Slashdot Mirror
Facebook IPO Stumbles Out of the Gate
Facebook's much-hyped IPO kicked off today, but an anonymous reader points out that things didn't go quite as smoothly as investors hoped. "Public trading didn't get underway until about 11:30 a.m. ET, half an hour after it was supposed to. The delay was likely caused by the huge amount of interest in the stock – especially by retail investors. In the first few minutes of trading, Facebook shares were only up between 5 and 10 per cent and by noon were essentially back down to the IPO price of $38. Many observers had expected the stock to double in price by the end of the day, if not sooner." The NY Times has a data visualization showing how Facebook's IPO compares to other tech IPOs throughout the years, and how the first day of trading treated all of those companies. Meanwhile, the debate is lively over whether the social networking giant will be a good investment. "The banks helping take Facebook public want us to value this 8-year-old upstart at as much as $104 billion, more than Disney or Kraft Foods, though those companies earn three and four times more. That top valuation is also more than 100 times Facebook's earnings last year, versus 13 times for the average company. At such a high price, it will take years for this so-called earnings multiple to fall to a more reasonable level, and that's assuming the company can maintain its torrid earnings growth."
(points) Ha ha!
"Facebook hasn't yet really spent time on monetization. Their primary goal has been quick growth and they have greatly succeeded in that."
Where have I heard that before? Ah, yes, we're back to valuation based upon "eyeballs" or "clicks." How'd that work out last time?
A bunch of investors throwing tons of money after dot-com companies on the belief that these companies, despite having no earnings, would somehow grow big. Then in 1999-2000 the bubble burst.
Today's investors are not going to make the same mistake of going after another dot-com company that has almost no earnings. The memory of 13 years ago is still too fresh. (Plus many of them are probably short on cash due to the ongoing recession.)
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
Maybe I should suggest to my company that they start giving our products away for free just to grow the user base. Apparently having revenues lowers your stock price.
AccountKiller
announced this IPO, I was skeptical. Then they amended it, eight times (I think). Now, it seems to me that we've blown a rather large bubble - as the article says, this 104 billion is 100X their earnings last year. I wonder which set of retirees or naive persons will lose their asses on this one when it pops.
I remember when, recently, myspace was quite large. Does anyone else have a myspace page still? Now imagine if you owned 100 shares of that company. . . . . Now imagine your investment person has most of your retirement tied up in that company. . . .
Thoughts?
Profit is how investors get paid.
My facebook is always covered in ads for young hot single women in my area. If they're generating that much revenue then they must be incredibly wealthy young hot single women and it should be easy to find myself a sugar mama.
Last time I heard it was Google's IPO. That turned out pretty darn well.
A company issues an IPO and the closing price ends up at the same price as the IPO price? Not only is this not "stumbling out of the gate", but it means it was done right. If the price jumps too much, the founders of facebook lost out on a lot of money. If it drops, then the initial investors were suckers.
Whether Facebook is able to increase earnings remains to be seen. My gut is it will increase substantially, but not enough to justify the current P/E ratio once risk is factored in. But others think the opposite. So, the investment bank did a very good job in pricing.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
Does anyone have a toothpick? I have AstroTurf stuck in my teeth from reading that. I lived through the dot-com boom... Facebook is great and it will/can make money, but I haven't seen this much hype since Pets.com
Sig. Sig. Sputnik
FB knows your stated desires. GOOG knows you're hidden desires. FB gets you when you're goofing off. GOOG gets you when you're actively seeking something and you're ready to buy.
GOOG is undervalued.
Facebook IPO Crashes Nearly 10% After $42.05 Opening Price - and the Underwriters had to STEP IN, to prevent a free-fall in decline. That is - no matter what you'd spin it - a market manipulation.
Bubble, meet needle!
"Flyin' in just a sweet place,
Never been known to fail..."
They NAILED the IPO, and neither undersold the stock(like LinkedIN did) and lose money that way nor did they value it too high and scare off any potential investors. I'm surprised and impressed.
Sure, for the guys holding the stock at FB it's a letdown, but the company nailed it.
She: Hey, are you a traitor? Me: No, I'm atheist.
The press coverage of Facebook's IPO is completely idiotic. For years the investment banks have been sticking it to companies doing IPOs. If the stock gets sold at $38 and it ends the day at $100, that means the company *should* have raised more than twice as much as it did. And it means that the employees participating in the IPO also got shafted. The people who benefit in that scenario are the privileged investors who get to buy at $38 and sell a few hours later at $100.
If Facebook ends up close to $38 at the end of the day, it will be a rare example of the stock having been priced correctly at the start. Where it goes from here is anyone's guess, but I have increased respect for Zuckerberg. Google had a different IPO process but also didn't give away a lot of money. They knew what the banks were trying to do to them.
You make a good point. I'm in at $40 - let's see how the rest of the day goes :)
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Seems to have been quite great for Google, which spent its first six years (1998-2004) without making anything and just running things on venture capital.
Actually not quite true, in the year+ before Google's IPO they were making money hand over fist, far more than they had thought they would be, and so they were hiding it:
By 2003, AdWords Select was serving hundreds of thousands of advertisers and making so much money that Google was deliberating hiding its success from the press and from competitors. But it was only a launching pad for the next brilliancy.
source
MEME TIME
Remember M$ and "Monkey Boy"?
Remember MAFIAA ?
Here's our NEW MEME. Carry this in every Facbook CEO Namecheck:
"Suckerborg".
Thank you. That is All.
"Flyin' in just a sweet place,
Never been known to fail..."
I am not sure which is more disappointing. The parent post or the people who voted this insightful.
Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual. The more information they can find out about you, the more effective their advertising.Instead of marketers blindy throwing out products to 25-34 year old females, they will be able to disect the market in finer terms and use their money wisely. The more effective the advertising, the more money they can charge. So while you laugh at the idea, Google's founders could lose a billion in their couch cushions.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
Facebook is the identity of the internet going forward.
MySpace is the identity of the internet going forward.
Geocities is the identity of the internet going forward.
AIM is the identity of the internet going forward.
YAHOO Chat is the identity of the internet going forward.
Opendiary is the identity of the internet going forward.
Fucking 4chan is the identity of the internet going forward.
I think it might be a bit bold to say that this one site will be the face of the internet from now on. . . The internet is a fickle mistress, and small changes today can equal large changes in the future. The only difference between those other companies and facebook? Time. (yes, I know that some of them are still successful, I was making a point, just go with it)
1) Brand new user
2) Posts a multi-paragraph post within a minute of the story going live
3) Glowing review of Facebook that goes against every conventional wisdom
4) Gets basic facts wrong about finance
5) Gets basic facts wrong about business etiquette
Woo. More astroturf.
To be a bit more on-topic: the facebook valuation is insane. A 100 times current earnings? It'll be years before Facebook can justify that kind of price, and that's assuming that it will keep growing as it has - which is an insane proposition, considering that there aren't that many more people who CAN join Facebook.
Those who can, do. Those who can't, sue.
Google was no where as big of a company as FaceBook is now when they IPO'd. I just don't see where the money is to be made unless they branch out into Google's territory of search. FB adds are just harder to target than Google ones. They are half the price but without any click through. Branding would be about the only kind of advertising you do there unless FB gets into phones, gadgets, etc.
If there is a way to make money in social media FB IS the big player here.
And we have absolutely no proof that they ever will be able to effectively monetise Facebook or that it is even possible to the extent that all of these optimists believe that it will be.
Right now Facebook's value is 99% smoke and mirrors, and I would never invest in it.
Troll is not a replacement for I disagree.
WTF are you talking about?
facebook is growing PROFITS at almost 100% every year. Revenue is up 5X over the last 3 years. they are about at the same point in revenue/profits as when google went public.
the only people i know who still use email are my mom and my kid's baseball team. everyone else i know uses facebook. gmail is mostly for spam and crap email
openID is dead. most legit websites with a login will let you use your facebook account. Facebook is the identity of the internet going forward.
I will say right now that that is only a portion of the population. It may be all that you know of but there are people that avoid Facebook because of one reason or another. Assuming that everyone has an id there, or even uses it regularly is similar to assuming everyone has an iPhone. It may be popular but there will just be people that wish to not use it.
No comments about Zynga, the makers of Farmville, tanking?
Twice during the day (so far), their stock dropped more than 10% in 5 minutes and resulted in a halt to trading.
http://money.cnn.com/2012/05/18/markets/facebook-social-media-stocks/
Learning HOW to think is more important than learning WHAT to think.
I'm curious if price discovery is accurate right now since NASDAQ isn't delivering execution notices for FB orders. I know eTrade was down earlier (even the public website) and Fidelity has a notice that FB trades are stuck and have been since it started trading.
All that makes me curious how many orders are stuck out there in limbo land? Will people find out tomorrow that the order they thought was cancelled got filled?
Seems like a big screw up that NASDAQ doesn't want anyone to know about. I don't think you could have mishandled an IPO any further.
Natural != (nontoxic || beneficial)
Right, because Facebook did such a sterling job of finding people whose profile made it appear like they had with the cash to spend on a General Motors car. OK, maybe a bad example given the current state of global finances, but when was the last time you heard mention of a successful Facebook marketing campaign? I don't even think Zynga has done that, and they are about as linked at the hip to Facebook as you can get.
I think that's the crux between Google and Facebook, really, and probably why Zuckerberg seems so interested in integrating search into Facebook all of a sudden. I'll bet plenty of people post things to Facebook about how much they like some expensive trinket, but it's Google that gets to see which ones are actually looking into making the purchases. My long term prediction; neither company is going to go away anytime soon, but Google is going to see the growth while Facebook is going to start a slow slide into mediocrity with the next few years unless it can find a major source of revenue in all those terabytes of data it has.
UNIX? They're not even circumcised! Savages!
People still print ads? On paper?
It's that stuff you see outside, under the daystar.
-- This space for lease, low setup fee, inquire within!
Two points.
First - making any other predictions? Let us say you have a 50/50 chance with FB. In 5 years you could be right because you were perceptive or lucky. Statistics won't tell you which. You need to make a lot of predictions.
Second, why don't you try some type of forced investment planning? Something like investing in your 401(k) and only checking and rebalancing your portfolio once a year? Promise you will put 50% of your next pay increase into savings? If you know you have poor control you can set up road blocks that will give you extra time to think.
+1.18 / +3.10%
If they close in the red there first day of trading, what will it mean to investors and facebook?
Brought to you by Carl's Junior.
And then there are the people who hate him because he really is a shitty human being long before the social network was made.
.
I wonder if Mr. Zuckerberg knows that the Internet has beat him to it.
Congratulations on missing the point.
Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual.
Advertising is still only worth anything if the people seeing the ads actually buy stuff.
Just this week, GM pulled out of Facebook advertising, representing a loss of millions of dollars to Facebook. Here's the money quote, in every sense, from that link:
GM dropped its Facebook ads because they were less effective than other options such as Google's AdSense, the sources said. Facebook's ads garner about half the clicks per page view, a measure of effectiveness, compared with the average website.
It turns out that focussed advertising is much more valuable when it's related to something that someone is searching for or reading about right now, and people who use Facebook a lot are (shock!) not doing it because they enjoy the ads. IIRC, there was another survey reported this week, in which about half of the Facebook users questioned said they would never click a Facebook ad.
The more effective the advertising, the more money they can charge.
Exactly. And Facebook aren't doing very well on that score.
What's more, the growth in their user base so far has been based on social pressure and reaching a critical mass of users who bring their friends along with them through networking effects. There simply aren't enough people in the world for them to carry on doing that at the same rate.
Surprising, I know, but I'm in the "Are you kidding?!" camp on this one.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
And that is exactly the point. right now, Facebook has been run by a kid who just wants to build the biggest social network. If Facebook can succeed in learning how to make moeny, they will go from their paltry $1 Billion earnings to a really big number :)
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
Zuck has ... made it very clear he still doesn't give a crap about making money (and probably never will).
For himself or others? Because it's pretty clear that he is making/will make a boatload of money.
It must have been something you assimilated. . . .
Branding would be about the only kind of advertising you do there unless FB gets into phones, gadgets, etc.
Actually, branding is the LAST thing you'd do on Facebook. Place your ad on FB, and your brand would be seen as Spam, instead of as something valuable.
Why would any advertiser place their brands ad next to your friend from high-school throwing up, when they can place it next to a Kate Moss cover story in Vogue?
So, that's how branding works.
There is a significant difference tho; with google there is actually a fair chance that the searcher is looking for a product related to the actual search at hand, while with facebook you're basically trying to surreptitiously slip sales in to a largely unrelated activity.
Targetted advertising simply isn't that worthwhile if you cant target it temporally. You may know my interest intimately, but you're not going to sell me anything unless I'm actually in the market for that specific thing at that specific time. At best you can build brand awareness, but there are many ways to do that that are at least as good or better by simply targetting specific venues, mags, etc.
Good had the revenue to back it up their (much much lower) IPO valuation.
Google is hugely profitable. Facebook, less so.
Yep, a lot of people I know avoid Facebook because of the privacy issues, because its easy to say the wrong thing, because of the shitty ads, because for the 5000th fucking time NO they don't want to play Farmville or meet singletons in their area now. They also don't like how much time is chewed up with nonsense postings ("Lol, here's me drunk! Hehe!") or the creepy integration with every damn website out there. Or the even creepier image recognition tagging.
The people I know who religiously use Facebook tend to be slightly dim girls who feel the need to share their entire lives with everybody.
Anecdote, yes. Worthless? We'll see in a few years. I'm sure Marky Mark is quite bright and will try to push into areas such as search or a Friendface phone but there's really not much higher to go and probably a lot further to drop.
We saw all this before in the UK (albeit on a smaller scale) with Friends Reunited. Epic levels of hype, much cash changing hands, site slowly collapses to a fraction of its original size. Ten years ago almost everybody here with an Internet connection was on FR & every day there were stories in the paper about it. Unlike Myspace Friends Reunited was as successful here at gaining a multi-age demographic as FB is now. Still didn't save it.
Sure, which is why a lot of the pundits were predicting before the markets opened this morning that at the end of day one the shares would close at roughly double the opening price. Quite a few people are eating their words with a side order of humble pie tonight.
I suspect Facebook is in significant trouble now. Today should have been a spectacular confidence booster that set the tone for future offerings and investment. In reality, it's been a damp squib, and that's going to make a lot of people think twice about investing.
You can never tell with these things, because what happens over the next few weeks will be based far more on market sentiment than any fundamentals, but I wouldn't be surprised to see the stock price trickle away over the next few weeks with very few winners. Even Zuckerberg's position won't be safe if that happens, because he's responsible to investors now, and they won't be happy if that's the direction things go in.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Since people don't remember when they where wrong, you probably have been wrong.
The Kruger Dunning explains most post on
Not to be bitchy, but people using the word "meme" - as well as the phrase "the cloud" - should be dragged out back and beaten. Stop it.
It must have been something you assimilated. . . .
I've seen a few comments suggesting that the failure for the stock to rise above the IPO price is a sign that the stock was right priced at the opening.
I don't understand this statement. Is it possibe for the stock to go significantly below the IPO price at this point? I'm sure that the employees with stock options are locked in, and unable to share. Not sure if similar agreements exist with the early investors, but I suspect they do.
How is this right pricing? Seems like the stock really can't go any lower.
Actually.. oddly enough that would mean that facebook priced its IPO perfectly. Ideally an IPO comes out at near or at the price the market will pay for the stock -- that is -- maximizes the value to the company for selling its shares. If the stock price had doubled today that would be good for investors that bought into the initial subscription to the IPO, but BAD for Facebook, and bad for Facebook's owners that sold off in the intial round of sales.
What makes media happy and what makes the company successful are not always the same thing.
-GiH
That's not true. This information is all public and easy to look up...
Google had $3.2B in revenue in 2004, and their IPO made them worth about $24B. Their net income the quarter preceding the IPO was $80M, and diluted EPS was $0.30.
Facebook had $3.7B in revenue in 2011, and their IPO made them worth over $100B. Net income last quarter was $137M, and EPS was $0.09.
Revenue and income are clearly in the same ballpark, but valuation and EPS sure aren't. Seems to me FB is in fact way overvalued right now...
And even more interesting to note is Google's revenue and income took off like a hockey stick in the quarters following their IPO (and thus so did the stock). I just don't see Facebook's revenue doing the same. There may soon be a lot of disappointed investors who naively assumed FB stock would be going the same route as GOOG just because it's a "trendy company" rather than actually looking at the financials...
Targeted adds...
ARGH!
Sorry, second time I've seen this. Driving me nuts. It's "ads". It's short for "advertisements". Count how many 'd's you see in "advertisement". You see "adds" when a new group of mobs attack you during a fight. You see "ads" in a newspaper. Well, you used to, back when people still read newspapers...
"Convictions are more dangerous enemies of truth than lies."
There are a few issues with Facebook making a lot of money:
(1) - Click through rates of Facebook ads are abysmal, at best.
(2) - People use Facebook to share stuff, not to look for stuff to buy, thus they ignore most ads. Reason Google click through rates are better because people look for stuff on Google, often to buy.
(3) - Growth of Facebook in countries where the population has spending power, thus being desired products by advertisers, has stalled or it's very slow.
for the 5000th fucking time NO they don't want to play Farmville or meet singletons in their area now.
Tell me about it. I tried to meet singletons in my area, but they kept giving me the same one over and over again no matter how many times I asked for a new one.
https://www.eff.org/https-everywhere
Adwords was started back in 2000, 4 years before the IPO. By 2003 they were making a significant amount of money from it. The also had a long term plan to improve the product and grow the company beyond basic search. Dollar for dollar Google was a much better investment when they went public than Facebook currently is.
Facebook is in the search engine business, just from the other direction. Facebook is for companies to search for people to whom they can market their products.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Google serving ads is different. For anyone seaching for a product they can throw sponsored links at the top of the search results page and they are often relevant to the person searching. This particular advertising mechanism actually makes sense and is probably one of the most effective around. Not that everyone is doing a search where ads are welcome, but that nobody goes looking for products or services on Facebook ads there are never relevant to what people are doing. I suspect FB click-through rate is much lower than Googles. OTOH, FB ads have images and reflect your "likes" even if they are not related to what you're doing at the moment. I suppose the jury is still out on this.
Uhm ... no. That depends entirely on how the sale is structured.
Insiders aren't even allowed to sell (usually) on IPO day unless their sale was worked into the subscription. Even long after they have to announce their sale a few weeks ahead of time before being allowed to sell. (VC guys would be the definition of insiders).
Ultimately, the only people that make money on a baddly priced IPO are the folks that get in on the initial IPO subscription (outside buyers). That's not good for the company, and it dose nothing for the owners and initial capital investors.
This is one of those rare times in life where you should know exactly what you're buying. An overpriced ticket to ride on Mark Zuckerberg's crazy train. GL.
He's not right. There are lots of ways to profit from investing, besides just selling it off on the market for a higher price. The first method that comes to my mind is shorting, where an investor sells stocks borrowed from someone else with the promise of buying them back later to return them. If, at any time during the loan, the price drops below what the borrower sold the stock for, the borrower can buy back the necessary stocks to return the loan, and have made a hefty profit. Of course, the lender is now left with shares that are worth less, but that's always a risk of investing.
Apart from the straightforward sale of stock, there are other ways to make money. There are of course dividends, which Facebook may offer later as a means to increase its stock's demand. There are also repurchases, where the company could buy back its own stock, for whatever price the company values it at (which is separate from the market price). Then, of course, there are benefits to simply owning interest in a company, like the ability to vote on certain decisions and to meet influential people in the company.
You do not have a moral or legal right to do absolutely anything you want.
Nice spin, but they're poised to close even, or maybe 1c above offering. The only reason it hasn't gone through the floor yet is likely because there is a large volume of limit buys and sells at $38.00 -- people who want to get out if the price hits offering, and people who will only buy at the offering price.
https://www.eff.org/https-everywhere
Once upon a time, a large portion of web sites had Geocities buttons on them, and forums listed AIM names.
You do not have a moral or legal right to do absolutely anything you want.
Google was the odd man out of the thousands of dot-com IPOs that fizzled, if not crashed and burned. One success story and all the toilet paper stocks are forgotten...
How long have you been working on wall street? Just asking...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Actually.. oddly enough that would mean that facebook priced its IPO perfectly.
From the news I heard, the underwriters had to step in today to assure the stock didn't go below the IPO price. The pricing of the IPO was not as "perfect" as you assert.
How did this score -1? Seriously, I think it's a very valid point. Now if the ad in question was for say Jose Quervo I could see that.
I am Bennett Haselton! I am Bennett Haselton!
Im no stock genius..far from it.. but to me (puts straw in corner of mouth and starts to chew) seems like a big game of duck duck goose when you produce no tangible, as in I can touch it, product. So I buy it, you buy it, he buys it, she buys it and last one to sell.. well.. theres your goose.
As far as FB goes.. I have to say Im surprised theres not more ducks lining up to play the game, but then again, the CDO's pretty much knee-capped all the big money and I suspect they are still licking their wounds.. (spits out straw)
Funny,
This is the most prominent link, on what I supplied:
http://professional.wsj.com/article/SB10001424052702303448404577411903118364314.html?mod=wsj_streaming_facebook-ipo&mg=reno64-wsj
Subtitle? "Underwriters Stepped In to Support Social Network's Shares at Offering Price"
Next time they want to build a bubble, they'll have to blow us a little harder...
"Flyin' in just a sweet place,
Never been known to fail..."
Lots of Slashdotters think branding is a number's formula. It's not.
It's an art.
I'd love to see them try and quantify Kate Moss. It's why Vogue charges $150 CPM, and Facebook $0.01 CPM.
Conde Nast gets $4 billion/yr from about 5 million readers. Facebook needs 800 million people to get that much.
Social media really is useless as an advertising medium. Tech nerds should stay FAR away from the media world. Don't get into the art world if you don't understand art.
If it weren't for the fact that the underwriters had to artificially prop it up by putting millions of buy orders in at 38.00.... If it weren't for that, it would've gone significantly lower.
There may soon be a lot of disappointed investors who naively assumed FB stock would be going the same route as GOOG just because it's a "trendy company" rather than actually looking at the financials...
Those aren't investors, those are gamblers. A fool and his money...
it never went past $43. wouldn't say it raised quite fast either, it kind of burped and then plummeted, then the underwriters stepped in to stabilize the price (twice). it's actually doing very poorly; you can watch all the excitement at; http://www.nasdaq.com/symbol/fb/real-time
It needs to close at around $43 or $44 for the IPO to not be considered a failure.
FB has the potential to target ads to a degree that Google can't, it's just a much harder problem to tackle. But with so much more personal information at their disposal, the ceiling is higher. FB might also be able to monetize commercial web presence on their site. Currently, it's free for companies to setup a FB page, but with the value that even small businesses are seeing from that, it would be an easy sell to generate revenue.
If (and it's a huge if) FB can maintain its spot as the dominant social network, it will be very successful financially. But history shows that online communities are incredibly fickle and will jump to a better option when it's presented. AOL, Friendster, MySpace and many others have learned this less the hard way. The danger for FB is that they'll lose their dominant position and, if that happens, the stock will drop to pennies per share. That's why I'd never invest in them...there's definite upside, but the downside is a sheer cliff rather than a steady decline.
If I understand correctly, US law requires companies with more than 500 investors to *publish their finances*, but they don't have to have public shares.
The moment they change things in a way to monetize the system is the day users leave in droves to an alternative. They put those ad's front and center, or make you start watching video's to access your wall or any other of a million things that could make them more money and they are going to drive people away.
Maybe they will develop some new neat AI that can figure out when people are about to be in the market for a product and sell advertising to companies that sell that product but I wouldn't bet $1 on that. I'd wager significant money that they have maximized their revenue generation at this point and any attempt to increase it is only going to drive users to alternative platforms.
There is value in the number of people on the platform but it's not difficult to create these communities, the sheer number of them that we've been through at this point is evidence of that. FB has been remarkably deft at advancing features enough to stay at the top but the minute they start annoying users with advertising is the minute people create google plus accounts and start using them. All the evidence indicates FB ads are far less effective than other souces, and that's not a good sign for the future of this company.
That's an unfair comparison. People could see how Google would make money from day one - me included. There is so much uncertainty around Facebook that its a different ball-game. Here are a few obvious issues around Facebook
- Untested and very young CEO with questionable integrity
- Poor privacy record
- Pays a PR company to discredit competition (highly unethical)
- Product of questionable origins (highly suspect)
Everything about Facebook smells bad from day one. The obvious way up from here is to intrude on people's privacy even more - ie. to sell its loyal customer data to the highest bidder with even more sensitive information.
If you want to put your money into Facebook, go ahead. If it makes you a lot of money, then congratulations - but don't mortgage your house on it ... because its unfair for others to pay for your welfare... GM made the right move by pulling the plug on this crowd, I would too.
AC
What is also interesting is that Zynga's stock dropped 23% during the day, and ended the day at -13%. Nasdaq actually had to stop trading on Zynga twice to keep the stock from dropping even further. And they bring in a lot of money for Facebook. So obviously Facebook's performance in the IPO has shaken a lot of people even in regards to one of their largest business partners.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
He's not right. There are lots of ways to profit from investing, besides just selling it off on the market for a higher price. The first method that comes to my mind is shorting, where an investor sells stocks borrowed from someone else with the promise of buying them back later to return them. If, at any time during the loan, the price drops below what the borrower sold the stock for, the borrower can buy back the necessary stocks to return the loan, and have made a hefty profit. Of course, the lender is now left with shares that are worth less, but that's always a risk of investing.
It all ultimately amounts to the same thing - you make money by convincing someone else to give them to you in exchange for the stock. In that model, the sole value of the stock is in the potential to convince another person to part with more money - if you're the last guy in the chain, all you have is a worthless piece of paper. Yes, in theory it gives you some voting rights, but those are meaningless in practice for vast majority of publicly trading companies.
People still print ads? On paper?
It's that stuff you see outside, under the daystar.
What is "outside"? Do you mean the unwalled green and blue room?
Ceci n'est pas un sig.
I'm prepared to forgo any further interaction with humanity if signing up for Facebook is the price.
"Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?" - Patrick Henry
Google serving ads is different. For anyone seaching for a product they can throw sponsored links at the top of the search results page and they are often relevant to the person searching. This particular advertising mechanism actually makes sense and is probably one of the most effective around. Not that everyone is doing a search where ads are welcome, but that nobody goes looking for products or services on Facebook ads there are never relevant to what people are doing. I suspect FB click-through rate is much lower than Googles. OTOH, FB ads have images and reflect your "likes" even if they are not related to what you're doing at the moment. I suppose the jury is still out on this.
That is true of the search network - but not so much the display network, which Google also aggressively push.
We are running a campaign for our software/web development company as an experiment at the moment. After reviewing the data I was surprised to see we only had a handful of clicks coming through from the 'Search' part of it - the vast majority came from the Display Network (i.e, sites/blogs/etc running Google AdSense to make money). In our first few days it was about a 70:3 ratio.
We decided to run it like that for 2 weeks and then turn off Display and see how it goes (this happened yesterday so no real data yet).
When I started looking for what people thought was the best strategy, I found (as you might expect) a lot of mixed opinions. I did find a Google whitepaper that suggested that using the Display network will result in a better net result, but I haven't read it closely yet.
We - like I imagine most businesses - are not just interested in clicks, we're interested in 'leads'. My data is obviously from a very small period of running ads, but so far it seems that the bulk of the traffic coming from the Display network is "unqualified" and will have a lower overall "yield" when compared to the Search traffic - people actively seeking stuff.
It is pretty interesting stuff to play with though, especially for me - I have no marketing/sales background; I know a lot of this stuff is old hat to people that have been doing it for a while but it's fascinating to see the differences in how people click and what they do in this sort of way.
I'm inclined to agree with you, and am equally concerned that google itself will hit the skids when everybody eventually finds out how negative the ROI is on advertising. Remember, the people who are telling you that marketing works great are all in marketing.
If you are not allowed to question your government then the government has answered your question.
FB knows your stated desires. GOOG knows you're hidden desires.
Between the two of them, they could create one heck of a phone sex operation.
Yeah, but "FaceGOOG"? I wouldn't go for it. :-P
"What in the name of Fats Waller is that?"
"A four-foot prune."
What's more significant is that Zynga crashed - down 17% and trading halted for almost an hour. If FB were so great, why did their BFF take a nasty shot to the head?
Let's call it what it is, Anti-Social Media.