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But what is their revenue stream? Advertising alone? That doesn't feel, to me, like something that most people would consider to be a reliable revenue stream.
by brk 18y ago
But what is their revenue stream? Advertising alone? That doesn't feel, to me, like something that most people would consider to be a reliable revenue stream.
Hardware is usually not a significant data center cost, at least not in relationship to the power/cooling/floorspace costs. Wholesale bandwidth has dropped over the last several years from about $100/Mb/Mo to $35/Mb/Mo. I don't know how much lower that can reasonably go. But, let's say it becomes 1/3 the price again (down to $10/Mb/Mo) over the NEXT 5 years. That's a long time to wait when you're losing $20MM/Mo (using the speculative numbers quoted elsewhere for that). And the net cost savings probably don't yield more than a few $MM/mo.
- Retric 18y agoAdvertising worked for ABC, NBC, CBS, the New York Times, and Google etc. While it's somewhat cyclical it's actually fairly stable revenue stream. Ok, Facebook and the New York Times have other sources of revenue but advertising is their major source. Anyway, I think they are basically treading water and not just burning 20mill / month at this point in time. So their revenue is 300 million / year and there costs are close to that. Most of there money seems to be spent on infrastructure and people to support said infrastructure. So, if the cost of their infrastructure drops to 1/3 then their total costs should drop by ~1/2 as they still need people, and they would be making ~10million a month which is worth around 1 billion. However, I expect they can increase their revenue though optimizations and growth so they are probably worth in the 2 - 10 billion dollar range. PS: Would need to look at their actual costs to get a better Idea.