| Key quote:
"This is not about the revenue streams Facebook has; it’s about the revenue streams they’re about to have." Everyone who's been defending Facebook's $33B valuation is projecting the success of some yet-to-be-developed or nascent product at Facebook. Projecting growth based on past earnings and current growth rate is one thing. But imagining hypothetical revenue streams of yet-to-be validated products is batshit crazy. It doesn't matter how obvious or inevitable people think it may be or what the trends are. There's no track record with any of these if-they-wanted-to-they-could-do-this-tomorrow-and-make-billions products. "Facebook Credits are poised to be this generation’s American Express" Am I the only one that thinks Facebook isn't as omnipotent and in total control of its user-base as people like to think? Everyone is making these projections about users just falling inline with Facebook's potential revenue models, but they forget the shitstorm that was Beacon. Clearly, Beacon was a direct grab at a sustainable business model and it violated many of their user's trust. Facebook may act like its a benevolent dictatorship, but there's always been an element of democratic decision-making at the behest of angry users. And those concessions always occur at the boundary between potential profitability and privacy. So many are quick to use Google as a benchmark when Google itself was an extraordinary circumstance. It was recently mentioned that Larry and Sergey were willing to part with their company for $750,000.[1] Now, you could argue if Bill Gross never existed, Google would never have be Google because they wouldn't have developed Adwords and have a perpetual license to Overture patents. And Google's advertising is its flagship product, accounting for 97% of its revenue.[2] Google was a net win for the internet. It helped structure and organize the majority of information available on the net, and combined the best interest of their users (accurate, quality search) with the best interest of businesses (targeted advertising, purchasing intent). They unlocked tremendous wealth on a new platform and reaped the rewards. Facebook has clearly had a social impact. Just like text-messaging and AOL Instant Messenger did. But the question of if it has unlocked any huge wealth the way Google has is yet to be seen. [1] http://www.sec.gov/Archives/edgar/data/1288776/0001193125091...
[2] http://tech.fortune.cnn.com/2010/09/29/excite-passed-up-buyi... |