Linked by Howard Fosdick on Wed 5th Sep 2012 05:24 UTC
In the News Remember the dot com debacle of a decade ago? Well, it's back, this time in the form of Facebook. Since its high-profile public offering last May at over $38/share, FB is now down to about $18/share. Management is finding that running a public company is very different than one privately held, as people variously blame Mark Zuckerberg (or not), CFO David Ebersman, lead IPO underwriter Morgan Stanley, and even the NASDAQ stock exchange. The real problem, of course, is that Facebook went public even as its business model desperately searches for new revenues. Let's just hope they don't pull a Digg and fatally redesign the whole site in response.
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RE[3]: Comment by stabbyjones
by unclefester on Wed 5th Sep 2012 12:36 UTC in reply to "RE[2]: Comment by stabbyjones"
unclefester
Member since:
2007-01-13

Facebook just needs a better monetization strategy, because it's too average at the moment.


The fact is that most "tech" companies like Facebook, (Twitter, Amazon, Groupon, Zynga, Yahoo, Myspace etc) are basically elaborate Ponzi schemes. Their "business plan" is to make a lot of money for the founders and venture capitalists by floating the company. They don't really have a plan for long term profitability and simply cash out before the company eventually collapses.

Edited 2012-09-05 12:42 UTC

Reply Parent Score: 7

Soulbender Member since:
2005-08-18

They don't really have a plan for long term profitability and simply cash out before the company eventually collapses.


I don't think Amazon fits in this category since they actually have products and services that they're selling.

Reply Parent Score: 4

unclefester Member since:
2007-01-13

I don't think Amazon fits in this category since they actually have products and services that they're selling.


Amazon has a valuation of $112b. Yet it has only $370m earnings and no profits (after 14 years!). If Amazon was a real world business the management would be immediately fired and the company wound up.

Reply Parent Score: 2

marafaka Member since:
2006-01-03

Yeah! My aunt buys eggs for 2 bucks and sells them for 1 and she often complains: I sell them dirt cheap but still there is no profit!

Reply Parent Score: 2

RE[4]: Comment by stabbyjones
by vaette on Wed 5th Sep 2012 13:40 in reply to "RE[3]: Comment by stabbyjones"
vaette Member since:
2008-08-09

The costs of running Facebook are small (great scale, not terribly complex software involved) and they have something like a billion active and rather deeply engaged users. They also know more about their users than just about any other service in the world. If Facebook cannot make money on advertising then the advertising model for services on the internet is truly and finally dead.

Which is a possibility, but I am more likely to bet that Facebook will in the end be reasonably profitable.

Reply Parent Score: 4

unclefester Member since:
2007-01-13

If Facebook cannot make money on advertising then the advertising model for services on the internet is truly and finally dead.


That's the reality.

Reply Parent Score: 2

RE[4]: Comment by stabbyjones
by Alfman on Wed 5th Sep 2012 14:07 in reply to "RE[3]: Comment by stabbyjones"
Alfman Member since:
2011-01-28

unclefester,

"The fact is that most 'tech' companies like Facebook, (Twitter, Amazon, Groupon, Zynga, Yahoo, Myspace etc) are basically elaborate Ponzi schemes. Their 'business plan' is to make a lot of money for the founders and venture capitalists by floating the company."

No denying any of that. I feel like calling it "business 2.0".

Reply Parent Score: 6