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Facebook IPO filing expected within weeks, could reach $100B valuation - Page 2

post #41 of 68
Quote:
Originally Posted by F1Ferrari View Post

That's what most people don't see. The users of Facebook, Google, etc. aren't the customers, they're the product. Our interests, searches, or favorites are all sold to companies that pay Facebook or Google for that information. Click that you like Amazon on Facebook, suddenly you see a lot of Amazon ads on your Facebook page. Search for car parts on Google, Napa ads appear in your Google search results.

Facebook's IPO is selling stock in something you already own: you.

What is worse about those targeted ads is that when you surf the regular web while still logged in to Facebook, they seem to be able to track that as well. I rarely make any posts or comments on Facebook but somehow the ads that are presented seem to be directly targeted to my recent browsing activity.

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post #42 of 68
Quote:
Originally Posted by Feynman View Post

That's it. The product they produce is, well, you.


Voluntary cooperation with that sort of thing is fine in a free world. We are AI's product too. They sell us to dozens of advertising companies.

The product produced at many websites and all news sites and forums is their readership.


Personally, I don't really like Facebook and rarely go there. I find it creepy to see it show up on random websites when I am logged in. So I stay logged out usually.
post #43 of 68
Quote:
Originally Posted by mstone View Post

What is worse about those targeted ads is that when you surf the regular web while still logged in to Facebook, they seem to be able to track that as well. I rarely make any posts or comments on Facebook but somehow the ads that are presented seem to be directly targeted to my recent browsing activity.

Using the Ghostery extension I have noticed a lot of the same analytics being used across sites. It seems logical to me that they will grab your IP address (if they can't get access to your email address for a site) and then use that to deliver tailored ads from all the sites you visit that they monitor. I don't use Facebook so I can't tell, but I would bet there are a lot of 3rd-party analytics vying for hidden space on their site.

Perhaps you could enable Ghostery and set up a secondary browser app specifically for using Facebook to see if the ad results start becoming less specific.

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post #44 of 68
Quote:
Originally Posted by SolipsismX View Post

Facebook has 800 million members. Let's round up to 1 billion to make the math simple and account for growth. Let's also ignore the growth ceiling that would be every man, women and child on this planet minus the ones the too young, too old, too sick, or too poor to be a Facebook customer. That's still each customer being worth $100 to Facebook. I just don't see that kind of per capita valuation for a company that collects info.

Then there is the uniqueness of Facebook. There really isn't any. There is nothing keeping Facebook from falling out of favour like MySpace. That's not to say it will fall but there is no permeance in the way there is with companies where we're the customer not the product. There is something tangible holding me to other products. The other unique thing about Facebook and other social networking sites is that they are based on the product choosing to sell itself instead of the customer choosing to buy the product. Think about that. To me that makes Facebook a very risky endeavor for its investors. I think the bubble analogy works well here.

By that same standard, EVERY company is risky. Toyota could fall out of favor. Google could fall out of favor. Apple could fall out of favor. And Coca Cola? Just sugar water, right?

If you look at user retention, Facebook has a great story. I know a lot of people who spend hours a day using Facebook - and don't use any other social networking sites. Many of them don't even know of any other social networking sites. That kind of loyalty can't be bought - it can only be earned. Heck, Facebook gets WAY more time for most people than Google, so from an advertising perspective alone, there is enormous untapped potential.

Facebook's brand loyalty and their share of consumers' time is absolutely incredible. Almost unprecedented. And the latest information I saw put EBITDA at about $2 B - so a $100 B valuation would be 50x EBITDA. Certainly high, but not unprecedented. Seems to me that there's a much weaker case for Amazon's 100x earnings multiple. Or Toyota's 89 multiple. Or Intuit's 38 multiple.

That said, I'm not going to be buying any shares,
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post #45 of 68
Quote:
Originally Posted by jragosta View Post

By that same standard, EVERY company is risky. Toyota could fall out of favor. Google could fall out of favor. Apple could fall out of favor. And Coca Cola? Just sugar water, right?

If you look at user retention, Facebook has a great story. I know a lot of people who spend hours a day using Facebook - and don't use any other social networking sites. Many of them don't even know of any other social networking sites. That kind of loyalty can't be bought - it can only be earned. Heck, Facebook gets WAY more time for most people than Google, so from an advertising perspective alone, there is enormous untapped potential.

Facebook's brand loyalty and their share of consumers' time is absolutely incredible. Almost unprecedented. And the latest information I saw put EBITDA at about $2 B - so a $100 B valuation would be 50x EBITDA. Certainly high, but not unprecedented. Seems to me that there's a much weaker case for Amazon's 100x earnings multiple. Or Toyota's 89 multiple. Or Intuit's 38 multiple.

That said, I'm not going to be buying any shares,

I agree with you.

I think everyone is looking at the Facebook of today and not really looking at the potential that Facebook represents.

Zuckerberg never wanted to pervert Facebook by opening it up to some form of commercial opportunity... but things can change and if an ipo actually does occur then something tells me that things are about to change radically at Facebook.

This isn't to say that these changes will ensure Facebook's financial success but the potential is enormous and maybe someone has "cracked" the secret to making Facebook commercially viable.

I won't be buying any shares either... well, not right away, anyway.
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post #46 of 68
Quote:
Originally Posted by jragosta View Post

By that same standard, EVERY company is risky. Toyota could fall out of favor. Google could fall out of favor. Apple could fall out of favor. And Coca Cola? Just sugar water, right?

If you look at user retention, Facebook has a great story. I know a lot of people who spend hours a day using Facebook - and don't use any other social networking sites. Many of them don't even know of any other social networking sites. That kind of loyalty can't be bought - it can only be earned. Heck, Facebook gets WAY more time for most people than Google, so from an advertising perspective alone, there is enormous untapped potential.

Facebook's brand loyalty and their share of consumers' time is absolutely incredible. Almost unprecedented. And the latest information I saw put EBITDA at about $2 B - so a $100 B valuation would be 50x EBITDA. Certainly high, but not unprecedented. Seems to me that there's a much weaker case for Amazon's 100x earnings multiple. Or Toyota's 89 multiple. Or Intuit's 38 multiple.

That said, I'm not going to be buying any shares,

Good rebuttal. I did anticipate this reply but this level of detail. I'll need some time to come up with a reply but after I watch The Grey.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #47 of 68
I see Facebook as the last hurrah of the web. That last big success before the prevalence of smartphones renders it irrelevant in most people's lives. This is especially so because it's essentially a walled-garden within the web. It's almost like a transitional form between the web experience and the mobile device experience. I don't think they have a great mobile strategy and any Internet company without a great mobile strategy is not a good long-term investment in my book. This is especially true of Facebook-as-a-platform, which just seems completely irrelevant on smartphones and tablets. I'm very wary of this one.
post #48 of 68
Quote:
Originally Posted by poke View Post

I see Facebook as the last hurrah of the web. That last big success before the prevalence of smartphones renders it irrelevant in most people's lives.

Thinking that smartphones will kill the Internet is the single most ludicrous thing I've read since I read that "Apple is copying Samsung".

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #49 of 68
The bubble I see bursting is this whole inline ad business. Virtually all of Facebook's and Google's revenue comes from ads. I don't know how many people click these ads and buy stuff, and obviously lots do, but I see the value in these ads dropping in price. If advertisers are not seeing a return on their advertising dollars, they'll go elsewhere.

Btw, I never use Facebook on my computer - only my phone, and there are no ads on the mobile app versions.
post #50 of 68
Quote:
Originally Posted by Tallest Skil View Post

Thinking that smartphones will kill the Internet is the single most ludicrous thing I've read since I read that "Apple is copying Samsung".

The web, not the internet.
post #51 of 68
Quote:
Originally Posted by poke View Post

The web, not the internet.

I'm not following your distinction between an internetwork of computers and a world wide web of computers. Ive always consodered them synonomus terms. The only distinctions I'd make would be browser-centric and app-centric connections to the web/internet.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #52 of 68
Quote:
Originally Posted by poke View Post

The web, not the internet.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #53 of 68
Quote:
Originally Posted by jragosta View Post

By that same standard, EVERY company is risky. Toyota could fall out of favor. Google could fall out of favor. Apple could fall out of favor. And Coca Cola? Just sugar water, right?

If you look at user retention, Facebook has a great story. I know a lot of people who spend hours a day using Facebook - and don't use any other social networking sites. Many of them don't even know of any other social networking sites. That kind of loyalty can't be bought - it can only be earned. Heck, Facebook gets WAY more time for most people than Google, so from an advertising perspective alone, there is enormous untapped potential.

Facebook's brand loyalty and their share of consumers' time is absolutely incredible. Almost unprecedented. And the latest information I saw put EBITDA at about $2 B - so a $100 B valuation would be 50x EBITDA. Certainly high, but not unprecedented. Seems to me that there's a much weaker case for Amazon's 100x earnings multiple. Or Toyota's 89 multiple. Or Intuit's 38 multiple.

That said, I'm not going to be buying any shares,

Sure, every company has an inherent risk when customers are given a choice but some products are more risky than others. It's a strawman to suggest that all risk is somehow the same and equal. When human beings are both the product and secondary customer the risk is much higher. Brand loyalty is harder when your product is people. People have a choice, inanimate objects don't. The trends that made Facebook more popular than MySpace more popular than [going back all the way] can also break them. People can and will switch social networking as the industry changes. You look back to throughout the short history of the internet to see it. The brand loyalty comes into play when you're talking about he real customers but they will only stay so long as we are willing to sacrifice our lives for statistical vivisection.

I don't think anyone is questioning that Facebook has an intrinsic value and worth. I'm certainly not. I'm questioning that the worth is over $100 per user to make the starting the IPO be $100 billion. Apple, MS, Samsung, McDonald's, Coca-Cola, etc. all have patents, production, property, and well entrenched expertise and usage patterns that makes their value harder to shake than a social networking website. Facebook knows this which is why they have been trying to tie HW to their service to keep us Eloi in the garden.

Facebook's service isn't really a service anymore than feeding cattle grain is a service to your beef business. IOW, feeding the cattle is an expense just as feeding us services on Facebook is an expense. We all for the slaughter of the analytics butchers.

(Went a little over the top with the analogies but it was fun)

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #54 of 68
Quote:
Originally Posted by Stourque View Post

The bubble I see bursting is this whole inline ad business.

This is a great point. And the impact of which is very difficult to forecast.

The ad industry is growing perhaps at the rate of GDP plus a little bit. Companies like Google are growing their ad revenue at many multiples of that, and Facebook's valuation is premised on ad revenue growth that is many multiples of Google's.

But the ad industry is only growing so fast -- i.e., it'll have to come from others' ad shares, notably Google's and that of print. Arguably, the rate of loss of print ads have flattened out, and Google is not about to roll over and die.

From where exactly would the volumes of ad revenue required to justify Facebook's valuation come?
post #55 of 68
Quote:
Originally Posted by SolipsismX View Post

Sure, every company has an inherent risk when customers are given a choice but some products are more risky than others. It's a strawman to suggest that all risk is somehow the same and equal. When human beings are both the product and secondary customer the risk is much higher. Brand loyalty is harder when your product is people. People have a choice, inanimate objects don't. The trends that made Facebook more popular than MySpace more popular than [going back all the way] can also break them. People can and will switch social networking as the industry changes. You look back to throughout the short history of the internet to see it. The brand loyalty comes into play when you're talking about he real customers but they will only stay so long as we are willing to sacrifice our lives for statistical vivisection.

I don't think anyone is questioning that Facebook has an intrinsic value and worth. I'm certainly not. I'm questioning that the worth is over $100 per user to make the starting the IPO be $100 billion. Apple, MS, Samsung, McDonald's, Coca-Cola, etc. all have patents, production, property, and well entrenched expertise and usage patterns that makes their value harder to shake than a social networking website. Facebook knows this which is why they have been trying to tie HW to their service to keep us Eloi in the garden.

Facebook's service isn't really a service anymore than feeding cattle grain is a service to your beef business. IOW, feeding the cattle is an expense just as feeding us services on Facebook is an expense. We all for the slaughter of the analytics butchers.

(Went a little over the top with the analogies but it was fun)

I guess we'll find out when the IPO happens. At that time, people will say with their own many what the business is worth. I'm not saying it's worth $100 B, but I can certainly see how someone might reach that conclusion.

For comparison:
Google receives about $24 per year per user in revenue. Facebook has easily 10 times the customer attention time (stickiness) of Google, so it is not out of the question that the revenue could be at least that high if they focus on ads. So $100 per user is only 4 times annual revenues per user - which is not at all out of line. And that doesn't even allow for growth in the user base.

I don't know if the IPO will come out at $50 B or $150 B, but it appears that based on the way comparable companies are priced that the $100 B number is not out of line.
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post #56 of 68
Quote:
Originally Posted by SolipsismX View Post

I'm with you. I don't see how some of these companies get their valuation when they don't produce anything except more ways to sell our information.

Advertising and marketing information sold to companies. That's how Google makes money.

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post #57 of 68
Quote:
Originally Posted by Ireland View Post

How can I profit from this?

Personally, I'd steer clear of this kind of offering. Remember MySpace? Remember AOL? Two great lessons in social media flops.

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post #58 of 68
Quote:
Originally Posted by digitalclips View Post

I agree, watch the stock drop like a rock after a few weeks.

This is what causes bubbles, people investing in companies that don't actually do anything.

After a week. Not even two.

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post #59 of 68
Quote:
Originally Posted by Maecvs View Post

Gawd, I wish they'd stop saying 800 million users. There are 800 million ACCOUNTS! A big difference.
I know people on FB that have three, four accounts, even more.......

Those figures are used to inflate advertising rates. Just like the tomfoolery that goes on at Baidu.

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post #60 of 68
Quote:
Originally Posted by SolipsismX View Post

I'm not following your distinction between an internetwork of computers and a world wide web of computers. Ive always consodered them synonomus terms. The only distinctions I'd make would be browser-centric and app-centric connections to the web/internet.

Browsing the 'web is only one way to use the Internet. It is only one protocol among many.

For example, Gopher sites predated the 'web, and were used on a similar manner. Before Yahoo, there was Archie. NNTP still exists, as does FTP.

Youngsters think that the 'web is the Internet. But that is like saying that AM radio is electromagentic radiation.
post #61 of 68
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Browsing the 'web is only one way to access the Internet. It is only one protocol among many.

For example, Gopher sites predated the 'web, and were used on a similar manner. Before Yahoo, there was Archie. NNTP still exists, as does FTP.

Youngsters think that the 'web is the Internet. But that is like saying that AM radio is the same as electromagentic radiation.

my point
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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #62 of 68
Please Please please understand the difference between communication and communicating.

Facebook users do a lot of communicating but very little communication, Oh I have 6 facebook accounts and I don't spend a dime there. I never click on the ads EVER.

I "text" my family and see photos, how does this make zuckerberg money, someone please tell me I'd love to know?

Facebook revenues reached $500 million in 2009, up from $300 million in 2008, according to Fortune editor David Kirkpatrick, who cites "well-informed sources" in his upcoming book, The Facebook Effect.

Facebook expects revenues to reach $800 million in 2010.

Where did 2009's $500 million come from?

Self-service ads, which appear on the right side of the screen on Facebook, accounted for about $250 million to $300 million.



Read more: http://articles.businessinsider.com/...#ixzz1kpsz5REh
Quote:
Originally Posted by quamb View Post

I think many of you are underestimating the value of Facebook just because they don't release shiny products...

There are literary millions upon millions of people around the globe that use facebook for countless hours everyday of the week.

No, they don't check out apple forums, tech news websites, reddit, gmail, use project management software, the cloud etc... no... these people use a huge percentage of their internet time on Facebook. This alone is worth vast sums of money, but there is more to it than that.

The greatest things of value on earth (and ready to exploit) are not gadgets or tech, but the basic fundamentals of life - food, sex and communication. And here we have this single company that pretty much dominate the third point.

Originally Posted by Rickers - 2014

Cook & Co will bury Apple.  They can only ride Steve's ghost for so long.  Steve == Apple and Apple == Steve.  

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post #63 of 68
Quote:
Originally Posted by jragosta View Post

Buy low, sell high.

That is not useful.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #64 of 68
Quote:
Originally Posted by SolipsismX View Post

So you're wanting to know what an article has to do with Apple if you remove everything about Apple from the article. What I want to know is why you think your question makes any sense.

You answered a question with a question, but his question still remains. What does this story have to do with Apple?
post #65 of 68
Quote:
Originally Posted by cmvsm View Post

You answered a question with a question, but his question still remains. What does this story have to do with Apple?

So you didn't read the story...
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post #66 of 68
Quote:
Originally Posted by island hermit View Post

So you didn't read the story...

If you are referring to an app having anything to do with the IPO, please explain.
post #67 of 68
Quote:
Originally Posted by SolipsismX View Post

I'm not following your distinction between an internetwork of computers and a world wide web of computers. Ive always consodered them synonomus terms. The only distinctions I'd make would be browser-centric and app-centric connections to the web/internet.

The web refers to hypertext and not connected computers. The web is HTML and related technologies, as invented by Tim Berners Lee, who coined the name. The Internet, the network of computers, existed long before the web. The two are not synonymous.
post #68 of 68
Looks like it open as a $5 billion IPO.

Quote:
Originally Posted by poke View Post

The web refers to hypertext and not connected computers. The web is HTML and related technologies, as invented by Tim Berners Lee, who coined the name. The Internet, the network of computers, existed long before the web. The two are not synonymous.

At one point a long time ago that was the only correct answer but web and internet are interchangeable today.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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