It looks like Europe is in love with Facebook…First the Samwer Brothers invested in the company, and now reports that Nokia is joining the round, too.
Paid Content is quoting sources that claim that Facebook and Nokia may be close to a deal which sees Facebook offered on Nokia phones as a default and in return Nokia may take a stake in Facebook.
On the content side, offering a Nokia mobile specific version of Facebook will be a positive in driving Facebook use on the mobile web. MySpace has gone down the path of carrier deals, where as a Facebook/ Nokia deal would be carrier agnostic, and given that Nokia is still the largest cell phone provider worldwide the deal would spread Facebook into new markets.
The investment side isn’t that surprising given how many companies have now bought into the Facebook phenomenon. The remarkable part is how many companies are willing to invest in Facebook at a $15 billion valuation. At best Facebook may be worth even more than that, particularly when you consider sites like Baidu have a market cap in excess of $9 billion.
We don’t know when Facebook may move to an IPO; in his 60 Minutes interview a week ago Mark Zuckerberg said that it might be this year, or next year, or even 2010. What we do know is that an IPO in the current market will unlikely provide a strong valuation for Facebook. Since the beginning of year markets worldwide have taken a hammering, with the market in Australia at least recording its worst new year drop in history according to some reports. Google stock is down from its $741 peak to $600 a share. My prediction is that unless the market picks up (and that’s unlikely given all the US recession talk) Facebook wont IPO this year. 2009/ 2010 at the earliest, presuming that the market eventually recovers.
how about apple iphone?
Keep blowing that bubble!!
At best, Facebook is what Classmates.com wishes they could be: a way to keep in touch with people you otherwise don’t care about. Consider this alongside their lackluster operations management (lack of rigorous testing, platform failures in the middle of the day, poor communications) and you have the makings of a bubble waiting to burst.
“My prediction is that unless the market picks up (and that’s unlikely given all the US recession talk) Facebook wont IPO this year. 2009/ 2010 at the earliest, presuming that the market eventually recovers.”
Definitely agree with this Duncan.
An investment at that $15B valuation is nothing less than idiotic.
1) When MSFT made investment in FB, YHOO was trading at $25/share. That is 20% higher than todays price. No way is FB worth 55% of Yahoo’s valuation of $27B today.
2) Yahoo has revenue of over $6.5 BILLION. FB generated $150M.
3) Yes, FB is growing. But, YHOO has a real business and FB is trying to figure out how to make money
3) Competition: FB has more competition than YHOO. YHOO has to deal with GOOG, MSFT and ASK. FB has to deal with the 15+ social networking sites plus GOOG and ASK(soon).
I think you’re correct. FB won’t IPO at least until late ‘09 or ‘10.
Before FB goes public, users will tire of it and move on. Lots of users will remain, but go to inactive. Implosion is coming.
FB is scamming even more companies out of their money. These guys need a REAL revenue stream! Other companies can’t just keep on giving them money at overinflated valuations forever.
@Alex #4 – I couldn’t agree more.
IMHO M$ was just too afraid to let FB fall in the hands of Google. Hence the hefty price.
Now FB is left with the daunting task of proving everybody it can earn 700m this 2008(as what they have projected). If they do, an IPO by 2009 or 2010 will be feasible.
too bad it’s not Motorola – better OS/hardware quality
I find it interesting that there have been two news items in this last week regarding investment in Facebook, firstly the Samwer brothers and now possibly Nokia. Is it possible that they are feeding out this news to make Facebook even more attractive to invest in when it does go public??
I do agree with Duncan though, with a recession in the US very much on the cards, I think it will be a little while before we can invest in Facebook.
Investing by Microsoft/Nokia/etc. has nothing to do with valuation. It has everything with getting a slice of potentially large revenue streams from FB’s ecosystem – if anything high valuation is an ADVANTAGE locking out other partners.
Facebook is doing nothing but building a dot com sort of business, though I think the company itself won’t go for broke. I agree with comments above that they are in the very early stages of their business and are still figuring out how exactly to make money. It is easy to get swept up in the excitement and growth, but the valuation of Facebook is a little on crazy side.
Even if our economic ground was not shaky I would still not invest in Facebook, the fundamentals are not there. Every social network goes through this cycle, look at MySpace in the US. It was the new it thing, cash got injected, greed took over and now users practically flee from it. I hope Facebook has a plan because pretty soon the high will wear off.
That large companies are choosing to invest in Fb at a $15 billion valuation speaks more to their sense of desperation than anything else.
Fb’s ability to make serious money, especially in light of how it bungled some of their ad network aspects, is a mystery to me. At least their venture capital firms are looking good on paper…
Why would the owners of FaceBook want to give someone else a piece of the pie?
Baidu’s $9B market cap indeed amazing (though not super amazing)..
I think Nokia will publish FB as a “widset” in it´s widsets.com platform.
In some continents Widsets is already preinstalled almost every Nokia phone since December 2007.
Well, you know money isn’t everything (lol)… No actually it isn’t. By investing into Facebook companies like Nokia and Microsoft are buying into the information provided by Facebook on it’s users. Such information has never been available before, especially after they launched Beacon. Think about it. If you fill in all the required information, Facebook will know more about you than most people you know. Also, it does away with the inaccurate answers people normally submit in marketing questionnaires, simply because they are not aware that they are filling one. So Facebook, of all the dotcoms, will not need much revenue, due to the value of the information it gathers on its users for other companies and governmental bodies.
@10 MATT…
You nailed it on the head! Its shocking that this isn’t apparent to most people.
A stake in FB to certain companies is a priceless gamble. They are not trying to own a stake so that if/when FB becomes a revenue source they too can share in the benefits and see an incredible ROI. What they are doing is trying to solidify a relationship (as exclusive as possible) so that as FB carves out their experimental business model these companies will be able to couple themselves to it somehow. Its more of a bribe than an investment.
Companies like Microsoft and Nokia are essentially saying “We will pay you a few hundred million to establish the beginnings of what will be a mutually beneficial and exclusive relationship. A small portion of your company will be an added benefit and you can use that to broadcast a large valuation to the world to further legitimize your business despite an unproven and incomplete model”.
Facebook would like to continue to OWN and exploit their users private data without sharing in these profits and simply providing a useful service. Unfortunately, consumers are quickly learning that this may be something to be concerned about. There is a fast growing demand for openness that will hurt their walled garden philosophy. At somepoint an open and selfless alternative will arise and Facebook will shrink in order to remain a viable player for the long run. The catch 22 will lead to the inevitable deflation of facebook.
How about SAMSUNG mobile?
How about LG CYON?
Made in KOREA.
I think I should register with facebook now!
Always nice to see people with too much money throwing it into an impending dark hole… the only person gaining from all this is the owner of Facebook while he laughs all the way to the bank.
Jon
http://woodmarvels.com – Create Unique Memories
I heard Apple and Facebook may be teaming up for same.
i like facebook too much
Why would the owners of FaceBook want to give someone else a piece of the pie?
Why isn’t FB just charging users for a non advertising version. I will pay $20 per year
I agree with Duncan Riley on this one.
http://simongeo...googlepages.com
i can’t wait til Facebook goes public. I’m going to naked short the sh*t out of it
You’re gullible Finns… bitch
Although a Facebook/Nokia deal looks good for both parties, Nokia needs to remember its core market strengths. Ominously, however, the phone giant is so bamboozled by the greedy webtards that it looks set to be taken to the cleaners again. According to Moconews:
“The deal involves giving Facebook a major slot within Nokia retail products’ displays.”
Picture yourself at the negotiating table. In such deals, it’s traditional for the service provider to pay the gatekeeper for access to the users – not the other way around. Remember that Facebook has no mobile experience, and can offer no evidence that Facebook is anything other than a sitdown, PC-based leisure activity. Nokia has close to a billion users, while Facebook has just 50m regulars. In other words, Facebook should be paying Nokia for prominent placement on its handsets – and not the other way around.
If Nokia thinks it needs to throw shareholders’ money down the drain for an inflated equity stake in Facebook, rather than seeing it as a revenue stream, then the Nokia executives really are where Mark “I’m CEO… bitch” Zuckerberg wants them.
http://www.ther...book_dumb_deal/
From this union a great company can arise. To the technology being both can take to the market innovating ideas….
Facebook has already create a great mobile version of their site for the iPhone. Choosing Nokia as a partner is essentially a no-brainer since Nokia uses the same browser engine (WebKit) as the iPhone:
http://webkit.o...webkit-sources/
In less than 30 seconds, a Facebook engineer can allow the iPhone interface to work on the Nokia (by recognizing the Nokia browser user agent.)
If Facebook receives anywhere near the amount of investment from Nokia that they received from Microsoft, that could be the most valuable 30 seconds in history!
facebook is already passe among young europeans. they’re all there but they no longer do much with it. nokia has people in ivory towers in the valley and they’re in a funny position to not get it.
So far this story overlooks one major flaw in the issue – mobile internet in Europe is underutilised and frankly, not very easy to use. Bandwidth is low, mobile browsers are not great and don’t have a unified standard, and looking at pages is fiddly. What this deal offers to Nokia I have no idea.
In such deals, it’s traditional for the service provider to pay the gatekeeper for access to the users – not the other way around.
Companies like Microsoft and Nokia are essentially saying “We will pay you a few hundred million to establish the beginnings of what will be a mutually beneficial and exclusive relationship. A small portion of your company will be an added benefit and you can use that to broadcast a large valuation to the world to further legitimize your business despite an unproven and incomplete model”.