5 ms·

It's a big world. $1/user/mo * 800 million users is a lot of money.

by fizx 18y ago

tokenadult 18y ago
But other social networks have actually lost users over time, even though supposedly a network becomes more sticky as more of your friends join it. I'm finding Facebook more off-putting, not more useful, as Facebook keeps trying to invent ways to draw me into the site. I spend way more time on HN than I spend on Facebook, because I find smarter discussion on HN.
- frossie 18y ago
  I think of this as the acquaintance paradox. Social networking sites are best at keeping you in touch with your acquaintances (after all, your close friends already know where to find you and what you are doing). But someone who I am already acquainted with and who is not a close friend is merely an acquaintance for a reason - I don't click with them, I don't have time for them, whatever. The paradox is that I am therefore more likely to find a stranger interesting than an acquaintance, especially a self-selected group of strangers. I think that is why you prefer HN to your facebook buddies.
potatolicious 18y ago
We've heard this argument before - but as history shows, extracting this $1/user (in profit!) per month is harder than it seems, especially when the nature of your product is not monetizable easily. How many businesses have failed that staked their entire existence on "we'll get tons of users... and show ads!"?
- bmelton 18y ago
  Say we can get 10 cents per user per month? 800,000,000 * .1 = 80,000,000 For most smaller scale websites, they are valued at 12-18 months of revenue, meaning Facebook's resale value at about 1,440,000,000. 2 billion isn't that far off the mark given the user base really.
  - rantfoil 18y ago
    Unfortunately for Facebook, it ends up costing as much just in servers and upkeep to support 800 million users.
  - potatolicious 18y ago
    You still have costs - how many ads will your users click on? How much are advertisers willing to pay for each click? How much does it cost to retain a single user? I can bet you that a Facebook user eats up a lot more than 10 cents a month in storage, bandwidth, CPU usage, etc. The problem with Facebook is that they've targeted a notoriously cheap demographic - one that is both culturally and financially opposed to paying for stuff. The only successful ads I've seen on my Facebook network is for things like college movers and maybe media promotions... You can't tap into the goldmine of actually valuable ads like, say, car sales or law services.
    - Andys 18y ago
      People might click on ads that are properly targetted. As it is now, every ad I've seen on FB are way, WAY off base for me. FB perhaps needs to find ways to upload more of the personal activities and data in order to make ads more accurately targeted.
    - krschultz 18y ago
      You are absolutely right. I do see well targeted ads based on my preferences, but I'm on facebook from september to may at school when I'm broke. In the summer when I'm making solid money I don't go on facebook and thus don't see their ads. Maybe when we all graduate from college and have more money their user base will be more valuable.
Timothee 18y ago
I find that very interesting actually, because that would be a very low price to pay: about the price of a lunch for one year of service, while Facebook hosts tons of pictures and videos and manage your events, etc. They definitely offer a valuable service to millions of people but it seems that social networks are not allowed to charge their users. It's definitely taboo and would be criticized to no end. I can see my news stream filled with "Soandso joined the group 'Paying for Facebook? WTF?'". I'm sure that, for many people, Facebook feels trivial to do even though they put in place a very reliable and fast infrastructure that handles a ridiculous amount of data.

It's a big world. $1/user/mo * 800 million users is a lot of money.

by fizx 18y ago

It's a big world. $1/user/mo * 800 million users is a lot of money.

But other social networks have actually lost users over time, even though supposedly a network becomes more sticky as more of your friends join it. I'm finding Facebook more off-putting, not more useful, as Facebook keeps trying to invent ways to draw me into the site. I spend way more time on HN than I spend on Facebook, because I find smarter discussion on HN.

frossie 18y ago
I think of this as the acquaintance paradox. Social networking sites are best at keeping you in touch with your acquaintances (after all, your close friends already know where to find you and what you are doing). But someone who I am already acquainted with and who is not a close friend is merely an acquaintance for a reason - I don't click with them, I don't have time for them, whatever. The paradox is that I am therefore more likely to find a stranger interesting than an acquaintance, especially a self-selected group of strangers. I think that is why you prefer HN to your facebook buddies.

potatolicious 18y ago

We've heard this argument before - but as history shows, extracting this $1/user (in profit!) per month is harder than it seems, especially when the nature of your product is not monetizable easily. How many businesses have failed that staked their entire existence on "we'll get tons of users... and show ads!"?

bmelton 18y ago
Say we can get 10 cents per user per month? 800,000,000 * .1 = 80,000,000 For most smaller scale websites, they are valued at 12-18 months of revenue, meaning Facebook's resale value at about 1,440,000,000. 2 billion isn't that far off the mark given the user base really.
- rantfoil 18y ago
  Unfortunately for Facebook, it ends up costing as much just in servers and upkeep to support 800 million users.
- potatolicious 18y ago
  You still have costs - how many ads will your users click on? How much are advertisers willing to pay for each click? How much does it cost to retain a single user? I can bet you that a Facebook user eats up a lot more than 10 cents a month in storage, bandwidth, CPU usage, etc. The problem with Facebook is that they've targeted a notoriously cheap demographic - one that is both culturally and financially opposed to paying for stuff. The only successful ads I've seen on my Facebook network is for things like college movers and maybe media promotions... You can't tap into the goldmine of actually valuable ads like, say, car sales or law services.
  - Andys 18y ago
    People might click on ads that are properly targetted. As it is now, every ad I've seen on FB are way, WAY off base for me. FB perhaps needs to find ways to upload more of the personal activities and data in order to make ads more accurately targeted.
  - krschultz 18y ago
    You are absolutely right. I do see well targeted ads based on my preferences, but I'm on facebook from september to may at school when I'm broke. In the summer when I'm making solid money I don't go on facebook and thus don't see their ads. Maybe when we all graduate from college and have more money their user base will be more valuable.

Timothee 18y ago

I find that very interesting actually, because that would be a very low price to pay: about the price of a lunch for one year of service, while Facebook hosts tons of pictures and videos and manage your events, etc. They definitely offer a valuable service to millions of people but it seems that social networks are not allowed to charge their users. It's definitely taboo and would be criticized to no end. I can see my news stream filled with "Soandso joined the group 'Paying for Facebook? WTF?'". I'm sure that, for many people, Facebook feels trivial to do even though they put in place a very reliable and fast infrastructure that handles a ridiculous amount of data.