4 ms·

I'm guilty of wishing FB a bit of schaden myself, but if they actually have a business on their hands and the market reflects that in the coming months and year

I'm guilty of wishing FB a bit of schaden myself, but if they actually have a business on their hands and the market reflects that in the coming months and years, the effect is that access to capital for all of us will not be a problem for the next decade. Think of the effect that the Google IPO has had on access to angel and other investment capital. Two of my angels are former Googlers and my previous business was a vertical search sold right after Google IPO'd. All our destinies are in one way or another wrapped up in this little ticker symbol for the next few years.

iharris 14y ago
I'm in agreement here. Like it or not, FB will likely affect everyone here, whether directly or indirectly. Regardless of how the trading goes today, it should be an interesting ride.
joering2 14y ago
I think if most wishes it to tank, its not because of envy, but rather because we all see how people lose control over their private data in the name of chilling out with friends on the cool website. This is extremely sweet candy that feels so good right now, but eventually you will throw up and have cavities. To me a wake-up call was a huge investment that FB accepted from DST.
- fear91 14y ago
  So are we rooting for the fall of Google, too?
  - marshray 14y ago
    Google seems to have a pretty good track record of being a well run, profitable company. In my opinion anyway, FB still seems to be in the "do something big, figure out how to profit from it later" stage. That's all well and good, but I don't know that it's $130+ per active user good. How many ad banners are these people going to click? To put this in perspective, the initial valuation of $104B is over 2/3 the entire amount of money spent on all advertising in the US last year ($141B).
    - fear91 14y ago
      I believe that Facebook could make something like AdSense. They have vast quantities of info about people and their interests. Additionally, thanks to the huge presence of facebook tracking codes (Likes) on websites, they can track which websites you visit - additionally increasing targeting efficiency. It would be fun seeing google decreasing their margins on AdSense (38% of webmasters profit?) vs AdvFace(or something like that). They could also use some of the IPO money to acquire Bing and somehow mold if with the Facebook. I think that Facebook valuation is so high because of many possibilities similiar to those I've just outlined.
      - marshray 14y ago
        So right now FB (at $110B) is market valued at about 1/2 of Google (at $201B). Let's say FB builds or buys a search engine, a popular web browser, a smartphone platform equivalent to Android, a Gigabit fiber-to-the-home project, and an AdvFace that takes 50% of that market away from Google. If all that were to happen, then it might make sense for FB's valuation to be comparable to Google's. G's might even shrink a little bit to help. But G has that all functioning now, whereas FB's seems merely hypothetical. Could we not equivalently reason that FB could start a P2P auction market to rival Ebay? A distribution channel to rival Amazon?
      - rprospero 14y ago
        I remember hearing the same thing about TiVo. They had so much interesting information on what people were interested in that pundits predicted that they'd soon be giving away the boxes for free. For all of Facebook's data collection, they don't seem to be able to do anything with it. To put it in perspective, I just logged onto facebook and got an ad from a company hiring coal miners. I'm asthmatic, despise big coal, currently employed, have cerebral palsy, and live three states away from this company. I could have targeted that ad better by randomly pulling a name from the phone book. Other ads include: * Beer - I don't drink * Tickets to the Avengers - Okay, I do want to see that movie. * Getting my Bachelor's Degree Online - I already have a master's degree. Facebook knows this * Bait - While they get partial credit, since I enjoy camping, I'm not into hunting or fishing. * Tequila - See above * Lawn Fertilizer - I live in an apartment * Airfare from Chicago to Oklahoma City - I don't live in Illinois or Oklahoma. Facebook knows this. * Hunting Rifles - See above * Vodka - See above Conversely, Facebook should know that I'm attending a conference in DC next month, but there hasn't been any comments on restaurants or attractions in that area. I don't deny that they have a lot of data. However, I think they're in the TiVo situation where the data simply isn't that interesting.
  - joezydeco 14y ago
    I respect Google. The search engine they built was made out of the hard work of their own employees. They didn't build an empty bucket and wait for everyone else to do the hard work and fill it up. Sure, Facebook is full of clever hacks and nice features but the gas in that engine is the data happily supplied by their users, for the low low cost of free.
    - fear91 14y ago
      Doesn't change the fact that both companies show little regard for their users privacy. I haven't heard about facebook sniffing wi-fi packets though.
    - loverobots 14y ago
      hmmmmm...google has no content either. It just rearranges other people's content and fills the top with ads
- larrys 14y ago
  I made a comment below about how I actually profit from things like this (stock going up and the high value assigned) in what I do. I gave it some more thought and think the reason most people (including myself) would secretly wish for the stock to tank is because we feel that there is something unjust going on with how much money they are making relative to what they are doing and whether it is even sustainable. Sure we wish people success (especially when we profit) but this success seems out of proportion (didn't feel the same about google fwiw). If we believe that is the case (overvalued by the metrics and media hype and attention especially) then by the stock dropping our thoughts are validated. That's a guess at the phenomena going on here. (As an example very few swimmers are probably jealous with Michael Phelps success because he totally earned it. )
  - cube13 14y ago
    I think this is really it, especially in the HN space. Lots of entrepreneurs are looking at Facebook's SEC filings and going "How the hell are they worth that much?".
diminish 14y ago
Actually most web 2.0 startups and especially social startups will be positively affected from an investment perspect, from a successful facebook start.
- marshray 14y ago
  And if the FB IPO ends up being perceived as primarily a massive transfer of wealth from enthusiastic well-meaning small investors to the brokers and investment bankers?
  - tatsuke95 14y ago
    There is no line between "well-meaning small investors" and the banks. They are playing the same game. People who put money into Facebook early were hoping to get rich(er); they didn't do it out of the goodness our their heart. It's an SV fallacy that angels are, well, angels.
    - marshray 14y ago
      I'm not saying anyone was being charitable, I'm saying there might be a psychological demand effect that applies to long term "value" investors and not just hype-driven day traders.
  - phillmv 14y ago
    Well, that is called playing the stock market. No, I'm much more concerned with the bets the fund in which my dad's union's retirement pension plan is coming from.
    - marshray 14y ago
      I'm no investment pro but FB's valuation seems unjustified to me, so I'm searching around for explanations. Where is this additional demand for these shares coming from? The best explanation I can come up with is that FB benefits from its massive base of engaged users. I imagine there are a great many individual investors who are torn between wanting to participate in "internet tech" and wanting to not invest in what they don't understand. FB comes along and I imagine many of them to reason "I use it all the time, therefore I understand it". I believe Microsoft has also benefited from this effect. These people believe they are value investing, not playing the market.

iharris 14y ago

I'm in agreement here. Like it or not, FB will likely affect everyone here, whether directly or indirectly. Regardless of how the trading goes today, it should be an interesting ride.

joering2 14y ago

I think if most wishes it to tank, its not because of envy, but rather because we all see how people lose control over their private data in the name of chilling out with friends on the cool website. This is extremely sweet candy that feels so good right now, but eventually you will throw up and have cavities. To me a wake-up call was a huge investment that FB accepted from DST.

fear91 14y ago
So are we rooting for the fall of Google, too?
- marshray 14y ago
  Google seems to have a pretty good track record of being a well run, profitable company. In my opinion anyway, FB still seems to be in the "do something big, figure out how to profit from it later" stage. That's all well and good, but I don't know that it's $130+ per active user good. How many ad banners are these people going to click? To put this in perspective, the initial valuation of $104B is over 2/3 the entire amount of money spent on all advertising in the US last year ($141B).
  - fear91 14y ago
    I believe that Facebook could make something like AdSense. They have vast quantities of info about people and their interests. Additionally, thanks to the huge presence of facebook tracking codes (Likes) on websites, they can track which websites you visit - additionally increasing targeting efficiency. It would be fun seeing google decreasing their margins on AdSense (38% of webmasters profit?) vs AdvFace(or something like that). They could also use some of the IPO money to acquire Bing and somehow mold if with the Facebook. I think that Facebook valuation is so high because of many possibilities similiar to those I've just outlined.
    - marshray 14y ago
      So right now FB (at $110B) is market valued at about 1/2 of Google (at $201B). Let's say FB builds or buys a search engine, a popular web browser, a smartphone platform equivalent to Android, a Gigabit fiber-to-the-home project, and an AdvFace that takes 50% of that market away from Google. If all that were to happen, then it might make sense for FB's valuation to be comparable to Google's. G's might even shrink a little bit to help. But G has that all functioning now, whereas FB's seems merely hypothetical. Could we not equivalently reason that FB could start a P2P auction market to rival Ebay? A distribution channel to rival Amazon?
    - rprospero 14y ago
      I remember hearing the same thing about TiVo. They had so much interesting information on what people were interested in that pundits predicted that they'd soon be giving away the boxes for free. For all of Facebook's data collection, they don't seem to be able to do anything with it. To put it in perspective, I just logged onto facebook and got an ad from a company hiring coal miners. I'm asthmatic, despise big coal, currently employed, have cerebral palsy, and live three states away from this company. I could have targeted that ad better by randomly pulling a name from the phone book. Other ads include: * Beer - I don't drink * Tickets to the Avengers - Okay, I do want to see that movie. * Getting my Bachelor's Degree Online - I already have a master's degree. Facebook knows this * Bait - While they get partial credit, since I enjoy camping, I'm not into hunting or fishing. * Tequila - See above * Lawn Fertilizer - I live in an apartment * Airfare from Chicago to Oklahoma City - I don't live in Illinois or Oklahoma. Facebook knows this. * Hunting Rifles - See above * Vodka - See above Conversely, Facebook should know that I'm attending a conference in DC next month, but there hasn't been any comments on restaurants or attractions in that area. I don't deny that they have a lot of data. However, I think they're in the TiVo situation where the data simply isn't that interesting.
- joezydeco 14y ago
  I respect Google. The search engine they built was made out of the hard work of their own employees. They didn't build an empty bucket and wait for everyone else to do the hard work and fill it up. Sure, Facebook is full of clever hacks and nice features but the gas in that engine is the data happily supplied by their users, for the low low cost of free.
  - fear91 14y ago
    Doesn't change the fact that both companies show little regard for their users privacy. I haven't heard about facebook sniffing wi-fi packets though.
  - loverobots 14y ago
    hmmmmm...google has no content either. It just rearranges other people's content and fills the top with ads
larrys 14y ago
I made a comment below about how I actually profit from things like this (stock going up and the high value assigned) in what I do. I gave it some more thought and think the reason most people (including myself) would secretly wish for the stock to tank is because we feel that there is something unjust going on with how much money they are making relative to what they are doing and whether it is even sustainable. Sure we wish people success (especially when we profit) but this success seems out of proportion (didn't feel the same about google fwiw). If we believe that is the case (overvalued by the metrics and media hype and attention especially) then by the stock dropping our thoughts are validated. That's a guess at the phenomena going on here. (As an example very few swimmers are probably jealous with Michael Phelps success because he totally earned it. )
- cube13 14y ago
  I think this is really it, especially in the HN space. Lots of entrepreneurs are looking at Facebook's SEC filings and going "How the hell are they worth that much?".

diminish 14y ago

Actually most web 2.0 startups and especially social startups will be positively affected from an investment perspect, from a successful facebook start.

marshray 14y ago
And if the FB IPO ends up being perceived as primarily a massive transfer of wealth from enthusiastic well-meaning small investors to the brokers and investment bankers?
- tatsuke95 14y ago
  There is no line between "well-meaning small investors" and the banks. They are playing the same game. People who put money into Facebook early were hoping to get rich(er); they didn't do it out of the goodness our their heart. It's an SV fallacy that angels are, well, angels.
  - marshray 14y ago
    I'm not saying anyone was being charitable, I'm saying there might be a psychological demand effect that applies to long term "value" investors and not just hype-driven day traders.
- phillmv 14y ago
  Well, that is called playing the stock market. No, I'm much more concerned with the bets the fund in which my dad's union's retirement pension plan is coming from.
  - marshray 14y ago
    I'm no investment pro but FB's valuation seems unjustified to me, so I'm searching around for explanations. Where is this additional demand for these shares coming from? The best explanation I can come up with is that FB benefits from its massive base of engaged users. I imagine there are a great many individual investors who are torn between wanting to participate in "internet tech" and wanting to not invest in what they don't understand. FB comes along and I imagine many of them to reason "I use it all the time, therefore I understand it". I believe Microsoft has also benefited from this effect. These people believe they are value investing, not playing the market.