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Isn't that simply debasing the value of all internet and software technology companies, then? None of them are older than BMW, and none of them make engineered
by muhfuhkuh 16y ago
Isn't that simply debasing the value of all internet and software technology companies, then? None of them are older than BMW, and none of them make engineered steel products. Yet, I'm very sure that more people use Facebook and, say, Windows, than own a BMW.
- ijuhyftgreduy 16y agoBut the people that use facebook pay facebook $0 The people that use BMW pay BMW $50,000 Lose money on every customer but make up for it in volume is not a sustainable business model
- muhfuhkuh 16y agoSomehow I highly doubt facebook is losing all that much money, hence their valuation. They're making it up on volume ad sales.
- justin 16y ago... aggressive use of basic arithmetic is required to understand Facebook's model compared to high cost, physical goods. If Facebook makes $.10 in advertising off 500m people a month, and each person costs $.05 to serve, that is $25 million / month. If BMW makes $50,000 / car but only sells 1,000 cars a month, and each costs $25k to make / ship / sell then they are only making $2.5 million / month. Clearly both companies make more than that, but this is an illustration of how selling high cost goods might not be as profitable as a website used by 10% of the world.
- ijuhyftgreduy 16y agoFacebook has revenues of $500M/year - which allows them to be cash flow positive, no word on how much profit. To be worth $50bn, 100x as much, it needs to find 100x as many users or earn 100x as much per user. BMW has $50Bn of earnings for selling 1M cars/year to make twice as much it simply has to sell 2M cars
- gsmaverick 16y agoCitation for Facebook revenues? Recent rumours have it at ~$2 billion.