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There're only two questions that are important for trying to put a price on Facebook: 1) How much are Facebook users worth to advertisers (brand and/or CPC)
by aston 19y ago
There're only two questions that are important for trying to put a price on Facebook:
1) How much are Facebook users worth to advertisers (brand and/or CPC) on average and in aggregate?
2) How much is the data Facebook has (the social graph, demographic information) worth to third parties?
Matt's answer to both, based on his recent two articles, is "right now, not much relative to the internet heavyweights." That actually isn't controversial at all.
There's a lot of optimism about Facebook's future, however, that allows people to argue against Matt based on the "just wait until you see what they come up with" line of reasoning.
I'd be interested in hearing from both sides about this future Facebook. As in, what facts, specifically, might change about the world that would make Facebook worth $15 billion, and how likely is it that those changes will come about?
- cstejerean 19y agoso facebook has nowhere to go but down. if they do find a magical solution they get to keep their 15 billion valuation (since the valuation is based on them finding said solution), but if they fail their value will drop rapidly to several hundred million at best. not the kind of bet I would want to make as an investor.
- noid 19y ago2) How much is the data Facebook has (the social graph, demographic information) worth to third parties? To the right third party -- very. One sinister example is the government. Nice way to track dissenters, or round up everyone of religion/political party/group X, ala WWII. Trying to get away, because of deserting the army/dodging the draft/avoiding arrest for civil disobedience? They have a convenient list of all your friends and family you might stay with. Did you win the lottery? Someone can worm their way into your social circle by befriending the right people on your list. Or an entrepreneur might get an introduction to a VC that way. But the main thing is it can be abused to surveil people. Do you trust your government?
- Goladus 19y agoThere's a third question, though, with regard to optimism about Facebook's future, and that's the quality of its end-user experience and the likelihood it will retain its current users and traffic and continue growing.
- fleaflicker 19y agoFacebook's users aren't valuable to advertisers because they're "fragmented" (i.e., no common interests). That's why the only ads you see on MySpace and Facebook are for dating sites and T-shirts. The bigger money is in selling very specific advertising (for example, selling HD-TVs to fantasy football fanatics).
- anewaccountname 19y agoI just searched, and there are 15,321 groups with "fantasy football" in the title on Facebook.