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

Originally Posted by F1Ferrari

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.

Originally Posted by Feynman

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

Originally Posted by mstone

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.

Originally Posted by SolipsismX

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.

Originally Posted by jragosta

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,

Originally Posted by jragosta

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,

Originally Posted by poke

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.

Originally Posted by Tallest Skil

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 poke

The web, not the internet.

Originally Posted by poke

The web, not the internet.

Originally Posted by jragosta

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,

Originally Posted by Stourque

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

Originally Posted by SolipsismX

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)

Originally Posted by SolipsismX

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.

Originally Posted by Ireland

How can I profit from this?

Originally Posted by digitalclips

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.

Originally Posted by Maecvs

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.......

Originally Posted by SolipsismX

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.

Originally Posted by I am a Zither Zather Zuzz

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.

Originally Posted by quamb

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 jragosta

Buy low, sell high.

Originally Posted by SolipsismX

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.

Originally Posted by cmvsm

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

Originally Posted by island hermit

So you didn't read the story...

Originally Posted by SolipsismX

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.

Originally Posted by poke

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.