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comment by ecib
ecib  ·  4597 days ago  ·  link  ·    ·  parent  ·  post: There is one born every minute?
This valuation assumes massive increase in
    the rate
of revenue
    growth
. Not just massive growth in revenue. At a time when new subsriber rate is slowing. Also at a time where major advisers are lambasting their CTR and general effectiveness as a platform for serving ads. Many brands are realizing that the best advertising value FB provides is from their free services (engagement with fans on their brand pages).

So they have to figure it a way to get users to click on adds, despite the fact that the reason the users are there is fundamentally different from the reasons a user goes to google. If you go to google you are looking for something, and the add is often an answer. People on FB just want to hang out with friends and family and share some pictures. Ads detract from their enjoyment of the site.

I think the only way they will be able to monetize the way they need to is to fundamentally change the site such that they begin to make the service less enjoyable to users, thus opening the door for the next social network to come in and disrupt. Maybe they will not do that, just hang in their with a good long term strategy of not pissing off their users, and the people that over valued this will get burned.





lessismore  ·  4597 days ago  ·  link  ·  
The IPO was certainly underwhelming. I can only imagine it to go down hill from here.