4 ms·

Facebook's business model is busted. Costs are higher than revenue per user. The model has to change, become a search gateway, start selling products peopl

by marltod 17y ago

Facebook's business model is busted. Costs are higher than revenue per user. The model has to change, become a search gateway, start selling products people want to buy, or cut costs features and charge high bandwidth users.

zaidf 17y ago
What you said is common for many homeruns. Amazon lost money for a long time. YouTube too. PayPal too. And yet fb is about to breakeven or hit profitability. Bust? Not really.
electromagnetic 17y ago
Facebook should be cornering its games market with online payments. Charge $5 for 450 'game points', basically you charge $5 for 450 real-world equivalent 'cents' that you can spend arcade style in whatever game you want. No facebook game will ever get a payment from me while they're relying on third party providers. There's a slim chance they'll get my money through paypal (since I've had a paypal account longer than I've had a facebook account), but as the money you pay goes into solely one game there's no interoperability. Every developer is stuck developing their own way to implement credits using companies that have no reason to care. People are going to trust facebook, but they're not going to trust 'cherry credits' or whatever suckass companies you know nothing about that you're signing your credit card information over to. Facebook is already trusted by its users (or they wouldn't be users), which gives them an unbelievable edge without them having to play unfairly against the other game credit providers.
- ryanwaggoner 17y ago
  People are going to trust facebook, but they're not going to trust 'cherry credits' or whatever suckass companies you know nothing about that you're signing your credit card information over to. Judging by the ridiculous amounts of money that social gaming companies are hauling in, this is clearly not true.
  - electromagnetic 17y ago
    Actually the social gaming companies that are actually hauling any real money in (IE Zynga) sell their credits themselves. You either pay Zynga directly by credit card, or you can pay indirectly through paypal. Those are the only two options, but as for games on facebook the points are still only going into a single game and cannot be used in different games by one developer, or in games by different developers, like a facebook controlled 'currency' could. Essentially, it would be if Apple didn't allow you to put money onto your account. You instead have to use your credit card to make a transaction on every single song purchase. It would be stupid, and Apple wouldn't make nearly as much money as it could. > We’ve found once you get into these digital-only goods and services there’s massive opportunity for fraud. We couldn’t find a single company that could manage or solve that problem for us. We had to build the whole infrastructure in-house. We had to go out and get relationships with credit-card processing companies. - Mark Pincus Facebook would have a unique opportunity to step in and dominate this market. If Zynga cannot control these transaction companies, how can smaller developers? Like I said, tapping into this market could mean Facebook could not only boost revenues to many of these social gaming companies, but it could be taking profits off of every transaction. 5/6ths of Zynga's users are from social networking sites, meaning Facebook could easily take profits from 5/6ths of Zynga's users by being trustworthy. There are then plenty of other developers in the market, especially thousands of smaller developers, who could make Facebook hundreds of millions that they're not tapping.

by marltod 17y ago

zaidf 17y ago

What you said is common for many homeruns. Amazon lost money for a long time. YouTube too. PayPal too. And yet fb is about to breakeven or hit profitability. Bust? Not really.

electromagnetic 17y ago

Facebook should be cornering its games market with online payments. Charge $5 for 450 'game points', basically you charge $5 for 450 real-world equivalent 'cents' that you can spend arcade style in whatever game you want. No facebook game will ever get a payment from me while they're relying on third party providers. There's a slim chance they'll get my money through paypal (since I've had a paypal account longer than I've had a facebook account), but as the money you pay goes into solely one game there's no interoperability. Every developer is stuck developing their own way to implement credits using companies that have no reason to care. People are going to trust facebook, but they're not going to trust 'cherry credits' or whatever suckass companies you know nothing about that you're signing your credit card information over to. Facebook is already trusted by its users (or they wouldn't be users), which gives them an unbelievable edge without them having to play unfairly against the other game credit providers.

ryanwaggoner 17y ago
People are going to trust facebook, but they're not going to trust 'cherry credits' or whatever suckass companies you know nothing about that you're signing your credit card information over to. Judging by the ridiculous amounts of money that social gaming companies are hauling in, this is clearly not true.
- electromagnetic 17y ago
  Actually the social gaming companies that are actually hauling any real money in (IE Zynga) sell their credits themselves. You either pay Zynga directly by credit card, or you can pay indirectly through paypal. Those are the only two options, but as for games on facebook the points are still only going into a single game and cannot be used in different games by one developer, or in games by different developers, like a facebook controlled 'currency' could. Essentially, it would be if Apple didn't allow you to put money onto your account. You instead have to use your credit card to make a transaction on every single song purchase. It would be stupid, and Apple wouldn't make nearly as much money as it could. > We’ve found once you get into these digital-only goods and services there’s massive opportunity for fraud. We couldn’t find a single company that could manage or solve that problem for us. We had to build the whole infrastructure in-house. We had to go out and get relationships with credit-card processing companies. - Mark Pincus Facebook would have a unique opportunity to step in and dominate this market. If Zynga cannot control these transaction companies, how can smaller developers? Like I said, tapping into this market could mean Facebook could not only boost revenues to many of these social gaming companies, but it could be taking profits off of every transaction. 5/6ths of Zynga's users are from social networking sites, meaning Facebook could easily take profits from 5/6ths of Zynga's users by being trustworthy. There are then plenty of other developers in the market, especially thousands of smaller developers, who could make Facebook hundreds of millions that they're not tapping.