Originally Posted By Jim in Merced CA What is the deal, do you suppose? After the bungled IPO, the stock continues to slide, now at under half of its value. What do you make of it?
Originally Posted By WilliamK99 Facebook was overvalued at the start. I see It continuing to crash and burn, as there are still many questions on how long it can exist with it's current.format.
Originally Posted By TomSawyer People who are placing ads through Facebook are seeing what they think are fraudulent click-throughs of their advertisements. <a href="http://www.computerworld.com/s/article/9229797/Facebook_spars_with_advertiser_over_click_fraud_allegation" target="_blank">http://www.computerworld.com/s...legation</a> The more clicks an ad gets, the higher the amount that Facebook can charge for them.
Originally Posted By SingleParkPassholder I saw someone say on Maher's show when the IPO first came out that they wouldn't touch Facebok with a ten foot pole because Facebook doesn't MAKE anything. It has no tangible product. When you can't see the results of its labors it should raise concerns. It was the one thing that everyone on that night's panel could agree on. I'm not financial guy, but that opinion makes total sense to me. I'm not in Facebook, so maybe I'm biased, but it seems that going public could very well be the beginning of the end for Facebook. It was a fad, and fads die. many people thought Myspace was here to stay, and now that lace is a ghost town. As a public entity that now needs to continually try to grow its business and profits due to responsibilities to shareholders that previously didn't exist, Facebook and Zuckerberg might have let their greed kill the goose that the golden egg.
Originally Posted By TheRedhead "I saw someone say on Maher's show when the IPO first came out that they wouldn't touch Facebok with a ten foot pole because Facebook doesn't MAKE anything. It has no tangible product. When you can't see the results of its labors it should raise concerns." I worked on Wall Street when the internet boom happened (and left when the bust happened). When Amazon went public, people I worked with said the exact same thing as what's above. They don't make anything. Don't go near it. "It won't go over $50." Then it did. "It won't go over $100." Then it did. I knew a guy who finally caved and bought his clients stock at $150 a share, against his better judgement. They made a killing. sniff. I kinda' miss those days. Before the IPO, a friend of mine asked if he should put 10 grand on Facebook stock. I told him to go to Atlantic City instead. Same thing, but you get a free drink. Now I look like a genius.
Originally Posted By HRM ^^^^ State of California now worried becuz some of the revenue projections were based on the initial IPO of Facebook.... now it looks like tax payments will be CONSIDERABLY LESS due to falling stock price.
Originally Posted By barboy ///now it looks like tax payments will be CONSIDERABLY LESS due to falling stock price/// Cool!
Originally Posted By gurgitoy2 Amazon is a little different. They are funneling a product, and they make money on that. They might not create things...well, they didn't, but they are a portal to buy stuff. Facebook is not. They don't make or sell anything. It's al based on ads and other companies' games.
Originally Posted By SingleParkPassholder I was going to say essentially the same thing as post 10. IIRC, Amazon started out as selling mostly books and then eventually partnered with a zillion other retailers. Even a casual finance guy like me can see along the way in their business food chain where they get a cut of the money changing hands. But Facebook? Not so much. Whoever runs Facebook now HAS to think of the shareholders first, THEN somewhere after that the users of that site. Going public requires it. Good luck with that.
Originally Posted By ecdc I have mixed reactions. I don't think you can compare FB to previous ventures like MySpace because FB has far, far more broad users - it crosses class, race, and is worldwide. Also, I think the notion that "I can't see their product" (I saw that Maher too and thought it was an interesting point) is going to have to be rethought in the digital age. Eventually DVDs and blu-rays will go the way 8-tracks and cassettes. It will all be online streaming and downloads. Is there a physical product there? Maybe - you're watching images on a screen. But, so it is with FB - you're seeing your friend's photos, etc. There's a product of some kind there. It's just a matter of finding out what consumers of digital products are willing to tolerate. Right now, they'll tolerate FB. OTOH, I don't see how FB's current business model can be sustainable. Online ads just aren't going to cut it. I'm not at all a financial guru, but it sounds like FB's value was calculated by figuring out the cost they charge for ads, figuring out the number of users who see them, and then doing the math. But like newspapers and a billion other free online ventures have found out, online ads do not generate nearly enough revenue. Not even close. FB will have to come up with something else. And charging users seems like a disastrous move to me. Which leaves, what?
Originally Posted By WilliamK99 And charging users seems like a disastrous move to me. Which leaves, what?<< I think you'll start seeing "Premium" memberships within the next 6 months, you pay so much per year for additional services. This is really the only option FB has to get a steady stream of profit that is not ad related. The key is to strike a balance and give premium members something substantial without ticking off the free members.
Originally Posted By Kar2oonMan >>Also, I think the notion that "I can't see their product" ... is going to have to be rethought in the digital age.<< Very much so. The "product" is the ability to share commentary and photos and videos with friends. And "friends." So just because it isn't a physical product doesn't mean that there's no product at all. The value of it to me is mostly about whether or not this is indeed THE new way people choose to communicate online, or whether it is a huge fad. I think the layout is terrible and it is not very intuitive, especially when it comes to privacy settings. And yet, approximately 9 trillion people are on Facebook now. There MUST be a way to monetize that, right?
Originally Posted By TomSawyer They monetize it by collecting information on the 9 trillion users and selling it to marketing firms. The whole reason for the "likes" button is to build your profile as a consumer. And by tying you to your friends and contacts, they are able to keep adding on to your profile even if you don't "like" anything. If all of your friends "like" Disney, odds are you like it too. The layout is terrible because they know that once you know where the ads on a page are you tend to ignore them. I'm here every day lately, and I know that there are ads on the left side of the screen but I don't remember the last time I looked at them. I don't block them - they just don't register. Facebook changes their layout so you see the ads. They put the ads in your stream so you see them. I think William is right - there will be a Facebook Premium service in a few years.
Originally Posted By Autopia Deb And I'm sure one of the perks to the premium service will be that it's add free, at least at the top level if it's a multi-tier membership.
Originally Posted By Jim in Merced CA <I think you'll start seeing "Premium" memberships within the next 6 months, you pay so much per year for additional services.> Seems like that's what newspapers have been trying to do for 10 years now -- and to no avail. As the owner of a website where 'premium service' is an option, I can tell you that when faced with even a small upgrade, people typically just say forget and stay the free route. "Free begets Free"
Originally Posted By ecdc When you work at 5AM on the weekends, it gives you a lot of free time to peruse the interwebs.... <a href="http://www.slate.com/articles/arts/books/2012/08/history_of_the_mp3_by_jonathan_sterne_reviewed_.single.html" target="_blank">http://www.slate.com/articles/...gle.html</a> Here's an interesting book review on the digital age. It's centered around the emergence of MP3s, but touches on these same philosophical notions of a physical product vs a digital one. In discussing the music industry, the author makes an interesting point: the money is still there, it's just lining different pockets.
Originally Posted By mawnck >>Here's an interesting book review on the digital age.<< As a record collector, let me state for the, uh, record that that article is one of the most clueless and infuriating screeds it has ever been my intense displeasure to suffer through. Somebody tell that kid his mother's calling him, and he's going to have to take a break from missing the point. I enjoyed it immensely. Thanks for the link.
