09-Nov-2010 22:59
Is Zuckerberg's Facebook actually worth money?
With the only income seemingly from 'click through' ads will Facebook's business model continue to work or will it bomb?
At the moment, Facebook's worth may simply be what people will pay for (some would argue) an overhyped product.
If enough 'investors' (pension funds, banks and possibly venture capitalists) believe that there is sufficient advertising revenue available or if the assets (i.e. all of 'our' information) owned by Facebook can be monetised to yield a return, there will be a ramped up price.
If (or should we say 'when') it transpires that Facebook cannot actually generate enough advertising money or create value from their information, someone, somewhere is going to lose a packet…
There's little doubt that Zuckerberg himself will eventually walk away with his pockets lined with gold but will investors make any money?
What are your thoughts?
Er, yes - shedloads to the current shareholders.
The jury is out on new investors.
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Norman, see below.
Not that I have clicked on a FB ad myself, or even seen one that is remotely relevant but they seem to be making money.
Facebook serves '23% of all US display ads
Facebook now serves up more display ads than any other outfit on the US web, according to the latest numbers from market-research outfit comScore.
In the third quarter, comScore says, the social network topped all other publishers with over 297 billion display-ad impressions, which translates to 23.1 per cent of the market. Its closest competitor was Yahoo!, with 11 per cent. Google — with 2.7 per cent — sat below not only Facebook and Yahoo!, but also Microsoft and Fox.
At Google, text ads are still king.
...
But Google now sits above AOL. Earlier this month, during AOL's third-quarter earnings call, AOL boss and ex-Google man Tim Armstrong said that Mountain View and Facebook were "taking share in display advertising," and apparently, he was right.
But it seems Facebook is taking much more. Facebook's market share has increased 13.9 percentage points since the third quarter last year, according to comScore. The display ads tracked by the research outfit include "static and rich media" ads, but not video ads, house ads, or ads that total less than 2,500 pixels in area:
See also 'One-trick pony' Zuckerberg yet to prove CEO worth
I guess with a trick that size, one trick is enough.
Regards,
Mark
Any organisation which holds half a billion sets of contact details, along with a wealth of demographic and behavioural information, is worth a huge sum, regardless of the ad revenue.
I'm sure that many people will start to pay for premium features as and when they are introduced, too. It's already way more than a place to keep in touch with friends from your student days.
Looks a good investment to me.
Best wishes
Alan
Alan Stevens, President, Global Speakers Federation, 2010-2011
Communication, PR and Reputation Management
Author of Ping! Presenter of Media Coach Radio Show
However, will they make money for the lemmings that will surely pile in to follow the trend?
& even if they become a 'bank' or finally find a way to utilise the wealth of data & customer information they undoubtedly possess, can they actually turn a profit?
For me, the 'jury remains out' on this one...
Norman,
Maybe the money will not be in advertising, if Facebook becomes a bank that will generate revenue.
If it becomes a market place like Ebay it will generate revenue.
I think the investors will make a fortune, they are not fools, with a customer base that Facebook has globally it is just a matter of time before they start a project which will be a mainstream of revenue for Facebook and Zuckerberg.
I am sure he has been in discussions with a number of people about a number of ventures.
He is in no rush, Facebook will not be getting smaller, it will only become bigger and bigger.
Steve
My point remains - can outside & fresh investors possibly make money?
There's no doubt that Facebook is a colossus & a behemoth of a company, but will it offer a return to any other than initial investors?
Hmmmm.....