5 ms·

Facebook is unique because, unlike other 'giant' silicon valley startups, they don't really offer anything new in terms of revenue. They are a sophisticated bi

by johnrob 18y ago

Facebook is unique because, unlike other 'giant' silicon valley startups, they don't really offer anything new in terms of revenue. They are a sophisticated billboard. Google, on the other hand, built something new - targeting ads by keyword/content analysis. Here is a thought experiment: If all of facebook's users came to your website tomorrow, chances are you could monetize them just as well as facebook. However, if you took all of google's users, you would not do as well because you lack their technology. Facebook is like any other site on the net, just with more pageviews.

timr 18y ago
Google flailed around for a long time before finding a route to profitability. Before adwords, they didn't offer anything new in terms of revenue, either. I'm not saying that it's a given that facebook will find a profitable business model...but with their user base, it's a much better bet than for most other sites. (That said, $15Bn does seem a bit nuts.)
maximilian 18y ago
not any other site. Google can target better than anyone because they know what you are looking for and can provide advertisements for that thing. If I'm trying to find a track bike, and if I search google for track bikes, I get ads for places that sell track bike. However, If I have in my profile that I ride bikes, bike companies can target me very specifically. Or if I say what bands I like and have listed where I live or go to school, advertisements for concerts for those bands (or bands I might like) can come up. Obviously a lot of sites online can do similar target style advertising, but IMO not as targeted as what facebook can pull of. And they can go horizontally with the company types that advertise, as profiles on facebook are very general. I can put a lot of my info up - for facebook, the more the better. Most sites don't have this broad ability. They are much more niche oriented.
- nickb 18y ago
  >However, If I have in my profile that I ride bikes, bike companies can target me very specifically. Sure, but does you having that item in your profile tell me, as an advertiser, anything about your intent to buy a bike? Buy it today? Are you buying it in the next two weeks while I have the money to run a campaign? The answer is of course a big no. Just knowing something about someone doesn't tell you about their current intent. Now, would showing someone like that bike ads over the course of a year help him decide on the make and model of the next bike he purchases? Probably it would. But that's a very expensive proposition and not very profitable. This is why Facebook has such low CPMs. Now, suppose I had a way of saying "I'm looking to buy a bike"... a person like that would be much more valuable to an advertiser than someone who already rides bikes and has preferences set already for the type of bike/model that she likes. A customer that is new to bikes is A LOT easier to persuade to try out your brand than someone who's been riding bikes for years. In the end, Google's intent-based advertising is so much more amazing since it caters to everyone's whims so perfectly and displays things to you that you really might want to buy and buy it now.
  - dcurtis 18y ago
    That logic may be true about bikes. But what if my Facebook profile says I like the movies Godzilla, Jurassic Park, and The Bourne Identity? It's very easy to extrapolate a common movie "typeness" that someone likes from a list. Then you can target new movies in that genre very specifically to users who would be most likely to watch them. For movies, books, tv shows, etc, and repeatable purchases, the cache of information at Facebook is far, far more valuable than two words at Google.
    - natrius 18y ago
      "For movies, books, tv shows, etc, and repeatable purchases, the cache of information at Facebook is far, far more valuable than two words at Google." That data is valuable, but not more valuable than Google's data. It's not just two words. Google knows every movie you've searched for since the last time you cleared your cookies. Assuming Google links the cookie from AdSense with your general Google cookie, they know what sites you visit. They know tons of things about you, and that data is similar in value in isolation to Facebook's data. When you combine that data with intent, which you know from a given search query, you can display more valuable ads than Facebook could ever hope to. If Facebook Chat gets traction and Facebook pushes its messaging as more of an email replacement, they'll have useful data they can use to determine intent, which they can use to better target ads and get more money per click.
      - whacked_new 18y ago
        Speaking of FB Chat, I used it for the first time yesterday when somebody messaged me, and it freaked me out. I don't know how many people enjoy having to chat with a browser window open. Sure, it's portable, but it's unappealing in many cases; and you're practically guaranteed that they're analyzing your chat logs.
      - dcurtis 18y ago
        I am pretty sure Google doesn't use your back search history in advertising targeting. They've said this many times. If they did, here's my past few searches: jordan ritter, glowing resin bar, mac hard drive use visualization, ironport, joost commercial, photoshop light bar, wiki futurama, wiki lost, xserve g4 wiki What does that list tell you about me or my buying habits? Now expand that list by a few thousand random search terms. Any more detail?
deleted 18y ago
[deleted]
yariv 18y ago
I don't see the point of comparing Facebook to Google. Even if Facebook's advertising is less targeted than Google's, so what? Facebook's revenues = pageviews / 1000 * cpm. Nothing about the effectiveness of Adsense says Facebook can't be a thriving business.

by johnrob 18y ago

timr 18y ago

Google flailed around for a long time before finding a route to profitability. Before adwords, they didn't offer anything new in terms of revenue, either. I'm not saying that it's a given that facebook will find a profitable business model...but with their user base, it's a much better bet than for most other sites. (That said, $15Bn does seem a bit nuts.)

maximilian 18y ago

not any other site. Google can target better than anyone because they know what you are looking for and can provide advertisements for that thing. If I'm trying to find a track bike, and if I search google for track bikes, I get ads for places that sell track bike. However, If I have in my profile that I ride bikes, bike companies can target me very specifically. Or if I say what bands I like and have listed where I live or go to school, advertisements for concerts for those bands (or bands I might like) can come up. Obviously a lot of sites online can do similar target style advertising, but IMO not as targeted as what facebook can pull of. And they can go horizontally with the company types that advertise, as profiles on facebook are very general. I can put a lot of my info up - for facebook, the more the better. Most sites don't have this broad ability. They are much more niche oriented.

nickb 18y ago
>However, If I have in my profile that I ride bikes, bike companies can target me very specifically. Sure, but does you having that item in your profile tell me, as an advertiser, anything about your intent to buy a bike? Buy it today? Are you buying it in the next two weeks while I have the money to run a campaign? The answer is of course a big no. Just knowing something about someone doesn't tell you about their current intent. Now, would showing someone like that bike ads over the course of a year help him decide on the make and model of the next bike he purchases? Probably it would. But that's a very expensive proposition and not very profitable. This is why Facebook has such low CPMs. Now, suppose I had a way of saying "I'm looking to buy a bike"... a person like that would be much more valuable to an advertiser than someone who already rides bikes and has preferences set already for the type of bike/model that she likes. A customer that is new to bikes is A LOT easier to persuade to try out your brand than someone who's been riding bikes for years. In the end, Google's intent-based advertising is so much more amazing since it caters to everyone's whims so perfectly and displays things to you that you really might want to buy and buy it now.
- dcurtis 18y ago
  That logic may be true about bikes. But what if my Facebook profile says I like the movies Godzilla, Jurassic Park, and The Bourne Identity? It's very easy to extrapolate a common movie "typeness" that someone likes from a list. Then you can target new movies in that genre very specifically to users who would be most likely to watch them. For movies, books, tv shows, etc, and repeatable purchases, the cache of information at Facebook is far, far more valuable than two words at Google.
  - natrius 18y ago
    "For movies, books, tv shows, etc, and repeatable purchases, the cache of information at Facebook is far, far more valuable than two words at Google." That data is valuable, but not more valuable than Google's data. It's not just two words. Google knows every movie you've searched for since the last time you cleared your cookies. Assuming Google links the cookie from AdSense with your general Google cookie, they know what sites you visit. They know tons of things about you, and that data is similar in value in isolation to Facebook's data. When you combine that data with intent, which you know from a given search query, you can display more valuable ads than Facebook could ever hope to. If Facebook Chat gets traction and Facebook pushes its messaging as more of an email replacement, they'll have useful data they can use to determine intent, which they can use to better target ads and get more money per click.
    - whacked_new 18y ago
      Speaking of FB Chat, I used it for the first time yesterday when somebody messaged me, and it freaked me out. I don't know how many people enjoy having to chat with a browser window open. Sure, it's portable, but it's unappealing in many cases; and you're practically guaranteed that they're analyzing your chat logs.
    - dcurtis 18y ago
      I am pretty sure Google doesn't use your back search history in advertising targeting. They've said this many times. If they did, here's my past few searches: jordan ritter, glowing resin bar, mac hard drive use visualization, ironport, joost commercial, photoshop light bar, wiki futurama, wiki lost, xserve g4 wiki What does that list tell you about me or my buying habits? Now expand that list by a few thousand random search terms. Any more detail?

deleted 18y ago

[deleted]

yariv 18y ago

I don't see the point of comparing Facebook to Google. Even if Facebook's advertising is less targeted than Google's, so what? Facebook's revenues = pageviews / 1000 * cpm. Nothing about the effectiveness of Adsense says Facebook can't be a thriving business.