn style flash ads. I'm not sure fb's users will go for that now. I think they're going to have to look at membership or some other direct charge to users, and that's going to really affect that inflated valuation.
aswanson 19y ago
They can convince major brands to advertise there. The problem is, unlike traditional media ads, web based advertisers can quantify how much bang for their buck they are getting (click throughs, etc). Turns out that blanket, weakly-targeted advertising just doesn't perform that well, and companies get explicit feedback from these networks on just how bad the typical ad really is in terms of ROI.
- shawndrost 19y ago
  Brand advertising (most of traditional media ads) isn't measured in click throughs, isn't any easier to measure on the web than elsewhere, and can't be dismissed without evidence.
  - aswanson 19y ago
    It wasn't a dismissal. I would strongly disagree with isn't any easier to measure on the web than elsewhere though. If I place an ad on a site that results in 16 clicks which result in 4 transactions out of an audience of 32, I have a mathematical percentage of the effectiveness of my ad placement. This is possible on any ad placement on the web. If I run the same ad on tv or print, I have nowhere near the ability to accurately attribute any delta in sales activity to that specific ad run at that specific point in time.

yariv 19y ago

I think that when Facebook introduces a transactions API to their platform to enable frictionless micro-transactions in apps it will start raking in a lot of money by taking a cut of each transaction. How successful it can be is pure speculation, of course.

axod 19y ago
That assumes someone actually makes an app which is worth using. Let alone paying for...
- jcromartie 19y ago
  I can only guess that you're getting downvoted because there are people here who would rather not believe what you're saying because their startup is based on building Facebook apps.
- yariv 19y ago
  I think the key issue isn't whether apps are worth using, but whether many people actually use them. The answer is a pretty clear "yes."
  - run4yourlives 19y ago
    Not so much. The key issue is whether people will somehow pay for apps, and by extension FB itself. That remains to be seen.

yters 19y ago

Facebook potentially offers the best kind of advertising: referrals. The social graph gives companies the data they need to target this kind of advertising. However, this means companies need to be less exploitative and work more with their consumer. I see this as being a bigger benefit for smaller, more personable seeming companies.