Last October we wrote about how Facebook’s breakaway growth combined with a declining advertising market was forcing the company back to the capital markets.
The company has been all over the place with on record comments about fundraising since that post.
In November Founder Mark Zuckerberg firmly said “No” in response to the question ““Do you need money?”
But in December Zuckerberg told me the company was open to raising more capital, but only at the previous $15 billion valuation:
We discussed Facebook fundraising issues and valuation. He said some of the speculation was true and some wasn’t. he confirmed that Facebook’s $15 billion valuation round was still open and that CFO Gideon Yu was open to new investors at that price. But he denied that Facebook was pitching for new money at a lower valuation. “We’re not actively going around trying to raise money from a lot of different people. It’s more just a follow on to that [previous round].”
Fast forward to last month, when Facebook board member Peter Thiel told BusinessWeek the company did not need to raise any more money and had sufficient cash to continue at its current growth rate. And then yesterday BusinessWeek reported that Facebook is looking to raise new debt capital to replace a $100 million line of credit.
So Are They Raising Money Or Not?
Yes, they are.
eMarketer projects Facebook revenues of $230 million in 2009. Our sources say this is way low, and that Facebook will hit at least $300 million in 2009 revenues. But the costs of running this ginormous company are staggering. Facebook may be burning though $20 million or more per month, even on top of revenues.
The problem with Facebook’s growth is that it’s all international, and those users just aren’t as profitable to the company (see our model from last summer).
Our sources tell us that Facebook probably has around $300 million left in cash. If growth were to freeze at this point they’d have 15 months or so of runway. With their staggering growth rate, it may not last that long.
We’re hearing they plan on raising money sometime this year to give themselves enough cushion to get to an IPO, or at the very least get through the economic downturn. Our sources say they’re pitching the company at a $10 billion valuation, but would be “thrilled” with a $5 billion valuation.
Google Thinks Facebook Is Worth $2 Billion.
We’ve also heard that there have been very low level conversations between Google and Facebook around an equity investment or outright acquisition. But these conversations never made it to the senior execs at Facebook. Perhaps because Google’s internal modeling may have valued Facebook at just $2 billion. There’s no way Facebook is going to take that valuation without a fight.
So what will happen? Our guess is Facebook will take as much debt as they can to give themselves some breathing room. If revenue growth is as healthy as we’re hearing it is the company may be able to justify a higher valuation when they inevitably do take more equity funding. The big question is, what exactly will Facebook’s next valuation be?
Update: A new source now tells us that Facebook’s internal revenue projections for 2009 are over $400 million, much of which is driven by the self serve ad system. We’re also getting confirmation on Facebook’s $300 million in current cash.
The deadpool is bubbling.
Please. Facebook will be around for a long, long time.
Tell that to Friendster.
Yes, Facebook, the new Friendster
That’s the result of running such large application with PHP.
They are probably using twice the servers they could have used with better scalable technology, and twice the IT staff they could hire.
Since storage is extremley cheap now days- it can’t be the bottleneck of their cashflow.
Applications using less resources and fewer developers to maintain them could make the difference between burning cash to gaining profits.
strategic niche social channel gateways and there ability to communicate is whats gonna change the game. (language+location=result)
OpenLocator.com – full bore
@Gandalf
Probably trolling, but obviously a not a programmer. Facebook is on the cutting edge of scalability (they contribute to memcache as well as several other open source alternatives). Hell, they serve more photos than any other website on the planet, and quikly.
A programming language ultimately has very little to do with scalability as any language will hit hardware bottlenecks (not bandwitdh bottlenecks) well before they’re pushing an interpreted language to the limits.
Yo update, 300 million in cash. Facebook runs mostly on ajax, which is very less server costs, and they can cut bandwidth further at their discretion. Another is to charge for fb API, for apps/connect that take more than 1GB per month.
FB ads need to be improved, my suggestion is mouse-over extra text details of the ad.
Arrington seems craving for fb to go bankrupt, since long. Let him keep dreaming.
I, for one, would not mourn much if Facebook did land in the deadpool… Hell, I’ll help you strap the concrete blocks to it before you toss it in.
(My dislike for Facebook stems mostly from how they treat their users.)
spook, just curious, what do you like besides facebook (not just on the customer service side)?
I find Facebook much better than google in terms of treating users…
will donate the concrete blocks.
Noteworthy: Despite its large user base, no one would ever deem Facebook too big to fail. People would create a new FB group “Pleeeeez save Facebook”, mourn for a day and then just move on to another network. Compare this to Microsoft, Apple, Google.
deadpool coming soon.. they raise way more money then the profit…. I mean they better come with a strong business model because they won’t be able to handle all those new users… I mean videos and photos and now live feeds… I wiould like to see those servers bills….
I bet you also believe the Detroit three will be around for a long, long time.
It would be surprising if a community website with 275M users will ever deadpool.
The very worst case would be an acquisition at a (relatively speaking) low valuation.
Pierre
Didn’t AOL have a huge following???? (Before your time?)
The users will bolt as soon as the next generation finds a new niche/gimmick… (yes these social sites are gimmicks – but I like them if they generate positive revenue) The “can’t happen here” attitude is a guarantee of failure.
But you are right on one thing… before they go under, there will be a sucker who will buy them. Maybe Sears????
Didn’t people say yahoo would fold and Yahoo has way more e-mail users than anyone. Yahoo has far more stickyness with e-mail than facebook ever will with profiles and photos. The reason people will abandon facebook is because of boredom and privacy, but people will always need e-mail. Plus Yahoo has far more revenue than facebook.
@yestoyahoo
dude, I have 20+ msn, and yahoo emails. How do you think I sign up to all those porn sites again, when my share ratio falls below the required levels?
absolute numbers are meaningless. you have to measure activity.
I guess no one factors in the service facebook provides, which is a superior method of exchanging information and communication with your real life relationships.
Friendster failed because it was mismanaged and designed horribly. And Myspace is failing because they have migrated away from the core use of social networking. As long as facebook remains pure, it’s here to stay.
“The users will bolt as soon as the next generation finds a new niche/gimmick.”
That new gimmick is Twitter. Twitter will inherit the Earth. It’s the most addictive social site in human history. It puts whatever that thing the cast of TNG was playing in the episode “The Game” to shame.
Estimated Facebook costs:
$1 to set up a user position.
$.03 per month to service each user.
Lets say they have 200 million users.
Lets put growth at 18 million users per month.
Total new costs per month $18 million
Total existing costs $6 million
Total monthly costs = $24 million
So if they need cash then they are making less than 10 cents per month per user.
When growth flattens they’ll make a (smallish) profit, but this isn’t a big revenue business, just a big business. Different things.
Facebook does not know how to monetize. This is an issue thats been around for a while and it isn’t going away.
Not Deadpool material, but a 3.5 Billion value??? Try applying the mark to market rules on this little baby)))
I reckon less than $1 per year in revenue per user, which means about 200 million per year. So a $15 bln value means that investors get their money back in…wait for it….60 years…60 YEARS!!!!
someone please make sure that Gideon and Mark are not around any sharp objects please..
I agree here. Facebook is way over-valued.
Advertisement? Ha! It is way better to do paid ads with Google, Yahoo or Microsoft because of wider exposer plus, they do have researchers dedicated to reasearching of how to improve online ads. When you have an individual or a small group of dedicated researchers doing this all day (original research about online advertisement), then it means that they’re better (no doubt about it).
The consolidation of power begins.
Hahahaha – I love it. Jumping so quickly to these things brings me such joy. You are probably right.
When you combine Facebook with Google, you get:
The Ultimate Big Brother System.
Wait, what?
“If growth were to freeze at this point they’d have 15 months or so of runway.”
Seriously? I was under the assumption all that cash went to fuel growth and otherwise they could be profitable.
Seems like somebody should have sold when they had the chance, doesn’t it?
apparently, you people have not followed bank stocks last year…or newspaper stocks…or yellow page stocks.
Even public companies with completely open financials have suffered 80-90% declines in valuation in a matter of days…Bear Stearns, Lehman…valuation is a tricky beast and it really can be that wide especially on private companies. Also, one of the basics for entrepreneurs in understanding valuation is to understand how preferred securities work. An investor that invested at a $15 billion valuation might not lose any money if the company gets sold for $2 billion. Here’s how: If I invest $100m at a $15b valuation, I get preferred securities with a liquidation preference. This means all of the investors get their money first in the event of a sale or acquisition. As long as Facebook can be liquidated for more than the sum of capital raised, the money is basically safe. In a nutshell if I invest $10,000 as the sole investor at a $1 trillion valuation…if the company sells for $20,000 ultimately, I will get my original $10,000 back before the pro rata distribution. So the valuation doesn’t matter if the worse case scenario is MSFT will pay a couple of billion for it.
right, and like i said, seems like somebody should have sold out a long time ago…BTW, those following investment banks closely (LEH, BSC) would know those financials were not “completely open.”
I find it crazy how a company can be valued anywhere from $2 billion to $15 billion.
“a company” or “the company”
The term “the company” refers to Facebook
or a company -> meaning any random company, like Facebook…
Any company could have a value variance but not a variance of 13 billion. Completely absurd.
hahahahahahah
A year ago, Citigroup’s valuation (market cap) was $400 billion. Now it’s $14.4 billion.
That’s what is called capitalism
.
With the insane increase in userbase, Facebook will not be able to handle the cost by the end of the year unless they come up with a business plan that sticks.
Like what Mark Z said before, this year will be a make or break year for Facebook and by the sound of it, it does not look good.
They can only go on for so long with extra $100 million. They are burning a ton of cash every month on server cost and labor. I predict there will be some layoffs as well.
How can they layoff when they are growing so fast? Seems to me they will need to hire more people just to keep up with growtn.
considering 20 milion in expenses per month (and sure hope that execs salaries are included in this number) and 300 million in revenues per year still gives them 60 million in positive balance. then you have 500 million in funds left…. i dont think facebook is going anywhere anytime soon. unless everyone wants to get greedy again.
that was 20m in losses, not expenses…there is quite a difference…may want to rework your numbers
wait, you are right, thats on top of revenues….. well, in that case facebook is f*cked! haha
Also when the company says 20MM in losses, you have to take it with a grain of salt and assume the real number is 30-40MM in losses.
Now even if we go with the number 20MM in losses, it is with the current number of users. Imagine, with increase in the number of users by the end of the year, Facebook will be looking at getting buried alive.
Yes, like the user mentioned above, Facebook could end up as the new Friendster.
I always said they shouldda have used App Engine to scale…
The dollar losses are not the worry — it won’t be too long before FB starts losing talent due to underwater options.
Google should pass on this one and go after Twitter instead.
Social networks are susceptible to what’s most fashionable at the time. Just look at how MySpace overtook Friendster and Facebook overthrew MySpace. People get tired of the old and look for something new and hip again.
Twitter is a much better fit for Google, especially since Twitter’s power lies within its search engine.
I completely agree,Google should go after Twitter or LinkedIn which is relevant to their service or their Core business.
Social Networking just becomes a hopping ground for individual, there will be another Social site coming up with great features or cool site and most will jump ship to that site again,The cycle (will) never end.
Facebook is cool now and then one day is not relevant anymore, look what happen to Friendster or becoming to MySpace.
Nat
Linkedin??? Unless you are job searching, I do not get the site…
I have a profile (made under duress by my friends to boost their profile) but they will never get a dime from me.
agree. Linkedin is basically a site where you can show the world you are gainfully employed, have a fancy degree, and some people work with you or know you. Other than that, it’s useless.
Also, if social networks were so golden, wouldn’t google and/or yahoo just give every e-mail user a profile and have 100m users in one day? Apparently just giving people something for free isn’t a sustainable business model.
Google will not buy any networking sites. Those days were long gone. They may buy Twitter because of their search potential.
But LinkedIn? No way in hell. LinkedIn’s time was up a year ago when they rejected the 300MM News Corp’s deal. Plus some one else should replace LinkedIn soon, they are doing a pretty horrible job despite the monopoly they have with professional networking.
Yes, tell that to my mother who still uses AOL. And pays for it! So, well, yes, maybe they won’t have 1B customers in two years, maybe all the first adopters will get bored, but when EVERYONE is on Facebook, the non first adopters aren’t going to jump anytime soon. There’s a level here that makes sense. Maybe not what Mark wants, but a lot more money than he had in college, what 4 years ago?
Google should just add a twitter-like box to their homepage. Shit, people visit that page 50x a day anyways.
AAfter.com search already does that.
And twitter is fashionable now… where will they be in 18 months? Will some garage project take them to the deadpool?
why so angry??
I think google tried with jaiku right — my guess is Google is either working on the next micro-blogging site, or content to help twitter monetize, and thereby shoulder less risk.
not only twitter’s search engine? &, its really powerful parallel!! at what level of implementation?
I really believe that these social sites are like good time friends – you go out with them for a while, party and have some great times together and then some aspect of your life changes and you fall out of sync – they become a guest star in the narrative of your life for a while until you meet someone else and then it’s a quick exit. There is nothing left from my time with friendster – I can’t even remember my user name – I get the odd sad email from them that makes it through my junk filter on occasion but that’s it. FB is just the latest in a long line of these types of relationships.
i think google already has their own social network – orkut and they are in the process of redesigning it. I ‘d be surprised to hear that google took over facebook
Google has orkut (social network), jaiku (microblogging), dodgeball (mobile social network)….
friend connect — which i don’t quite get.
I think twitter and facebook have the same problem.
How to advertise, it is great to connect with friends on both networks, just I don’t want advertising when I use them.
Both are great websites and we are programming for both platforms.
Notice I said websites, not companies.
Twitter will do really well. Here is why.
How will twitter monetize by Gary Vaynerchuk
http://garyvayn...witter-monetize
Facebook should start and immediate balls out migration to outsource their entire infrastructure.
EDS /HP – IBM / Rackspace partnerships……they have gone down a bad road.
Wow. Yahoo is worth 18 billion (based on it’s stock price) it’s got a lot more patents than Facebook does, it has a longer history, a large chunk of the biggest property in Japan, and a large foothold in China.
So…is facebook really worth almost as much money? Nope. There’s a reason CPM’s on a search results page are so valuable…and those on Yahoo’s network are not. If with all the demographics, Nth generation targeting capability for marketers, etc, Yahoo can’t make a large CPM in “remnant inventory” on their site…why on Earth do people expect Facebook to be able to? Answer: it’s hype, greed and hyperbole…facebook can & should simple cut it’s losses in markets where they can’t afford to run the business.
After they do that, *then* they might be able to figure out how to make some money in the markets where they can sell advertising…if they don’t do it, all that international growth will bury them long term. They need, and simply don’t have, an experience equal to Yahoo or Google…Search is the *cash king* that enables those companies to do everything else. If Facebook doesn’t develop a similar, intent driven targeting strategy that has massive CPM’s soon…they’re going to be the next Friendster.
You’re ignoring the fact that Facebook has infinitely more information about their users than Yahoo does…which is a marketer’s dream, and the reason why high CPM’s are expected. Hence the Google acquisition speculation (recall Google getting into targeting advertising).
Just look at this analysis of Facebook’s Lexicon:
http://staynali...-twitters-butt/
Admittedly, Facebook is just potential right now. And maybe they underestimated the costs of their growth-first mentality (especially in the underdeveloped marketing sphere outside the U.S.). But they can use that leverage to find a way to never run out of investment capital, before they turn on the switch.
Facebook is useless if you don´t have any friends. If they solve that issue, they will be very profitable.
@Jack: first try to solve the problem of not having friends, yourself.
What kind of restaurant makes you cook your own dinner? I think they should have some kind of nofriend-mode where facebook finds or creates friends for you.
My birthday is coming up and I don´t want to spend it alone again.
lol…Good stuff, Jack…I will be your friend. Apparently, Techcrunch solves that problem.
such a thing would rapidly turn into online dating (and Facebook is not far from it anyway).
twitter, the new facebook.
facebook the new myspace,
myspace, the new friendster
friendster, the new asian avenue
and the list goes on…
Great write up. Amazing to have such a *positive* problem – Need cash to fuel astronomical growth.
@Alan Wilensky
I think you’re onto something here. This strategy makes lots of sense. Also, acquiring small data centers may make sense at a good valuations..
Facebook has evolved a HUGE engineering staff that has innovated BIG thingys to solve Big problems that run on BIG hardware that other companies could have provided at 1/4 the costs of owned acquisition or a fraction of the leasing burden via partnerships. They reinvented the wheel as operating expenses eat them alive.
I see bad portents.
This post is bang on. Building your own servers and infrastructure given the size of their user base is a huge expense.
I do give them props for performance, reliability and scalability. Performance & scalability killed Friendster. Reliability is still an issue with Twitter and they’re not nearly as big as Facebook.
Whether or not the dollar amounts in the original story are accurate, Facebook needs to get their costs under control.
i’m a firm believer that someone will always build a better mousetrap.
see update.
but michael, irrelevant of money, people choose where they want to be, just like they did from friendster, to myspace, and now facebook.
who’s to say we won’t have this same conversation next year when twitter surpasses facebook, and the cycle continues…
just saying, it’s up to the people and they’ll jump around depending on look, feel, ease of use and the wonderful job our media provides.
Mark Z and the facebook crew aren’t looking for a buyout. Not sure if anyone read the Fortune article about this exact topic only relating to Microsoft not google buyout.
Fortune
Zuckerberg’s not interested in selling to Microsoft; he wants to build the next Microsoft. And with 175 million “friends,” he’s off to a helluva start.
Google/facebook combination or google/twitter combination makes sense for the next generation of search. I see facebook launching search and monetizing it.
Cheers,
@Steve_Gonzalez
But Microsoft sells products and services for $$ and generates billions of dollars. They can afford the stuff that they do give away for free, like HOTMAIL! : )
Facebook gives away their service for free.
Great plan.
Also, no one said they were looking for a buyout.
I definitely understand Facebook’s desire to build marketshare. However, I feel their quick rise may inevitably be their downfall. They simply need to squeeze more value out of each user and that’s not an easy task, especially (as the site mentioned) with the main user-growth being international. People complain about MySpace because of how it looks, but in order for MySpace to make money, the pages have to be cluttered with advertising. Facebook is clean but there simply isn’t enough revenue from the few ads on their site. It seems a common theme for web entrepreneurs to want to build a site that is extremely popular and then call it a business–but a business is about making money. A lot of websites out there, Facebook included, work for popularity but not for money. I’ve considered a few e-businesses I would like to start, but before I do I really want to make sure there is a solid revenue model in place. After all, an Internet company should make money. With free services such as Facebook, someone is always left to pay the bill.
Have a very hard time believing that Facebook is going ANYWHERE but up while attracting users like flies to sugar.
Microsoft should buy Facebook asap, $15 Bill? They could prob snap up FB for around $8-$9 billion. Which could really start pushing live search!
I have a very hard time believing that a business that sells $1.00 bills for FREE is going anywhere but up either. : )
Don’t worry, they will make it up on volume!
Facebook will end up selling for sub $2B, or expect the investors in it to be howling for Z’s head. There aren’t that many suckers out there, and your overvalued, money hemorrhaging company won’t make it.
I feel sorry for whoever is dumb enough to put more money into this venture.
At this point I would like to thank all the investors in Facebook for paying for this free service for me to use! I have a bare-bones profile so you can collect little information on me, and I have not clicked on one advertisement in my 4 years of use on the site–And I never will! : )
Facebook, in my humble opinion, is worth more than $2 Billion but WAY less than $15 Billion.
Get your shit together Mark, figure out a plan of attack, poll the people who use Facebook for feedback BEFORE you make changes again.
Good luck.
Does anyone remember CB radio fad circa 1980?
(CB=citizen band)
Smokey and the Bandit movies featured communication between truckers, car drivers and Smokeys (hiway patrol officers) in often “halarious misadventures”.
CB radios were a nation wide phenomenon that ended as quickly as it began.
Facebook=citizen band radios
Ha, that’s a metaphor to remember.
“Update: A new source now tells us that Facebook’s internal revenue projections for 2009 are over $400 million, much of which is driven by the self serve ad system. We’re also getting confirmation on Facebook’s $300 million in current cash.”
According to Facebook they could flip a switch and instantly make insane amounts of cash. They just don’t feel like it right now. : )
lol. if they have money, and are still looking for more then there should be something big in the works… or maybe they’re just ripping of another site again..
does anyone think that facebook users are many and facebook addicts are few? and is that why they aren’t able to generate ad revenue?
Maybe it’s time to hire a real CEO, maybe somebody, like, I don’t know, Eric Schmidt—why is this never mentioned? Yes, Mark has done well, but what could be is the better question.
Google, I’m sure, could be doing very well without real C-level, but it clearly pays to know when you are in over your head
I can just imagine how awkward it is during board meetings when everyone in the room knows the CEO doesn’t know jack-$h!t about business.
then why are they on the on the board of this ridiculously order2.0 business in the first place??
sorry i meant OutOfOrder2.0
15 billion to 2 billion lmaooooooooooooooooooooo
Zuckerberg needs to go ask the twins for the revenue part of their idea……..
the more users they add, the faster they head for the cliff. hilarious. they have a core audience to sustain the site, they might as well cap new signups in order to staunch the bleeding. if this takes off in china they could end up tripling their user base and tripling their costs with still no revenue salvation in sight
google and msft are smart, they know its a game of chicken and the institutional funders will blink first. my guess is that goog or msft buys facebook for $4 bln or less…and most of that $4 bln is going to go right back to sand hill road where it came from, employees are busting their nuts for nothing
Was thinking of closing out the FB profile anyway. FB is great because it isn’t as crazy as myspace but myspace has more spirit. Anyone able to make something in the middle? Btw, there is an idea or two on how to monetize social sites…
http://www.toomanyproblems.com
The oxygen in Facebook lungs is definitely running to zero as everyday 600,000 NEW users are registering to Facebook, bringing with them more traffic, photos, data etc while not generating even 1c to Facebook.
Maintaining this aggressive uphill traffic, the servers, the information, the backups, the electricity, power and the total infrastructure is not anything that Facebook can afford with their current funding.
IMHO, at this time, only Google has 2 of the major issues here: (1) Running such complicated platform and infrastructure (2) Google has the knowledge and ties how to make $$$ of this user base.
Until Facebook would understand and gain the knowledge how to bring the $$$, they might go bankrupt. For their sake, they should beg Google to acquire them at any price.
I’ll buy it… for one dollar. : )
I am not selling it to you!
Make a better deal. how about $1.50?
i just read through all of the comments on this post. It is pretty obvious – when you compare this thread to threads about facebook a year ago – that facebook is falling out of favor.
facebook fatigue is already setting in (in the US anyway) and that is not a good sign for a company that has not figured out a revenue model yet.
i am afraid that facebook might be the large and final exclamation point at the end of web 2.0.
Don’t forget to factor in the inevitable schadenfreude that accompanies a top 10 website that still hasn’t generated a profit.
The similarities between Facebook and Amazon (pre 2001) are becoming more and more starker.
they can’t monazite it b/c social networking is a feature; made up by comp-sci geeks; it should never be the whole kit-n’kaboodle
Well they could always get in line for a bailout like every other company that can not seem to understand that revenues should magically be more than expenses.
Asha, think about it this way – if you are a 22 yr old you probably live off some form of parental support anyways (whether money for your weekly bus pass or a few hundred millions for making teenie pokens or other internet fluff) – why on earth would you want to worry about making money?
if you live off of someone else’s dime at 22 you’re a major fucking loser. you should’ve graduate by 21 and have a job.
Facebook has jumped the shark.
it certainly has… Sorry Michael but your analysis of the redesign and their having to ignore the users seems ill-timed. I think this redesign is just one of many reasons they have jumped the shark.
I haven’t been a FB user for a while but as a Chrome user who’s had FB on one of my ‘opening’ tabs it’s now come off simply because the redesign pissed me off. It had become comfortable to the point that had they begun to charge a few bucks per month for a subscription in order to remove any advertising and keep it the way it was I would have considered it.
Now it’s just an annoying site which bombards you with “quizzes” and “lil Green Patches”. How ridiculous.
They’ve got about a year before the FB fad runs it’s course. Twitter better learn or a year from now a sour-ish article on them will appear in these pages.
Thankfully we still have TechCrunch.
Hey don’t hate lil green patch! it’s a real biz run by very smart people who have a solid plan
can someone explain what 800 employee’s do there?
feed zuckerberg ego
funny thing about their employees. I had a strange encounter with one of their so-called ‘ad reps’. This guy seemed to barely understand CPM’s and general media buying, was reluctant, almost barred from talking on the phone and couldn’t figure out how to turn off their ‘out of office’ message (resulting in my receiving 3 dozen emails, all containing the email of their colleague with the mis-spelling ‘facebbok.com’.
I seriously thought I was the mark of some Nigerian-type scam.
“Hello Sir! I am the former head of security of Facebook, working directly for Mr. Zuckerberg.
I bring to you good tidings and ask for your assistance in ‘freeing’ untold riches from a vault formerly owned and operated by this once great and powerful entity. This vault is in disrepair after the collapse and only a few good people can be of service to open said vault.
Please sir, I beg you to wire of to me $1,000 for myself to obtain the necesary tools to open this vault for which I will share it with you 50/50%.
I await yoru reply”
Fondly and with great hope,
M K
Social networks are like nightclubs.
First friendster…than myspace..than facebook.. now twitter..
Now that a bit of a generalization-There is a plethora of social networking sites with a decent business model and who MAKE tonnes of money – it is about social interaction design, knowing the customer and addressing a REAL need – i, like many others only visit FB when i want to kill time or play internet fluff – i hardly NEED FB, I may not even WANT it – but its different with something like say Linkedin – no wonder they can get CPMs upwards of $50
This is the absolute truth of the whole situation – you have nailed it with this statement.
by the way…15b or 2b… that’s an amazing number. The assholes that are making of this will not even see 1/1000th of that in their life time.
cynical assholes. go kill yourselves.
I think that if facebook can be very smart with their advertising they can do very well. I am sure they could easily bring in $1B/year in revenue from ads if they really make their ad platform smart. They know a LOT more information about their users than Google does, and they have enough of the global internet population to run ads worldwide. (1/4 of the global net population already?)
I think personally, if I were google, I would buy them as a preemptive move (yes, to integrate adsense in it).
The only way you can make facebook profitable is to deliver country/language/region/affinity specific ads. Facebook already has all the information it needs. It just needs to build a killer ad-sense clone that integrate the social network aspect.
For example: vote on ads (great or lame), comment on ads, send ads to your friends, etc.
I think they have enough time to make it work.
As far as twitter, it’s going to either explode and take-over-the-world or explode and die, with a permanent fail-whale greying in the annals of the web. If it looks like it will explode in a good way, look out for an enormous purchase. I would not be surprised to see an outside player making an entry in the social market by buying twitter. Maybe amazon, maybe a Mark Cuban company, or a media mogul like Rupert Murdoch. Maybe even Apple. I see that twitter ultimately will be intimately tied to instant media consumption, such as TV, Audio/Video streaming (OMG I’m watching bit.ly/somevid it’s awesome) and instamagically her 35000 followers click to consume. along with the video/audio ads.
“or example: vote on ads (great or lame), comment on ads, send ads to your friends, etc.”
dude, you won’t have any friends if you send them ads LOLLLLLLLLLLLLLLL
Unless of course you are really friends with your FB peep (you know. real life, going back 8-12 years friends) and the ad is funny, insightful, provocative and intelligent. (Bonus if it includes edgy and sexy yet smart.)
This is your strategy for keeping Facebook alive? Wow, you are absolutely out of your mind.
As if I’m going to sit there and rate ads, comment on them, and then send them to my friends. Time to rejoin reality.
How are you going to be friends with them for 12 years most of facebook is between 17 and 25 so they kept in contact with friends from when they were 6-10 years old ?
who the fuc* has time to vote on ads and send them to their friends? ads have to be awesome or have cutting edge creatives to make that happen – 1/10000 ad offerings might be that good. This approach will just serve to clutter up FB even more.
Jesus Michael, it is great to have you back. these last few days of posts have been awesome.
now this is more like it Mike.
In recent months all my posts have been negative as most of the stories have been non stories just to fill the pages ( twitter, some kid taking over another non existant social network, twitter, plastic bottle story, twitter).
This story reminds me of the old techcrunch, the reason most people started coming here way back 3 odd yrs ago.
My friend Flint who is an enthusiastic guy has developed a site called http://money-ma....synthasite.com which has information about sites where you could make money and you could get his advise on them.
What kind of a business decision to build an internal incumbent architecture pre-revenue when the utilization figures for large data centers are so low you can name your price.
Dude, seriously, you’re a drop kick. Go utilize yourself in your home data center.
There have been many articles on the structured financing that FB has engineered in order to grown an owned farm. 150M usres is big, but the run up could have been been financed with far less sunken capex if the custom architectures they were working so hard on were outsourced until 50 – 75users or so. A plan could have been in place to migrate as the capex spend as they reached a calculated breakeven for any data center partnerships. This model has been used in some global supply chain and POS networks.
This might have saved 150M. For every incumbent data center capex on equipment, add another X for the labor, which is costly.
hahahaha, you all are too funny.
i am probably the only person who in fact knows how much they make, what their burn rate is, etc. I have access to their financial statements, BOD reports, minutes of meetings, etc.
but sadly, my company does not allow me to disclose it.
good day.
dont worry, all we need to know is that they are NOT making money. and we already know that answer.
all the harvard degree’s, board of directors and 800+ people that work their cannot figure how to make money. good luck getting an IPO. those days are OVER.
How about let users change the color for a dollar per color; there are a good few million who are sick of the blue layout let them change it to red,orange,green,black etc for $1 each
Thats an easy $10 mil at least.
Go to MySpace, it’s free.
i will second that. let people customize their profile for $
such a thing would rapidly turn into online dating (and Facebook is not far from it anyway).
Sorry… forgot to say great post – can’t wait to read your next one!
Let’s come to a conclusion: Facebook will FAIL, and then google will buy it. Finito.
google is the best, and want’s be among the best
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Facebook should just start selling stuff like ringtones. They’ve already got a consumer base and know what each person likes.
Facebook is toast! 200 million sheep without a home.
A $2 billion dollar valuation is just too much.. Google should spend wisely.
facebook is going down; they got screwed by microsoft and didn’t even know it.
one more thing… they did it to themselves by “hating” microsoft because hating microsoft is a “must” if you’re kewls.
Hey hating microsoft worked for yahoo!
er…
wait…