Posts for Ticker ‘Facebook’

The Death Of Web 2.0: A Business Without Money

MySpace, Facebook, and YouTube are among the most visited websites in the world. Unfortunately, no one can figure out how to make money from them. According to comScore, Facebook, the smallest of the three, had 35.7 million unique visitors in the US last month.

No matter their colossal size, these internet properties bring in very little revenue and probably make very little money. Facebook was given a valuation of $15 billion last year. That may no longer be more than a pipe dream. Rupert Murdoch at News Corp (NWS) says that MySpace is missing its revenue targets. Its sales are under $1 billion, no match for old-line portals like AOL and Yahoo! (YHOO).

According to the FT "The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers."

Google has no trouble telling its shareholders that any real money from its video site, YouTube, is well in the future. And, YouTube has the largest share of the online video market. But, much of the content posted there is of poor quality and hard to put into categories. Why would marketers want to be side-by-side with crap?

At large social network sites, finding the common bonds among the tens of millions of people who keep personal pages has been difficult. That makes targeting advertising almost impossible. There is also a concern that people who spend a lot of time at MySpace and YouTube are shut-ins with low household incomes.

Digg.com, Sphere, Newsvine, Del.icio.us. Dead as doornails.

Douglas A. McIntyre

Posted on: May 27, 2008 – 4:48 am in Internet, , , , , , , ,

Put A Facebook On Your BlackBerry (RIMM, GOOG, MSFT)

Research In Motion (NASDAQ:RIMM) has launched Facebook® for BlackBerry® Smartphones.  This announcement came out of CTIA Wireless IT and Entertainment 2007.  This will allow BlackBerry software applications that enable fast, streamlined and optimized mobile access to the popular Facebook social utility using a BlackBerry smartphone and BlackBerry system architecture and Facebook Platform for Facebook users.

T-Mobile USA has been selected to be the first carrier to provide the new software application to its customers.

Mike Lazaridis, founder of Research In Motion, will join Dustin Moskovitz, co-founder of Facebook, to formally unveil and demonstrate the Facebook for BlackBerry Smartphones application today at the CTIA Wireless I.T. & Entertainment show in San Francisco. This application will be available for download today.

Facebook users can wirelessly send and view messages, photos, pokes and Wall posts. The rich, native application goes beyond browser-based access, automatically pushing notifications to the user’s BlackBerry smartphone as friends and colleagues send notes, Wall posts or pokes. The application allows users to take a photo, upload it to the site with captions and tags; quickly and easily invite friends; manage events; manage photo albums; and manage their status while on the go.

This does have some business applications depending upon your business, but it may just end up being another time hog.  The take from 24/7 Wall St. on this is that the announcement will be a harbinger for many more similar announcements regarding other social networking sites with phone makers and with carriers.  This trend has already started as social networking has already started going mobile (MySpace-Helio and others).  Free weekly email sign-ups can be accessed here. 

Now the question comes down to whether this and other deals make a rumored and long-speculated investment from Google or Microsoft come with a higher price tag.

Jon C. Ogg
October 24, 2007

Jon Ogg is the editor of the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers. 

Posted on: October 24, 2007 – 12:00 pm in Internet, , , ,

Is Facebook Worth More to Microsoft Than Others? (MSFT, GOOG, YHOO)

The WSJ (wsj.com) (subscription required for full access) has reported that Microsoft (NASDAQ:MSFT) may be making an investment into Facebook that would supposedly value Facebook at $10 Billion.  That doesn’t mean this is a $10 Billion buyout nor that $10 Billion is what Microsoft will pony up for the company.  Google is also reported as being interested, althogh this situation has been covered from almost every single angle out there in recent months.

But it would put a substantial valuation on this social networking site.  After the success of News Corp’s (NYSE:NWS) MySpace and after the ramp of Google’s (NASDAQ:GOOG) YouTube, everyone has catching up to do.  The space is not wide open, but it isn’t yet closed.

Jon C. Ogg
September 24, 2007

Posted on: September 24, 2007 – 1:59 pm in Internet, , , , , ,

Why Facebook Is Worth $0

CNN Money used the number $10 billion when talking about the valuation of Facebook, the social network.There was a bit of joking in that. Yahoo! (YHOO) apparently considered a $1 billion bid less than a year ago. Google (GOOG) and Microsoft (MSFT) are considered buyers because Facebook has 30 million active users and none of these companies has a big social network like MySpace, the company bought by Rupert Murdoch’s News Corp (NWS) for $565 million.

The feeling is that Murdoch got a deal on the largest of the social network sites. But one industry estimate says that MySpace will only do $200 million in revenue this year. But, how can a property with 44 billion monthly page views bring in so little revenue?

The answer is that social network sites deliver an audience that its almost useless to online marketers. The people who go to sites like Facebook cannot be organized in any logical way as visitors to Yahoo! Finance or AOL Movies can be.

One of the dirty little secrets about the internet is that much of the advertising inventory is sold as remnants for well under $1 per thousand pageviews. The CPM that advertisers would pay to be on the front page of CNN Money could be closer to $40. But, a large portion of the advertising run online is dancing aliens selling mortgages. This is because much of the internet’s traffic cannot be organized and sold to highly targeted audiences. So, this inventory goes for a song.

Social network audiences probably carry the lowest value of any ad inventory on the web. An educated guess would be that if MySpace will do $200 million in revenue this year, Facebook might do $50 million. And, that is not likely to hit $500 million anytime soon, It may never happen.

Facebook’s lack of attractiveness to advertisers is its valuation Achilles Heel.

No one has bought the company because it is not worth much.

Douglas A. McIntyre can be reached at 24/7 Wall St.

Posted on: July 13, 2007 – 4:44 am in Uncategorized, , , , , ,

Facebook Takes Off

Facebook’s May numbers show that the social network site has grown 89% in one year in terms of unique visitors. Page views have more than doubled during that period, according to comScore.

The rapid growth of the web operation makes it a true competitor to News Corp (NWS) MySpace and an increasingly attractive acquisition candidate for one of the large web portals that needs to add to mass audience and has little presence in social networking. Yahoo! (YHOO) and Microsoft’s (MSFT) MSN are the two most logical buyers.

While MySpace was sold for $565 million, it is likely that the price inflation that goes with properties that might involve an auction process among large web companies could put Facebook’s value at over $2 billion.

Douglas A McIntyre

Posted on: July 5, 2007 – 12:53 pm in Uncategorized, , , , ,