While the IPO was bad for investors, it was certainly good (financially) for Facebook. They definitely maximized their earnings from the IPO and Zuckerberg really made out well getting just under $38/share for his $1.1bn in shares.
In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did.
The early investors made out like kings, but I doubt Facebook's employees are in a cheery mood as they watch their options sink underwater and their vested paper wealth dissipate while waiting for the lockup period to end.
> In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did.
Google priced their shares based on an auction, I'd say it was priced right. It was also much smaller because it wasn't a bunch of insiders trying to dump their shares at an inflated value.
Google sold 19.6M shares, 14.1M of them were from corporate. There were 271M shares in total, so only a very small amount of the company was transferred. In contrast for FB, there are 2.14B total shares and the IPO was for 421.2M of them, a much larger percentage of the company. In addition, insiders made up 241M of those shares sold, which is actually the majority of the IPO.
I assume it was financially healthy for a very small group of people within Facebook. Most of the employees would be on lockdown before they can sell their stocks on the public market, no?
The game is not as simple as maximizing the value of just the shares being sold on day 1. Post-IPO, a company's shareholders are largely the same as pre-IPO... the value they achieve for their shares in will be determined over a much longer time frame. Reputation / performance matters.
You'd be gambling enough already if you bought FB stock at 20x earnings (the tech norm for well-established companies), let alone at 100x.
At 20x, you'd be speculating on FB's ability to sustain its current earnings power in an increasingly competitive and verticalized space. That's a tough proposition, particularly since social graphs are not as much of a competitive moat as people thought (Orkut for example had at some point virtually the entire online population of Brazil engaged with it, virtually none now), and everybody and their mother is investing in a new social network for a different vertical.
Of course, it is entirely possible that FB will not only maintain its market position, but also increase its earnings power five-fold or whatever. In that scenario, they would have squashed most other vertical social networks and found a sustainable business model (they haven't really yet, see [1]).
Again, not impossible, but bear in mind what assumptions the current valuation implies. It's not surprising to see the market re-adjust its valuation after the IPO craze.
1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and
2. Facebook.
(1) I don't care about. (2) is the interesting one. You'll note that I don't include the employees in the list of injured parties. They're largely in a lockout anyway (I assume?). Whether it opens at $38 and drops to $30 or starts at $20 and climbs to $30 is of little consequence.
Facebook strategically seems concerned with only two companies: Google (disclaimer: I work for Google) and Apple, both of which have established, proven businesses and strategic assets in Internet and mobile going forward.
Facebook is a platform company without a mobile platform in a world becoming increasingly mobile.
Facebook has a lot of cheerleaders, optimists and pundits all backing this idea that the potential of all this data is huge, so much so that I believe they started to believe their own positive press. It's an easy trap to fall into.
But make no mistake: this is bad for Facebook. Sure some investors, Zuck and (maybe?) some employees made a few more dollars but Facebook doesn't need the money and neither do most of the investors. But that's incredibly shortsighted.
Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Instead the press is "how low will it go?" What kind of position is that to be in if, say, you're trying to negotiate a $1B+ stock-based acquisition?
Anyway, I'm glad about this drop. Not out of any kind of schadenfreude but because the market is acting... rationally. These P/Es were never justified and instead of not mattering and the stock skyrocketing anyway (which would happen were we in a bubble, which we are not), the stock is seeking a more appropriate level.
This is good for us, the tech industry and the market and the fact that some choice clients of Goldman Sachs and Morgan Stanley got bilked along the way is just gravy as far as I'm concerned.
EDIT: to clarify, I don't really have a position on what the appropriate level is other than $38 is and was too high. It could still well go lower than $30.
> Anyway, I'm glad about this drop. Not out of any kind of schadenfreude but because the market is acting... rationally. These P/Es were never justified and instead of not mattering and the stock skyrocketing anyway (which would happen were we in a bubble, which we are not), the stock is seeking a more appropriate level.
Agreed entirely. Everyone's been acting disappointed by the lack of an IPO extravaganza, but that would have been horrifying-- this drop should be heartening to anyone in tech.
Honest question: Why do you think that a share price of $30 is appropriate? Facebook still has a P/E more 6 times that of Google or Apple. To me (I don't understand a lot about the stock market), $30 sounds just as arbitrary as $38.
The problem is that mobile is just one of their problems. They need to increase their monetization by an order of magnitude per user. This will require them going from a niche advertiser to taking over a significant fraction of all worldwide ad revenue, this is no small feat. They also need to tackle mobile better and respond to all the other competitive threats that will come their way in the next decade.
They have several thousand employees and a few billion in cash now. They need to pivot and scramble like crazy. If they don't they will end up on the wrong side of the inflection point and on a glide slope to obsolescence. I don't get the sense that people inside facebook see things the same way, I think they see themselves as the crowned king of social, and with the IPO they are transitioning to being a value company, which could not be more wrong.
I would argue that the drop isn't from the market acting rationally at all, but in response to yet more hype supplied by the press, specifically the "how low will it go?" narrative you mention.
>But make no mistake: this is bad for Facebook. Sure some investors, Zuck and (maybe?) some employees made a few more dollars but Facebook doesn't need the money and neither do most of the investors. But that's incredibly shortsighted.
>Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Why do you think the momentum of their stock has an effect on facebook's ability to attract talent? That's certainly not something I'm looking at (future stock price, yes; current momentum, no). Facebook's stock performance thus far has not changed my view of the potential future success of the company, and I think anyone who has actually done their homework regarding the Facebook valuation would feel the same way.
Clients of investment banks in an IPO have a choice to invest or pass on the deal. There are many things they consider when making this decision, and the price of the deal is one of those. Assuming they are not given inaccurate information, they are not getting "bilked" by the banks if the stock goes down in the aftermarket. The clients know this is a possibility, and they chose to invest at $38 per share. Right now those shares are worth less than the offer price, which is disappointing to the clients, but they made the decision to invest at $38 per share.
Can anyone explain to me how the P/E ratio is a meaningful metric for a company's stock price and what it "should be" at when that company does not distribute earnings to the shareholders?
I don't understand why this metric is tossed around for stocks in which the regular shareholders receive no compensation for the shares owned (nor have any voting power for that matter). Owning stock in these companies seems like a pure speculation move, as the only upside to be seen in purchasing shares is that one day other people will value the share higher than the day you bought it.
I would also think that it's easier to build a mobile app/social network that competes with Facebook than it is to build a mobile OS/device that competes with Android/iOS.
Facebook is a platform company without a mobile platform in a world becoming increasingly mobile.
I agree that Facebook sees mobile as a serious problem, as evidenced by their planned foray into mobile phones, however I think it's a distraction and will be a money pit for them. Much as Microsoft felt they had to get into search to compete against Google (they still don't compete in a meaningful way), Facebook feels they have to compete in the mobile space, but will never be able to execute as well as Apple on hardware or Google on integration with web services. It's very hard to get right, and I doubt very much they have the product design talent and supply chain experience to pull it off consistently and long-term, and it is way off their main area of competence. I'd be very surprised if they do well with a mobile platform given all the challenges it presents - they should work on improving their offerings on the main platforms instead, otherwise they will have 4 Facebook app binaries instead of 3 to maintain, and no obvious advantage as most of the users will not be on their phone.
Mobile is a complement to other devices, and a way of accessing the web, it is not a new segment which is orthogonal to web use - I'd argue mobile has only become popular as handsets became capable of accessing the web fully, and mobile apps may or may not win out over websites for some services, but for websites like Facebook they offer no real advantages save more access to user hardware for uploading pics etc. - something that a website can offer with an API and third party apps. Mobile apps are of course competing with the desktop, and will continue to do so, but not really with websites, they usually complement websites and use their APIs, not replace them.
Facebook's real problem, and real competitor, is the open web.
Facebook has been opposed to opening up from the beginning, and has pursued a very successful strategy of corralling their users, and requiring anyone who wants to interact with the service to sign in and share their info - I'm constantly plagued by their login messages when I visit a page. At some point this walled garden is going to start feeling very restrictive - it only works if there is a continually growing, or at least not shrinking, pool of people using the service - if it feels like everyone is logged in all the time, otherwise it becomes a bit of an echo chamber, infested with spambots and spammy companies like Zynga, and if your friends don't bother to check it any more or post, what's the point?
I suspect as the gloss wears off Facebook, particularly if they make a foray into mobile and waste energy there, it will be harder and harder to keep users inside their bounded version of the web, and competitors without the barrier to entry for readers (sign-in required for all essential services), will come in and capture user interest, as pinterest has for example.
As to their stock price, given their current revenue/profits and potential future profits, I'm astounded anyone still believes it was worth > $20B in today's money.
This kind of statement first has to be qualified as "two parties immediately hurt by this. It is common for price moves in a well known stock to exert a strong psychological influence on similar stocks and on the broader market. All markets are subject to flux but where things have fluxed to currently, it seems quite possible that others could be "injured" here.
Sure Facebook's move could, might, be good for the tech industry if investor perception separated Facebook from the rest of tech industry. If not, it is easy for things to go from irrational optimism to irrational pessimism.
>1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and
>2. Facebook.
Wrong. FB did crazy volume on the first day at $45 to $38. 580 million shares were traded and the total number of shares in IPO was only ~470MM IIRC. That does not mean that the big clients unloaded all their shares because of shares getting traded multiple times and by HFT, but the really smart ones(most of them I would guess) sold their shares above $38 and some even went short and are making bank now, while the retail investors and other financial companies who bought the first day are left holding the bag.
I know everyone keeps pointing to the 100:1 P/E but with 900 million active users that is more than 100 bucks per user. Is the average FB user worth 100 dollars to FB?
I think, the Facebook stocks down is not so tragic. Zuck well know what is real price of Facebook stocks and can take a bull strategy. And if it, this terrible falling is not so terrible for Zuck. It just my point of view, but it have some chance to be a real picture.
I'm agree with many hn's that mobile is a general way for today Facebook. But today main Zuck plan look like a only increasing ads on Facebook - I'm talking about new Promote button - http://www.socialbakers.com/blog/587-get-ready-4-new-faceboo...
Let me be honest - I'm not undersand Zuck. He have long war with Google for search traffic but still not released a Facebook Search. He can build a many new sections with new features (with ad) but still not. Well, he can experience with new brand pages (bild a new guidline and start migrate website inside Facebook and host it) or choose a absolutley new way of monetization (they are obvious) but this all still do not. I think, Zuck must hire a new CEO and calm down, then stocks can grow up to $160-$220 and more.
Supply and demand is the answer, although probably not the one you are looking for!
The WSJ reported the options market has just opened for FB stocks. A lot of people seem to be very bearish about FB so a lot of short action could significantly impact the demand of FB stock.
I'm an amateur at this though, and would love someone to correct me if I'm completely off here :)
If I could explain why it's down 7% today then I could also explain why it's gonna be up/down n% tomorrow, and m% the next day. Unfortunately I'm not quite that smart.
Does anyone have any insider info on when Facebook's employee lockup period ends? The shares won't end up worthless but I can't see them being worth billions.
FB IPO is bad for the inflated startup world around the FB ecosystem. All stuff "social" and "connected". It's hopefully good for everyone else who is bringing some value, but was turned down/undervalued, because they're not social enough.
No it's not. Facebook is an anomalous company so there's not much worth in comparing it to the rest of the industry. The fact is, some $10 billion dollars just entered investor hands who will no doubt be ploughing it back into (mostly Bay Area) startups for years to come. And Facebook becoming more acquisitive certainly helps as well.
FB's IPO is based on imaginary numbers. 900 million users? How many actual users. Seems to me that the suits REALLY wanted to make this a $100B company regardless of how much worth it actually had.
There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebook and Google when it comes to figuring out what ads people want to see.
Let's say I'm on Facebook and I ask my friends for advice on which is the best lead pencil to purchase. They might tell me a few recommendations, and Facebook may even start producing ads based upon that conversation should I choose to revisit it.
But then I want to actually PURCHASE the lead pencil. Where am I going to go to look for that? Google. It will give me price recommendations, and once I've done the search, Google will continue to follow me around with ads tailored to my search.
If FB valuations keep slipping, it will put downward pressure on all social startup valuations, which means those companies have less money to throw around.
This is great new for non-social startups. It could mean everything from cheaper rent for office space in SF to a larger pool of available talent to recruit from.
You would have to be nuts now to even think about taking a job at Facebook and if you are there, I'd think about leaving in all seriousness.
I predict that Facebook is going to have a hard time hiring good talent now. This is one of the downsides of filling up your stock with a lot of hot air. It's all short term gain.
is there a point after which a decrease fulls itself ? I know nothing about stock market, first day drop might signals frailty or wrong pricing but won't stable negative continuity trigger a global resell reflex ?
[+] [-] vibrunazo|14 years ago|reply
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...
[+] [-] slug|14 years ago|reply
[+] [-] Osiris|14 years ago|reply
In contrast to the Google IPO in which the stock skyrocketed on the first day and really took off after that. Google may have been able to extract quite a bit from their IPO than they did.
[+] [-] gamble|14 years ago|reply
[+] [-] jonknee|14 years ago|reply
Google priced their shares based on an auction, I'd say it was priced right. It was also much smaller because it wasn't a bunch of insiders trying to dump their shares at an inflated value.
Google sold 19.6M shares, 14.1M of them were from corporate. There were 271M shares in total, so only a very small amount of the company was transferred. In contrast for FB, there are 2.14B total shares and the IPO was for 421.2M of them, a much larger percentage of the company. In addition, insiders made up 241M of those shares sold, which is actually the majority of the IPO.
[+] [-] badusername|14 years ago|reply
[+] [-] tomkarlo|14 years ago|reply
[+] [-] arturadib|14 years ago|reply
You'd be gambling enough already if you bought FB stock at 20x earnings (the tech norm for well-established companies), let alone at 100x.
At 20x, you'd be speculating on FB's ability to sustain its current earnings power in an increasingly competitive and verticalized space. That's a tough proposition, particularly since social graphs are not as much of a competitive moat as people thought (Orkut for example had at some point virtually the entire online population of Brazil engaged with it, virtually none now), and everybody and their mother is investing in a new social network for a different vertical.
Of course, it is entirely possible that FB will not only maintain its market position, but also increase its earnings power five-fold or whatever. In that scenario, they would have squashed most other vertical social networks and found a sustainable business model (they haven't really yet, see [1]).
Again, not impossible, but bear in mind what assumptions the current valuation implies. It's not surprising to see the market re-adjust its valuation after the IPO craze.
[1] http://cdixon.org/2012/05/15/facebooks-business-model/
[+] [-] r00fus|14 years ago|reply
That the social graph feeds ubiquity and vice-versa is what makes the proposition appealing.
Google+ is about the only real competition, and it's really designed for a separate purpose.
[+] [-] cletus|14 years ago|reply
1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and
2. Facebook.
(1) I don't care about. (2) is the interesting one. You'll note that I don't include the employees in the list of injured parties. They're largely in a lockout anyway (I assume?). Whether it opens at $38 and drops to $30 or starts at $20 and climbs to $30 is of little consequence.
Facebook strategically seems concerned with only two companies: Google (disclaimer: I work for Google) and Apple, both of which have established, proven businesses and strategic assets in Internet and mobile going forward.
Facebook is a platform company without a mobile platform in a world becoming increasingly mobile.
Facebook has a lot of cheerleaders, optimists and pundits all backing this idea that the potential of all this data is huge, so much so that I believe they started to believe their own positive press. It's an easy trap to fall into.
But make no mistake: this is bad for Facebook. Sure some investors, Zuck and (maybe?) some employees made a few more dollars but Facebook doesn't need the money and neither do most of the investors. But that's incredibly shortsighted.
Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Instead the press is "how low will it go?" What kind of position is that to be in if, say, you're trying to negotiate a $1B+ stock-based acquisition?
Anyway, I'm glad about this drop. Not out of any kind of schadenfreude but because the market is acting... rationally. These P/Es were never justified and instead of not mattering and the stock skyrocketing anyway (which would happen were we in a bubble, which we are not), the stock is seeking a more appropriate level.
This is good for us, the tech industry and the market and the fact that some choice clients of Goldman Sachs and Morgan Stanley got bilked along the way is just gravy as far as I'm concerned.
EDIT: to clarify, I don't really have a position on what the appropriate level is other than $38 is and was too high. It could still well go lower than $30.
[+] [-] Cushman|14 years ago|reply
Agreed entirely. Everyone's been acting disappointed by the lack of an IPO extravaganza, but that would have been horrifying-- this drop should be heartening to anyone in tech.
[+] [-] callmeed|14 years ago|reply
2(a). The Instagram team
700M of the 1B acquisition was stock. Assuming they didn't sell it yet, that's a good amount of money lost.
[+] [-] ma2rten|14 years ago|reply
[+] [-] InclinedPlane|14 years ago|reply
They have several thousand employees and a few billion in cash now. They need to pivot and scramble like crazy. If they don't they will end up on the wrong side of the inflection point and on a glide slope to obsolescence. I don't get the sense that people inside facebook see things the same way, I think they see themselves as the crowned king of social, and with the IPO they are transitioning to being a value company, which could not be more wrong.
[+] [-] chucknelson|14 years ago|reply
[+] [-] eshrews|14 years ago|reply
>Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Why do you think the momentum of their stock has an effect on facebook's ability to attract talent? That's certainly not something I'm looking at (future stock price, yes; current momentum, no). Facebook's stock performance thus far has not changed my view of the potential future success of the company, and I think anyone who has actually done their homework regarding the Facebook valuation would feel the same way.
[+] [-] traughber|14 years ago|reply
[+] [-] brown9-2|14 years ago|reply
I don't understand why this metric is tossed around for stocks in which the regular shareholders receive no compensation for the shares owned (nor have any voting power for that matter). Owning stock in these companies seems like a pure speculation move, as the only upside to be seen in purchasing shares is that one day other people will value the share higher than the day you bought it.
[+] [-] imcqueen|14 years ago|reply
[+] [-] grey-area|14 years ago|reply
I agree that Facebook sees mobile as a serious problem, as evidenced by their planned foray into mobile phones, however I think it's a distraction and will be a money pit for them. Much as Microsoft felt they had to get into search to compete against Google (they still don't compete in a meaningful way), Facebook feels they have to compete in the mobile space, but will never be able to execute as well as Apple on hardware or Google on integration with web services. It's very hard to get right, and I doubt very much they have the product design talent and supply chain experience to pull it off consistently and long-term, and it is way off their main area of competence. I'd be very surprised if they do well with a mobile platform given all the challenges it presents - they should work on improving their offerings on the main platforms instead, otherwise they will have 4 Facebook app binaries instead of 3 to maintain, and no obvious advantage as most of the users will not be on their phone.
Mobile is a complement to other devices, and a way of accessing the web, it is not a new segment which is orthogonal to web use - I'd argue mobile has only become popular as handsets became capable of accessing the web fully, and mobile apps may or may not win out over websites for some services, but for websites like Facebook they offer no real advantages save more access to user hardware for uploading pics etc. - something that a website can offer with an API and third party apps. Mobile apps are of course competing with the desktop, and will continue to do so, but not really with websites, they usually complement websites and use their APIs, not replace them.
Facebook's real problem, and real competitor, is the open web.
Facebook has been opposed to opening up from the beginning, and has pursued a very successful strategy of corralling their users, and requiring anyone who wants to interact with the service to sign in and share their info - I'm constantly plagued by their login messages when I visit a page. At some point this walled garden is going to start feeling very restrictive - it only works if there is a continually growing, or at least not shrinking, pool of people using the service - if it feels like everyone is logged in all the time, otherwise it becomes a bit of an echo chamber, infested with spambots and spammy companies like Zynga, and if your friends don't bother to check it any more or post, what's the point?
I suspect as the gloss wears off Facebook, particularly if they make a foray into mobile and waste energy there, it will be harder and harder to keep users inside their bounded version of the web, and competitors without the barrier to entry for readers (sign-in required for all essential services), will come in and capture user interest, as pinterest has for example.
As to their stock price, given their current revenue/profits and potential future profits, I'm astounded anyone still believes it was worth > $20B in today's money.
[+] [-] joe_the_user|14 years ago|reply
This kind of statement first has to be qualified as "two parties immediately hurt by this. It is common for price moves in a well known stock to exert a strong psychological influence on similar stocks and on the broader market. All markets are subject to flux but where things have fluxed to currently, it seems quite possible that others could be "injured" here.
Sure Facebook's move could, might, be good for the tech industry if investor perception separated Facebook from the rest of tech industry. If not, it is easy for things to go from irrational optimism to irrational pessimism.
[+] [-] recoiledsnake|14 years ago|reply
>1. The premiere clients of Goldman Sachs and Morgan Stanley who bought into the lie that FB should trade at >100:1 P/E; and
>2. Facebook.
Wrong. FB did crazy volume on the first day at $45 to $38. 580 million shares were traded and the total number of shares in IPO was only ~470MM IIRC. That does not mean that the big clients unloaded all their shares because of shares getting traded multiple times and by HFT, but the really smart ones(most of them I would guess) sold their shares above $38 and some even went short and are making bank now, while the retail investors and other financial companies who bought the first day are left holding the bag.
[+] [-] stonemetal|14 years ago|reply
[+] [-] coreyo|14 years ago|reply
[+] [-] bourdine|14 years ago|reply
I'm agree with many hn's that mobile is a general way for today Facebook. But today main Zuck plan look like a only increasing ads on Facebook - I'm talking about new Promote button - http://www.socialbakers.com/blog/587-get-ready-4-new-faceboo... Let me be honest - I'm not undersand Zuck. He have long war with Google for search traffic but still not released a Facebook Search. He can build a many new sections with new features (with ad) but still not. Well, he can experience with new brand pages (bild a new guidline and start migrate website inside Facebook and host it) or choose a absolutley new way of monetization (they are obvious) but this all still do not. I think, Zuck must hire a new CEO and calm down, then stocks can grow up to $160-$220 and more.
[+] [-] rondon1|14 years ago|reply
[+] [-] usaar333|14 years ago|reply
[+] [-] TomGullen|14 years ago|reply
A pretty spectacular rate of value loss
[+] [-] borism|14 years ago|reply
[+] [-] nlz1|14 years ago|reply
[+] [-] denzil_correa|14 years ago|reply
[1] http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...
[+] [-] unreal37|14 years ago|reply
[+] [-] TomGullen|14 years ago|reply
The WSJ reported the options market has just opened for FB stocks. A lot of people seem to be very bearish about FB so a lot of short action could significantly impact the demand of FB stock.
I'm an amateur at this though, and would love someone to correct me if I'm completely off here :)
[+] [-] gamble|14 years ago|reply
[+] [-] LargeWu|14 years ago|reply
[+] [-] kirpekar|14 years ago|reply
[+] [-] planetguy|14 years ago|reply
[+] [-] nicholassmith|14 years ago|reply
[+] [-] offshoreguy1|14 years ago|reply
[+] [-] ddet|14 years ago|reply
[+] [-] fijal|14 years ago|reply
[+] [-] benjaminwootton|14 years ago|reply
I wonder how much of the current froth is based on people trying to be the next Facebook or Instagram?
If Facebook takes off and justifies their early valuation, the startup/angel/incubator/VC world would go into the stratopshere.
If it continues to languish, people are going to be much more skeptical in making investments and even starting web based businesses.
A lot hinges on this stock price for the rest of us....
[+] [-] pbreit|14 years ago|reply
[+] [-] MisterBastahrd|14 years ago|reply
There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebook and Google when it comes to figuring out what ads people want to see.
Let's say I'm on Facebook and I ask my friends for advice on which is the best lead pencil to purchase. They might tell me a few recommendations, and Facebook may even start producing ads based upon that conversation should I choose to revisit it.
But then I want to actually PURCHASE the lead pencil. Where am I going to go to look for that? Google. It will give me price recommendations, and once I've done the search, Google will continue to follow me around with ads tailored to my search.
[+] [-] bradgessler|14 years ago|reply
If FB valuations keep slipping, it will put downward pressure on all social startup valuations, which means those companies have less money to throw around.
This is great new for non-social startups. It could mean everything from cheaper rent for office space in SF to a larger pool of available talent to recruit from.
[+] [-] electic|14 years ago|reply
I predict that Facebook is going to have a hard time hiring good talent now. This is one of the downsides of filling up your stock with a lot of hot air. It's all short term gain.
[+] [-] josscrowcroft|14 years ago|reply
[+] [-] greg7mdp|14 years ago|reply
[+] [-] agumonkey|14 years ago|reply
[+] [-] akuchlous|14 years ago|reply
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