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Facebook's Revenues Leaked
eldavojohn writes "Think that Goldman Sachs spent too much on Facebook with the $450 million investment? Well, a very wealthy customer of theirs decided to leak Facebook's financials yesterday after receiving it over lunch: '... during the first nine months of 2010, Facebook generated $1.2 billion in revenue. Net income at the firm was $355 million. The financial statements were not audited and offered little detail about how Facebook generates its revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.' Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income. Given that, should Facebook be valuated at $50 billion?"
Reader frontwave adds news that other social tech companies are hurriedly considering IPOs of their own.
You're not the customer. You're the product.
They have 500 million viewers, yet they ONLY make $1.6 billion from them?
Conde Naste makes $4 billion a year from just a few million viewers.
There are some fundamental problems with Facebook that would prevent major-brand advertisements from purchasing ads there, namely, that it's a viewer-driven site - content comes from the viewers, which is a big no-no among advertisers.
Why would a major advertiser, like Calvin Klein, place their high-end ad right next to some picture of a college kids barf? They would much rather have their ads placed next to a picture of Lara Stone.
THIS is why Facebook only pulls in a few cents CPM, whereas an ad in Vogue goes for $150 CPM.
The more democratic you get, the less interesting you are to advertisers.