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> and display advertising is likely to follow. I think this is correct, and it explains why the IPO exit is happening now. Most of the insane growth (in profi

> and display advertising is likely to follow. I think this is correct, and it explains why the IPO exit is happening now. Most of the insane growth (in profit as well as valuation) has already been squeezed out.

roc 15y ago
> "Most of the insane growth (in profit as well as valuation) has already been squeezed out." I would amend that to say: most of the easy growth has been squeezed out. But there's still a huge opportunity for Facebook to grow revenue/profit if they switch to using personal data to make well-directed ads they can push to sites using Facebook Connect and/or if they can roll out a solid first-party Facebook-phone. [1] Those are both far trickier than "grow Facebook", so it does make sense to capture some returns now. But I think it would be short sighted to write their future prospects off entirely. [1] They could quite possibly fork Android and do to Google in the phone market what Amazon is doing to the tablet market. And they'd be crazy not to try.
- jonnathanson 15y ago
  I would agree with you here. Most of the low-hanging fruit has been plucked. But that doesn't mean the low-hanging fruit is the juiciest. As I mentioned in the grandparent comment, and as I agree with you, Facebook Connect is the future of Facebook. Facebook seems to understand that fact, and now it's just a matter of how keenly it does. Facebook has (wisely) focused almost entirely on user growth and retention over the last few years. That it stumbled into being an attractive display-advertising platform was almost inevitable, and required little effort. The real money lies on the distributed mobile and web ecosystem, into which Facebook has been diligently inserting itself as a de facto credential and backend. (Think of Facebook as the "Intel Inside" of the entire content web and mobile content web, and you get the idea). Facebook has established an impressive beachead with FB Connect, and from there, it's only a matter of time before it can monetize its FB Connect partners through contextual and interest-based advertising services. Google should be very concerned -- and, to that end, it would not surprise me in the least if the threat of FB Connect to AdSense (and, to some extent, AdWords) was a significant factor in the race to develop Google+.
fvryan 15y ago
It's unlikely that Facebook is trying to time their IPO at the height of their potential. I think they still have a lot of room to grow the display advertising business, but unfortunately there is a shift to mobile and the Facebook mobile UX isn't that great. I think they need to continue to worry about building products users love and improve mobile UX, advertisers will always come to where the users are.
dcaranda 15y ago
I think the only reason they went public was because they had to. Mainly the 500 investor limit.
- cies 15y ago
  isn't it dead easy to setup an investor entity, that invests in FB on behalf of max 500 other investors?
- jpdoctor 15y ago
  > I think the only reason they went public was because they had to. No, hitting the investor limit means only that you have filing obligations with the SEC. There is no obligation to trade your stock publicly.
- jedberg 15y ago
  They got past that in 2008 and the SEC said it was ok since most of the shareholders were employees.

roc 15y ago

> "Most of the insane growth (in profit as well as valuation) has already been squeezed out." I would amend that to say: most of the easy growth has been squeezed out. But there's still a huge opportunity for Facebook to grow revenue/profit if they switch to using personal data to make well-directed ads they can push to sites using Facebook Connect and/or if they can roll out a solid first-party Facebook-phone. [1] Those are both far trickier than "grow Facebook", so it does make sense to capture some returns now. But I think it would be short sighted to write their future prospects off entirely. [1] They could quite possibly fork Android and do to Google in the phone market what Amazon is doing to the tablet market. And they'd be crazy not to try.

jonnathanson 15y ago
I would agree with you here. Most of the low-hanging fruit has been plucked. But that doesn't mean the low-hanging fruit is the juiciest. As I mentioned in the grandparent comment, and as I agree with you, Facebook Connect is the future of Facebook. Facebook seems to understand that fact, and now it's just a matter of how keenly it does. Facebook has (wisely) focused almost entirely on user growth and retention over the last few years. That it stumbled into being an attractive display-advertising platform was almost inevitable, and required little effort. The real money lies on the distributed mobile and web ecosystem, into which Facebook has been diligently inserting itself as a de facto credential and backend. (Think of Facebook as the "Intel Inside" of the entire content web and mobile content web, and you get the idea). Facebook has established an impressive beachead with FB Connect, and from there, it's only a matter of time before it can monetize its FB Connect partners through contextual and interest-based advertising services. Google should be very concerned -- and, to that end, it would not surprise me in the least if the threat of FB Connect to AdSense (and, to some extent, AdWords) was a significant factor in the race to develop Google+.

fvryan 15y ago

It's unlikely that Facebook is trying to time their IPO at the height of their potential. I think they still have a lot of room to grow the display advertising business, but unfortunately there is a shift to mobile and the Facebook mobile UX isn't that great. I think they need to continue to worry about building products users love and improve mobile UX, advertisers will always come to where the users are.

dcaranda 15y ago

I think the only reason they went public was because they had to. Mainly the 500 investor limit.

cies 15y ago
isn't it dead easy to setup an investor entity, that invests in FB on behalf of max 500 other investors?
jpdoctor 15y ago
> I think the only reason they went public was because they had to. No, hitting the investor limit means only that you have filing obligations with the SEC. There is no obligation to trade your stock publicly.
jedberg 15y ago
They got past that in 2008 and the SEC said it was ok since most of the shareholders were employees.