7 ms·

Facebook earnings gain as ad sales surge 82%; CFO is stepping down

72 points by Kopion 12y ago

chollida1 12y ago
Certainly not related to the numbers. They killed it this quarter! They had a NON-GAAP EPS of 34C while estimates were at 24C. That's pretty incredible considering that mobile advertising contributing about 59% of their advertising revenue. That's been the one area that analysts were worried about.
- robzyb 12y ago
  What is "34C" and "24C"?
  - brianbreslin 12y ago
    34 cents $0.34 , earnings per share
- exelius 12y ago
  It's hard to be an officer in a public company for any significant amount of time. Especially a CFO. You are personally, criminally liable for any fuck-ups your company may make, and that wears on a person. You don't see many CFOs that stick with companies for more than 5-7 years. Undeniably they blew their numbers out of the water. And I don't think his departure has anything to do with the numbers; he's probably just tired.
  - camillomiller 12y ago
    In other news Tim Cook officially saluted Peter Oppenheimer today. Apple's CFO of TEN years, Oppenheimer is retiring at the end of semptember. Cook: "He never missed a guidance in ten years. This must be a record among CFOs". :)
- pbreit 12y ago
  And while revenue was up 72%, income nearly tripled! This is why you invest every penny you have into growing a software company and push profits out as far as possible.
  - ZenPro 12y ago
    Facebook is not a software company. http://www.forbes.com/sites/joemckendrick/2012/06/29/rip-software-companies-hello-data-companies/ http://www.forbes.com/sites/joemckendrick/2012/06/29/rip-sof...
    - dredmorbius 12y ago
      In terms of what actually directly provides value, it's less data and more social lock-in. Arguably software is a large driver of the company's value. This is all pretty much an angles dancing on heads of pins argument, though.
    - pbreit 12y ago
      I disagree but will switch to a "near zero marginal cost" company.
  - pyrrhotech 12y ago
    that's what they thought in 1999 too. Only works as long as your investors believe your story and are willing to keep injecting cash
ghx 12y ago
The headline should read, "Facebook earnings gain as they insert 82% more ads". There's got to be a point where it just gets too saturated for users, just like Myspace did. Maybe not this time?
- randartie 12y ago
  Earnings call clearly says ad impressions decreased 17%, but price to advertise has doubled.
- Einstalbert 12y ago
  As with Skype, I wait for the day when another Facebook competitor becomes ubiquitous enough to warrant switching. I am waiting for pretty much anything, so long as it has the market share with friends and family.
  - aaronbrethorst 12y ago
    Well, the most obvious candidate was recently acquired by Facebook, so it might be a few more years.
- encoderer 12y ago
  Nope. Try again. They're making higher CPCs and CPMs.
  - ZenPro 12y ago
    To be fair, those figures have been disputed and also called outright fraudulent by a number of parties. An advertiser recently had an $800,000 invoice struck off because he threatened to sue Facebook. They decided just to let it slide instead of have the public debate.
- deleted 12y ago
  [deleted]
001sky 12y ago
The world’s largest social network has been on an acquisition tear this year, effectively moving to transform itself into a tech portfolio company. >Interesting take on things ...
ZenPro 12y ago
I fully imagine the descent will even more rapid than the rise. When people congregate; advertisers follow seeking the staggering ROI of the early marketers on the platform. The platform, under shareholder pressure, will accept as many ads as it can until the platform is so saturated the customers leave and the ad ROI plummets. Advertisers are normally last to arrive at the party and also late to leave... I recently saw a photo that demonstrated Facebook has an 8/1 content ratio. For every 1 meaningful piece of content a user is subjected to 8 ads including sidebar + newsfeed. If you include the horizontal scrolling for mobile adverts it rises to 13/1. I think this party just hit it's peak. I deleted my FB a month ago, have not really missed it and a few of my friends have followed. Anecdotal evidence admittedly but no one did it in the usual "I am out!". The deletions were more of a shrug. Personally I find that the most emphatic indictment; when people have just grown bored of your platform.
- SDGT 12y ago
  Every single week that I sit down and stare at my newrelic monitor, I think the exact same thing: "This is all going to collapse soon." After almost two years of staring at six figure weekly revenue values on the analytics and tracking applications I've built (I obviously am not making this much), I begin to question my inherent concerns on FB's long game.
  - ZenPro 12y ago
    From a quantitative perspective I cannot fault them right now but from a qualitative perspective...something is rotten in Denmark. Facebook is not the platform we need, it's the one we deserve right now ;-)
- dismal2 12y ago
  The collapse will not come from this, it will come when all the companies (gaming mostly) stop making money and can no longer justify spending $10-15 per install. It will all tumble quickly, but not because FB over-saturated their ecosystem with ads.
  - 12y ago
bertil 12y ago
I have reasons to believe that Facebook earnings correspond to unstable practice: namely, both brands and games have bad metrics (i.e. uninformative) of their activity, and both are re-considering how their price fan- and user-acquisition. There is a stunning lack of understanding of social network dynamics among Facebook client companies. I have been through a lot of interviews lately, and no one to whom I talked seemed to know basic things like the Friend paradox, avalanche thresholds, or that the first fans are naturally more engaged -- Facebook ad purchase interface doesn’t really help either. Nothing about game session duration, rhythm? Nothing about the thousands of odd Pakistani accounts liking the page of random family restaurants in the North of Ireland? Some people at Facebook know those very well, but as far as I can tell, no one has connected that issue with a Wil-E-Coyote moment: strong sales out of momentum, filling an inflated inventory but widespread skepticism. There is indeed far more ads in the Facebook mobile thread, but almost exclusively for miss-targeted offers (I recently moved to a different country, twice, and I keep seeing things for local apps in a city 2,400 miles away) and for mobile games with Zynga-like gameplay: pay or… well, you can pay too. I’m not sure Facebook is aware of that; I am sure however that Zynga wasn’t, or at least that the people in charge of the financial stability of the company dealt with that issue in an unethical manner. Seeing both a trend and someone to chosen to reinforce it scares me.
- KaoruAoiShiho 12y ago
  Is this what you're talking about? http://arxiv.org/abs/1401.4270 http://arxiv.org/abs/1401.4270
  - rajacombinator 12y ago
    yea I'm curious about "avalanche thresholds" and how it is a basic thing people should know about. (seems like gobbledegook from my outsider perspective.)
    - bertil 12y ago
      Well, that's how avalanche work in the mountain: you don’t really get any less gobbledegook than pack of snow crushing you or not. In the case of social networks, the idea is to make sense of how people start adopting a behaviour. For that, you have many models, from ‘susceptibility’: a user adopts if it pleases her, as soon as any of her neighbour adopt it; to avalanches: one can’t tell the benefit without using it, so, as a proxy, they use a number of friends using it as a threshold. There are variants, including where users can stop using it; a more obvious one is using the weight relations; a more significant is considering the structure of the network: can one potential consider that their friends using it might be part of the same group (a ‘facet’ to re-use Field’s vocabulary) and does it encourages me to adopt or no, on the contrary. When you talk to people about adopting trends, they usually explain that “every body is doing it”, but if you dig using several examples, “everybody” ends up being a form or another of those model. It might be ‘influencers’ that may of may not be a stable or identifiable group, too. If you are concerned in targeting ads to the right people, understanding which case work for you is key. This is why Facebook tried (controversial) ads indicating that some of your friends were using the service already. But even without that creepy factor of expressly indicating that, you might want to measure whether you have better conversation rate for people with no friends, one friend, two or three, four to nine, ten to twenty, or more than that already using your service. Cases include situation where those friends might know each other, or be part of clusters or cliques (respectively, groups where everyone knows almost- and everyone else). That would allow you to target your advertising to the specific behaviour of your service. I’ve been studying that for the past ten years (so not exactly when Facebook started, but initially on other networks); since, I’ve made considerable efforts to make a complex and counter-intuitive discipline clear enough for any marketing intern to grasp it; I’m not sure “gobbledegook” is exactly how I want it to be described to me.
pyrrhotech 12y ago
I am short, but congrats on a great quarter! Enjoy it while it lasts. I still doubt the company will exist by 2025, but I've been wrong before so who knows.
- jpeg_hero 12y ago
  That's a long time to be short. From my trading days, I've learned the importance off only short term trades when betting against a stock.
  - pyrrhotech 12y ago
    I don't plan on shorting to $0. I went short the day after the Whatsapp announcement at $67. Originally planned to cover around $50, but may cover at any point now. They are definitely rolling and investors are enthused in the short term at least
    - Gustomaximus 12y ago
      What method did you use to short them?
      - pyrrhotech 12y ago
        regular short sale, no options or anything. In Interactive Brokers, just selected 'sell' instead of 'buy' before placing order
    - 001sky 12y ago
      The 'never bet against the Fed' thing is also in play.
ENGNR 12y ago
They've actually pulled a bait and switch on small business. First the pages were free and great, then they started to reduce the number of people who'd see your posts (fair enough, not everyone can see every little thing) Then they reduced the % of people seeing posts to 3% and less, and really focussed on getting those page owners to buy ads to maintain their previous view numbers. Maybe page owners are paying for now, potentially reliant on traffic, but I don't think they're going to be happy paying forever when free alternatives will crop up again. The traffic quality is reported as being low (many mis-clicks on mobile). If the profit isn't there then business won't be able to afford to pay in the long run. Maybe I don't want to see posts for 'Jim's oil change' every three seconds, but good content is getting cut away also making FB far more boring.
- Silhouette 12y ago
  I don't know if I'd call it a bait and switch, because you never really knew exactly what you were getting with Facebook anyway. The kind of auction system they use is practically designed to avoid transparency (and they're obviously not alone in that among on-line ad platforms). It always comes down to the numbers, though. If we're advertising a small business on Facebook, and it generates more in revenues from sales than it costs in customer acquisition, it's still a net win. Is it the best place we could have invested those advertising funds? Maybe, maybe not, but it certainly becomes less attractive as their cost-per-whatever figures go up, and no matter how much they fudge the presentation, we still know how much we paid overall and how much revenue we got in return. In any case, every time this comes up there are plenty of posters who have small businesses and make the above argument, but generate revenues in the 100-200% bracket, i.e., they're at least breaking even and maybe doubling their investment, but no-one's buying the private jet and yacht any time soon. It doesn't take anything shady-sounding like a bait and switch for Facebook to lose all of that business, it just takes increasing cost-per-whatever a bit more until the return on investment is no longer a safe bet. At that point, they lose to other options with either generally better returns (so you don't care about the odd few percent, because you know you're still comfortably winning overall) or a more predictable model (so you can still run it on tighter margins).
  - 12y ago
johnvschmitt 12y ago
Facebook Ads are a real shakedown scam, & getting worse. After reading up on other's experience, I ran an experiment last week: I started a stupid comic blog (http://omgcmon.com http://omgcmon.com). I made a facebook "page" for it too. I posted an link from my stupid comic blog to the facebook "page". I posted the same link to my personal status. The posting didn't even show up in my OWN news feed, unless I changed it from "top stories" to "most recent". (All other posts from me, show up in my "top stories" at least.) My friends & family didn't see it either. But, when I took the same image in the blog post, & put it in facebook as a "Photo", then people saw it, commented, liked, etc. So, it sure does look like Facebook knows that the link was on a "page", & then used it's secret algorithm to suppress it, as it knows that will, over a large population, cause more ad dollars to be spent to boost "pages". So, the money/profit will flow well, but not forever. Run your own experiments if you doubt it. It's not hard to get this data yourself.
- josho 12y ago
  This probably isn't news to you, or anyone that cares about Facebook. I was curious about your description and went to investigate, only to find out that it seems Facebook pages are completely inaccessible unless you are signed on. I recall previously being able to see company or event pages without having signed in previously. I suppose without logging into Facebook you can't make them any money, so why bother giving you any access.
  - kytmizuno 12y ago
    That's untrue. Facebook pages are accessible even when you're not logged in. This loads perfectly fine from an incognito tab: https://www.facebook.com/sears https://www.facebook.com/sears
    - josho 12y ago
      I'm willing to bet at some point Facebook's default permission model changed the defaults for a page from public to private for Facebook users only. Because my experience has been that I could access a lot on Facebook without being logged in, but now its quite rare to be able to do so (at least for smaller pages, something like Sears has the diligence to make sure things are setup correctly).
waps 12y ago
What I don't understand. How do these figures justify a $70 share price ? Companies tend to be valued at 15 * revenue, on large aggregate. With these earnings their PE ratio will go from 72 to 57, assuming the stock price doesn't increase. If this stock deleverages at the same speed as google stock did, over 2 years, the share price will be $35-$30 by the end of the year ... If the pe ratio gets in line with S&P 500 "normal" pe ratio of 15 (actually more like 10-15, but recently it's been nearer 15 than 10), facebook is only worth $17 per share. Now the default argument is "but growth", so I fit a third degree curve to their earnings. So I fit a second-degree curve to their eps (this assumes it's on an exponential growth trajectory, quite generous I would say), and at what point would their valuation become justified at standard S&P 500 ratios ? Q1 2017. This is assuming FB's exponential growth holds up. That's not as bad as I feared it would be, but still it's pretty bad. EPS curve for facebook: 0.005 x^2 - 0.0015 x + 0.12 (x is measured in number of quarters since Q2 2012. Data from streetinsider.com)
- stormbrew 12y ago
  If share prices were determined by a simple mathematical formula based on earnings reports, there'd be very little profit in buying and selling stocks. People (and organizations) who buy fb believe it is undervalued in the long run. They may be wrong or they may be right, but you can't math that perception out of existence.
  - lutusp 12y ago
    The tl;dr: anyone who thinks equity valuations are based on rational decision-making are going to be taken to the cleaners.
    - stormbrew 12y ago
      Well, for a certain definition of rational. I think the operative definition in this subject amounts to roughly "not random," though. People (or nowadays trading bots) have reasons, they just aren't necessarily good reasons.
gcb0 12y ago
i sent a link over their newly acquired IM service... and now all my ads are for the company owning that link. for one side I'm impressed at their speed in incorporating that new window into my privacy. ...or maybe the selling price was so high because that was already a feature? anyway, on the other hand, I'm unimpressed by either their inventory of ads or ability to classify the content they know i know. if they showed me things relevant to that link it would be interesting. they just flooded me with ads for something i might even own already. its like the cheap ad networks on desktop. see one item at amazon, now all sites in the world will show you that item. they just spent billions to race the mobile ads to the bottom from the get go.
- Encosia 12y ago
  Isn't it more likely that the page you visited to get the link had a Facebook "like" button on it that tracked your potential interest at that point?
  - gcb0 12y ago
    nope. typed it on my phone. it was a service i use 2 months ago and a friend asked me about it during the chat

72 points by Kopion 12y ago

Certainly not related to the numbers. They killed it this quarter! They had a NON-GAAP EPS of 34C while estimates were at 24C. That's pretty incredible considering that mobile advertising contributing about 59% of their advertising revenue. That's been the one area that analysts were worried about.

robzyb 12y ago
What is "34C" and "24C"?
- brianbreslin 12y ago
  34 cents $0.34 , earnings per share
exelius 12y ago
It's hard to be an officer in a public company for any significant amount of time. Especially a CFO. You are personally, criminally liable for any fuck-ups your company may make, and that wears on a person. You don't see many CFOs that stick with companies for more than 5-7 years. Undeniably they blew their numbers out of the water. And I don't think his departure has anything to do with the numbers; he's probably just tired.
- camillomiller 12y ago
  In other news Tim Cook officially saluted Peter Oppenheimer today. Apple's CFO of TEN years, Oppenheimer is retiring at the end of semptember. Cook: "He never missed a guidance in ten years. This must be a record among CFOs". :)
pbreit 12y ago
And while revenue was up 72%, income nearly tripled! This is why you invest every penny you have into growing a software company and push profits out as far as possible.
- ZenPro 12y ago
  Facebook is not a software company. http://www.forbes.com/sites/joemckendrick/2012/06/29/rip-software-companies-hello-data-companies/ http://www.forbes.com/sites/joemckendrick/2012/06/29/rip-sof...
  - dredmorbius 12y ago
    In terms of what actually directly provides value, it's less data and more social lock-in. Arguably software is a large driver of the company's value. This is all pretty much an angles dancing on heads of pins argument, though.
  - pbreit 12y ago
    I disagree but will switch to a "near zero marginal cost" company.
- pyrrhotech 12y ago
  that's what they thought in 1999 too. Only works as long as your investors believe your story and are willing to keep injecting cash

ghx 12y ago

The headline should read, "Facebook earnings gain as they insert 82% more ads". There's got to be a point where it just gets too saturated for users, just like Myspace did. Maybe not this time?

randartie 12y ago
Earnings call clearly says ad impressions decreased 17%, but price to advertise has doubled.
Einstalbert 12y ago
As with Skype, I wait for the day when another Facebook competitor becomes ubiquitous enough to warrant switching. I am waiting for pretty much anything, so long as it has the market share with friends and family.
- aaronbrethorst 12y ago
  Well, the most obvious candidate was recently acquired by Facebook, so it might be a few more years.
encoderer 12y ago
Nope. Try again. They're making higher CPCs and CPMs.
- ZenPro 12y ago
  To be fair, those figures have been disputed and also called outright fraudulent by a number of parties. An advertiser recently had an $800,000 invoice struck off because he threatened to sue Facebook. They decided just to let it slide instead of have the public debate.
deleted 12y ago
[deleted]

001sky 12y ago

The world’s largest social network has been on an acquisition tear this year, effectively moving to transform itself into a tech portfolio company. >Interesting take on things ...

ZenPro 12y ago

I fully imagine the descent will even more rapid than the rise. When people congregate; advertisers follow seeking the staggering ROI of the early marketers on the platform. The platform, under shareholder pressure, will accept as many ads as it can until the platform is so saturated the customers leave and the ad ROI plummets. Advertisers are normally last to arrive at the party and also late to leave... I recently saw a photo that demonstrated Facebook has an 8/1 content ratio. For every 1 meaningful piece of content a user is subjected to 8 ads including sidebar + newsfeed. If you include the horizontal scrolling for mobile adverts it rises to 13/1. I think this party just hit it's peak. I deleted my FB a month ago, have not really missed it and a few of my friends have followed. Anecdotal evidence admittedly but no one did it in the usual "I am out!". The deletions were more of a shrug. Personally I find that the most emphatic indictment; when people have just grown bored of your platform.

SDGT 12y ago
Every single week that I sit down and stare at my newrelic monitor, I think the exact same thing: "This is all going to collapse soon." After almost two years of staring at six figure weekly revenue values on the analytics and tracking applications I've built (I obviously am not making this much), I begin to question my inherent concerns on FB's long game.
- ZenPro 12y ago
  From a quantitative perspective I cannot fault them right now but from a qualitative perspective...something is rotten in Denmark. Facebook is not the platform we need, it's the one we deserve right now ;-)
dismal2 12y ago
The collapse will not come from this, it will come when all the companies (gaming mostly) stop making money and can no longer justify spending $10-15 per install. It will all tumble quickly, but not because FB over-saturated their ecosystem with ads.
- 12y ago

bertil 12y ago

I have reasons to believe that Facebook earnings correspond to unstable practice: namely, both brands and games have bad metrics (i.e. uninformative) of their activity, and both are re-considering how their price fan- and user-acquisition. There is a stunning lack of understanding of social network dynamics among Facebook client companies. I have been through a lot of interviews lately, and no one to whom I talked seemed to know basic things like the Friend paradox, avalanche thresholds, or that the first fans are naturally more engaged -- Facebook ad purchase interface doesn’t really help either. Nothing about game session duration, rhythm? Nothing about the thousands of odd Pakistani accounts liking the page of random family restaurants in the North of Ireland? Some people at Facebook know those very well, but as far as I can tell, no one has connected that issue with a Wil-E-Coyote moment: strong sales out of momentum, filling an inflated inventory but widespread skepticism. There is indeed far more ads in the Facebook mobile thread, but almost exclusively for miss-targeted offers (I recently moved to a different country, twice, and I keep seeing things for local apps in a city 2,400 miles away) and for mobile games with Zynga-like gameplay: pay or… well, you can pay too. I’m not sure Facebook is aware of that; I am sure however that Zynga wasn’t, or at least that the people in charge of the financial stability of the company dealt with that issue in an unethical manner. Seeing both a trend and someone to chosen to reinforce it scares me.

KaoruAoiShiho 12y ago
Is this what you're talking about? http://arxiv.org/abs/1401.4270 http://arxiv.org/abs/1401.4270
- rajacombinator 12y ago
  yea I'm curious about "avalanche thresholds" and how it is a basic thing people should know about. (seems like gobbledegook from my outsider perspective.)
  - bertil 12y ago
    Well, that's how avalanche work in the mountain: you don’t really get any less gobbledegook than pack of snow crushing you or not. In the case of social networks, the idea is to make sense of how people start adopting a behaviour. For that, you have many models, from ‘susceptibility’: a user adopts if it pleases her, as soon as any of her neighbour adopt it; to avalanches: one can’t tell the benefit without using it, so, as a proxy, they use a number of friends using it as a threshold. There are variants, including where users can stop using it; a more obvious one is using the weight relations; a more significant is considering the structure of the network: can one potential consider that their friends using it might be part of the same group (a ‘facet’ to re-use Field’s vocabulary) and does it encourages me to adopt or no, on the contrary. When you talk to people about adopting trends, they usually explain that “every body is doing it”, but if you dig using several examples, “everybody” ends up being a form or another of those model. It might be ‘influencers’ that may of may not be a stable or identifiable group, too. If you are concerned in targeting ads to the right people, understanding which case work for you is key. This is why Facebook tried (controversial) ads indicating that some of your friends were using the service already. But even without that creepy factor of expressly indicating that, you might want to measure whether you have better conversation rate for people with no friends, one friend, two or three, four to nine, ten to twenty, or more than that already using your service. Cases include situation where those friends might know each other, or be part of clusters or cliques (respectively, groups where everyone knows almost- and everyone else). That would allow you to target your advertising to the specific behaviour of your service. I’ve been studying that for the past ten years (so not exactly when Facebook started, but initially on other networks); since, I’ve made considerable efforts to make a complex and counter-intuitive discipline clear enough for any marketing intern to grasp it; I’m not sure “gobbledegook” is exactly how I want it to be described to me.

pyrrhotech 12y ago

I am short, but congrats on a great quarter! Enjoy it while it lasts. I still doubt the company will exist by 2025, but I've been wrong before so who knows.

jpeg_hero 12y ago
That's a long time to be short. From my trading days, I've learned the importance off only short term trades when betting against a stock.
- pyrrhotech 12y ago
  I don't plan on shorting to $0. I went short the day after the Whatsapp announcement at $67. Originally planned to cover around $50, but may cover at any point now. They are definitely rolling and investors are enthused in the short term at least
  - Gustomaximus 12y ago
    What method did you use to short them?
    - pyrrhotech 12y ago
      regular short sale, no options or anything. In Interactive Brokers, just selected 'sell' instead of 'buy' before placing order
  - 001sky 12y ago
    The 'never bet against the Fed' thing is also in play.

ENGNR 12y ago

They've actually pulled a bait and switch on small business. First the pages were free and great, then they started to reduce the number of people who'd see your posts (fair enough, not everyone can see every little thing) Then they reduced the % of people seeing posts to 3% and less, and really focussed on getting those page owners to buy ads to maintain their previous view numbers. Maybe page owners are paying for now, potentially reliant on traffic, but I don't think they're going to be happy paying forever when free alternatives will crop up again. The traffic quality is reported as being low (many mis-clicks on mobile). If the profit isn't there then business won't be able to afford to pay in the long run. Maybe I don't want to see posts for 'Jim's oil change' every three seconds, but good content is getting cut away also making FB far more boring.

Silhouette 12y ago
I don't know if I'd call it a bait and switch, because you never really knew exactly what you were getting with Facebook anyway. The kind of auction system they use is practically designed to avoid transparency (and they're obviously not alone in that among on-line ad platforms). It always comes down to the numbers, though. If we're advertising a small business on Facebook, and it generates more in revenues from sales than it costs in customer acquisition, it's still a net win. Is it the best place we could have invested those advertising funds? Maybe, maybe not, but it certainly becomes less attractive as their cost-per-whatever figures go up, and no matter how much they fudge the presentation, we still know how much we paid overall and how much revenue we got in return. In any case, every time this comes up there are plenty of posters who have small businesses and make the above argument, but generate revenues in the 100-200% bracket, i.e., they're at least breaking even and maybe doubling their investment, but no-one's buying the private jet and yacht any time soon. It doesn't take anything shady-sounding like a bait and switch for Facebook to lose all of that business, it just takes increasing cost-per-whatever a bit more until the return on investment is no longer a safe bet. At that point, they lose to other options with either generally better returns (so you don't care about the odd few percent, because you know you're still comfortably winning overall) or a more predictable model (so you can still run it on tighter margins).
- 12y ago

johnvschmitt 12y ago

Facebook Ads are a real shakedown scam, & getting worse. After reading up on other's experience, I ran an experiment last week: I started a stupid comic blog (http://omgcmon.com http://omgcmon.com). I made a facebook "page" for it too. I posted an link from my stupid comic blog to the facebook "page". I posted the same link to my personal status. The posting didn't even show up in my OWN news feed, unless I changed it from "top stories" to "most recent". (All other posts from me, show up in my "top stories" at least.) My friends & family didn't see it either. But, when I took the same image in the blog post, & put it in facebook as a "Photo", then people saw it, commented, liked, etc. So, it sure does look like Facebook knows that the link was on a "page", & then used it's secret algorithm to suppress it, as it knows that will, over a large population, cause more ad dollars to be spent to boost "pages". So, the money/profit will flow well, but not forever. Run your own experiments if you doubt it. It's not hard to get this data yourself.

josho 12y ago
This probably isn't news to you, or anyone that cares about Facebook. I was curious about your description and went to investigate, only to find out that it seems Facebook pages are completely inaccessible unless you are signed on. I recall previously being able to see company or event pages without having signed in previously. I suppose without logging into Facebook you can't make them any money, so why bother giving you any access.
- kytmizuno 12y ago
  That's untrue. Facebook pages are accessible even when you're not logged in. This loads perfectly fine from an incognito tab: https://www.facebook.com/sears https://www.facebook.com/sears
  - josho 12y ago
    I'm willing to bet at some point Facebook's default permission model changed the defaults for a page from public to private for Facebook users only. Because my experience has been that I could access a lot on Facebook without being logged in, but now its quite rare to be able to do so (at least for smaller pages, something like Sears has the diligence to make sure things are setup correctly).

waps 12y ago

What I don't understand. How do these figures justify a $70 share price ? Companies tend to be valued at 15 * revenue, on large aggregate. With these earnings their PE ratio will go from 72 to 57, assuming the stock price doesn't increase. If this stock deleverages at the same speed as google stock did, over 2 years, the share price will be $35-$30 by the end of the year ... If the pe ratio gets in line with S&P 500 "normal" pe ratio of 15 (actually more like 10-15, but recently it's been nearer 15 than 10), facebook is only worth $17 per share. Now the default argument is "but growth", so I fit a third degree curve to their earnings. So I fit a second-degree curve to their eps (this assumes it's on an exponential growth trajectory, quite generous I would say), and at what point would their valuation become justified at standard S&P 500 ratios ? Q1 2017. This is assuming FB's exponential growth holds up. That's not as bad as I feared it would be, but still it's pretty bad. EPS curve for facebook: 0.005 x^2 - 0.0015 x + 0.12 (x is measured in number of quarters since Q2 2012. Data from streetinsider.com)

stormbrew 12y ago
If share prices were determined by a simple mathematical formula based on earnings reports, there'd be very little profit in buying and selling stocks. People (and organizations) who buy fb believe it is undervalued in the long run. They may be wrong or they may be right, but you can't math that perception out of existence.
- lutusp 12y ago
  The tl;dr: anyone who thinks equity valuations are based on rational decision-making are going to be taken to the cleaners.
  - stormbrew 12y ago
    Well, for a certain definition of rational. I think the operative definition in this subject amounts to roughly "not random," though. People (or nowadays trading bots) have reasons, they just aren't necessarily good reasons.

gcb0 12y ago

i sent a link over their newly acquired IM service... and now all my ads are for the company owning that link. for one side I'm impressed at their speed in incorporating that new window into my privacy. ...or maybe the selling price was so high because that was already a feature? anyway, on the other hand, I'm unimpressed by either their inventory of ads or ability to classify the content they know i know. if they showed me things relevant to that link it would be interesting. they just flooded me with ads for something i might even own already. its like the cheap ad networks on desktop. see one item at amazon, now all sites in the world will show you that item. they just spent billions to race the mobile ads to the bottom from the get go.

Encosia 12y ago
Isn't it more likely that the page you visited to get the link had a Facebook "like" button on it that tracked your potential interest at that point?
- gcb0 12y ago
  nope. typed it on my phone. it was a service i use 2 months ago and a friend asked me about it during the chat