3 ms·

there's just no way, they can justify a 95B valuation at the current revenue streams. if you look at the following estimates: monthly visitors on google: 190M

by jcfrei 14y ago

there's just no way, they can justify a 95B valuation at the current revenue streams. if you look at the following estimates: monthly visitors on google: 190M facebook: 150M average time on site (from alexa) on google: 11min facebook: 22min revenues of google in 2011 (from google sites): 26B facebook: 3.7B this gap is so striking, that I wonder why investors don't realize, that you just can't run ads as well on a social network as you can on a search engine. it does't matter how targeted your ads are or how much you know about your users - it's just not a place where a lot of people click on ads. they are there for the social experience. facebook has some of the best people in the industry and if they can't figure out how to monetize their site, the rest of the social media startups will have an even more difficult time. this highlighting feature is another attempt. i wouldn't be surprised if they actually started charging large corporations like nike for their pages usage (that could really be a profitable income source). to sum it up: I see facebook much closer to a 30B valuation, with a realisitc P/E ratio of around 20. because if facebook wants to remain the social fabric of the web, it will also remain the web's workhorse.

PakG1 14y ago
You know, that's funny. Reading The Facebook Effect, that was actually Facebook's first major revenue source. Such a "sponsorship" type of deal from Apple whereby they could access users. Apple was their sugar daddy for a while at the beginning.
IsaacL 14y ago
"i wouldn't be surprised if they actually started charging large corporations like nike for their pages usage" That's the thing, I think their valuation is based on the ton of potential revenue opportunities like that they haven't explored yet. There's a ton of companies getting value from Facebook marketing (not ads, pages and so forth), Facebook just (in theory) needs to figure out how to capture some of that value. And look at stuff like Zynga as well -- they built a billion dollar company on top of Facebook's platform, and now make up something like 10% of FB's revenues IIRC. Are there any similar untapped opportunities for the company that owns the world's social graph? I know it sounds kind of airy trying to value a company on as-yet non-existent revenue streams, but what's the chance they don't manage to find a few more Zynga-scale opportunities in the next ten years?
ryancarson 14y ago
I think you're comparing to fundamentally different companies, so your conclusion is invalid. Facebook's higher valuation is based on the fact that it's traffic is much more engaged then Google. That's valuable to marketers and business who will pay for targetted and engaged users.

by jcfrei 14y ago

PakG1 14y ago

You know, that's funny. Reading The Facebook Effect, that was actually Facebook's first major revenue source. Such a "sponsorship" type of deal from Apple whereby they could access users. Apple was their sugar daddy for a while at the beginning.

IsaacL 14y ago

"i wouldn't be surprised if they actually started charging large corporations like nike for their pages usage" That's the thing, I think their valuation is based on the ton of potential revenue opportunities like that they haven't explored yet. There's a ton of companies getting value from Facebook marketing (not ads, pages and so forth), Facebook just (in theory) needs to figure out how to capture some of that value. And look at stuff like Zynga as well -- they built a billion dollar company on top of Facebook's platform, and now make up something like 10% of FB's revenues IIRC. Are there any similar untapped opportunities for the company that owns the world's social graph? I know it sounds kind of airy trying to value a company on as-yet non-existent revenue streams, but what's the chance they don't manage to find a few more Zynga-scale opportunities in the next ten years?

ryancarson 14y ago

I think you're comparing to fundamentally different companies, so your conclusion is invalid. Facebook's higher valuation is based on the fact that it's traffic is much more engaged then Google. That's valuable to marketers and business who will pay for targetted and engaged users.