Facebook IPO

jkimcpa said:   AOL was a drop in the bucket compared to ICQ, IRC, newsgroups
In 2006, AIM was over 50% of the IM market. That would make it a very big drop. Text

In 2011, AIM held 0.73% of the IM market. Text

jkimcpa said:   
Side note: why won't people and businesses switch away from Microsoft Office? Open Office does the exact same thing and it's free, yet we pay hundreds of dollars on Microsoft.

Very, very few organizations or people pay more than a $100 or so dollars for Office. I can get MS Office Enterprise through my company good for three installs for $19.95. I doubt MS is giving me a better deal than the company so I can only assume they are paying something similar. At that point the costs of converting an organization to OpenOffice/Libre Office would likely cost more than the ongoing cost of MS Office. I mostly use Libre Office at home (I have one install of MS office because of the deal through my company just for dealing with documents I get from others as OpenOffice/Libre Office suck at dealing with even moderately complex MS Office document in my experience).

secstate said:   jkimcpa said:   
Side note: why won't people and businesses switch away from Microsoft Office? Open Office does the exact same thing and it's free, yet we pay hundreds of dollars on Microsoft.

Very, very few organizations or people pay more than a $100 or so dollars for Office. I can get MS Office Enterprise through my company good for three installs for $19.95. I doubt MS is giving me a better deal than the company so I can only assume they are paying something similar. At that point the costs of converting an organization to OpenOffice/Libre Office would likely cost more than the ongoing cost of MS Office. I mostly use Libre Office at home (I have one install of MS office because of the deal through my company just for dealing with documents I get from others as OpenOffice/Libre Office suck at dealing with even moderately complex MS Office document in my experience).The pricing you are listing is close to monthly pricing for different versions of open licensing programs via software assurance or SPLA. It is not the "pay $20 and install on 3 computers"

EvilCapitalist said:   jkimcpa said:   I would hardly call FB messaging a failure...in fact I could even see them dominating messaging in the future. Gen X/Yers and prior use AIM/Yahoo/GT, but my 14 year old cousin has no need to use anything other than as all her friends use FB (along with 1 out of 6 humans on Earth). No need for signing up for email either.FB chat/mail is a failure - it does not allow one to easily communicate with those that engage in making money. Rather, it is there to prevent FB users from sending messages on the other platforms.

This emperor is naked. The truth is that FB traffic does not convert. Sure, you get traffic from FB advertisements... the problem is that it is the traffic that costs you money and does not convert into the sale. So it is the traffic that you, as a business, do not want. Eventually, businesses will figure it out.It's not yet a fail because they haven't even attempted to launch a product that attempts to monetize. They probably have many product people working on "what could be" and they are just holding back on launching anything so they get it right the first time.

Saying "FB traffic does not convert" is pretty bold (and broad). Are you referring to their CPC product? What are you referring to? I would hardly call $3b-4b in revenues not converting.

Unlike Groupon and many other sites, FB's traffic does not cost money. It's all organic. Why would they spend money on SEM to acquire users?

jkimcpa said:   EvilCapitalist said:   jkimcpa said:   I would hardly call FB messaging a failure...in fact I could even see them dominating messaging in the future. Gen X/Yers and prior use AIM/Yahoo/GT, but my 14 year old cousin has no need to use anything other than as all her friends use FB (along with 1 out of 6 humans on Earth). No need for signing up for email either.FB chat/mail is a failure - it does not allow one to easily communicate with those that engage in making money. Rather, it is there to prevent FB users from sending messages on the other platforms.

This emperor is naked. The truth is that FB traffic does not convert. Sure, you get traffic from FB advertisements... the problem is that it is the traffic that costs you money and does not convert into the sale. So it is the traffic that you, as a business, do not want. Eventually, businesses will figure it out.It's not yet a fail because they haven't even attempted to launch a product that attempts to monetize. They probably have many product people working on "what could be" and they are just holding back on launching anything so they get it right the first time.

Saying "FB traffic does not convert" is pretty bold (and broad). Are you referring to their CPC product? What are you referring to? I would hardly call $3b-4b in revenues not converting.

Unlike Groupon and many other sites, FB's traffic does not cost money. It's all organic. Why would they spend money on SEM to acquire users?FB has only one product - it is selling clicks.

Clicking is not conversion. Clicking to the sale with FB being the starting point is conversion.

Every time someone goes to a website and does not buy a product it costs site operator money. The worst thing that site operator can do is get a pile of traffic that results in no sales.

FB is a great no-sale traffic generator.

ducky282 said:   Legitimate question: What if people start (or already are) getting jaded to ads? For example, I dont personally click any of the sidebars when doing a google search, FB ads might catch my attention for some product (then I just do a search for the cheapest if I really have to have it), and generally, the only ads I care about are the circulars on BF, otherwise, its not like Im changing my personality every other month that I need to find out what I dont already know by this point in my life (my services/products are pretty well established). Kind of like the junk snail mail I get... straight to the trash. Then FB my personal data = worthless to advertisers, no?

OTOH, it would be interesting to see what happens to non-marketable profiles... Can I buy them up at an auction in bulk?

http://getfirefox.com/

https://addons.mozilla.org/en-US/firefox/addon/trueblock-plus/

https://addons.mozilla.org/en-US/firefox/addon/ghostery/

Shitcan the garbage once and for all. They waste your time, waste your screen, and invade your privacy. Imagine a web where you don't have to see ads.

EvilCapitalist said:   jkimcpa said:   EvilCapitalist said:   jkimcpa said:   I would hardly call FB messaging a failure...in fact I could even see them dominating messaging in the future. Gen X/Yers and prior use AIM/Yahoo/GT, but my 14 year old cousin has no need to use anything other than as all her friends use FB (along with 1 out of 6 humans on Earth). No need for signing up for email either.FB chat/mail is a failure - it does not allow one to easily communicate with those that engage in making money. Rather, it is there to prevent FB users from sending messages on the other platforms.

This emperor is naked. The truth is that FB traffic does not convert. Sure, you get traffic from FB advertisements... the problem is that it is the traffic that costs you money and does not convert into the sale. So it is the traffic that you, as a business, do not want. Eventually, businesses will figure it out.It's not yet a fail because they haven't even attempted to launch a product that attempts to monetize. They probably have many product people working on "what could be" and they are just holding back on launching anything so they get it right the first time.

Saying "FB traffic does not convert" is pretty bold (and broad). Are you referring to their CPC product? What are you referring to? I would hardly call $3b-4b in revenues not converting.

Unlike Groupon and many other sites, FB's traffic does not cost money. It's all organic. Why would they spend money on SEM to acquire users?FB has only one product - it is selling clicks.

Clicking is not conversion. Clicking to the sale with FB being the starting point is conversion.

Every time someone goes to a website and does not buy a product it costs site operator money. The worst thing that site operator can do is get a pile of traffic that results in no sales.

FB is a great no-sale traffic generator.You're probably right on conversions. The CPC would be much higher if it converted at a rate like Google.

FB has more than 1 product. They also generate revenues from selling backend access to developers and revenue share from games.

As I said before, FB's policy has been to be very slow on monetization. After going public there should be some pressure to roll out more monetizing products at a faster rate.

So I wonder if the twins, who claim that the Facebook idea was stolen from them by Mark, will be buying any of these stocks?

Or did they get a certain number of shares in their settlement?

Jim Rogers: I Would Not Buy Facebook

Rogers told CNBC that the timing of an IPO this week would be a smart move by Facebook.

"It's been demonstrated many, many times before that sellers are usually smarter than the buyers, and they usually know when the best time to sell is, and Facebook is doing it," he said.

http://finance.yahoo.com/news/jim-rogers-not-buy-facebook-151010...

jkimcpa said:   You're probably right on conversions. The CPC would be much higher if it converted at a rate like Google.

FB has more than 1 product. They also generate revenues from selling backend access to developers and revenue share from games.

As I said before, FB's policy has been to be very slow on monetization. After going public there should be some pressure to roll out more monetizing products at a faster rate.No. FB has only one product. It sells clicks.

If there are no clicks that go anywhere no developer will care about it as developers won't be able to make money.

All of the other products depend 100% on the clicks that FB users generate and the clicks that FB sells to the sites. There was a study published a long long long time ago that gave FB conversion rates lower than 1% of Google conversion rate. At that time FB's cheerleader responses were "It does not matter - old metrics do not apply". In reality, the only metric that matters is the click conversion as that's the only thing that generates -sale-. Without that FB is nothing other than SecondLife. Sure, SL has its own virtual market place and real money can be used to buy virtual goods. It was thought that companies would jump on SL. And they did... for a while. Now SL is empty because the only thing that matters is sending real user to a real site where that user can spend $$ to buy some product or service.

And FB has none of it. And it won't because sale is by definition a discrete transaction. Discrete transactions are contrary to Zuck's view of the world ( which is expected from a 27 year old whose idea of being profitable is to sell shares in the company to the public and have a business model so convoluted that everyone for whatever reason wants to believe they must be too stupid and that's why they can't figure out just what is FB's unique selling position/unique selling product).

kamalktk said: jkimcpa said:   I've provided quite a number of links to support my assertion that AOL used to be as dominant in the social networking area as Facebook is today. You have provided personal anecdotes so far. If you want, please provide better support for your position than anecdote.
AOL was not social networking. I will never consider it such.
Great data you posted there... maybe that's why AOL was listed as a prototypical social network on the links I've already provided. Just because you don't like it, which you obviously don't, doesn't mean you shouldn't consider it one. Putting such a personal feeling into possible investment decision is a bad idea.

And yes, my data was actual client counts last post. I suppose you could look at that second link and add up all the clients that use the AIM network, Windows Live Messenger, nope, Skype, nope, Yahoo IM, nope, Tencent QQ, nope, etc. You could add up the AIM network clients, and you'd get up to 3, maybe 4%. That's down from over 50% of all clients, in 5 years.

I don't follow. As I understand it, Zynga makes $1b off Farmville, FB takes $200m fee. What clicks are you talking about?

EvilCapitalist said:   jkimcpa said:   I don't follow. As I understand it, Zynga makes $1b off Farmville, FB takes $200m fee. What clicks are you talking about?You are wrong.

http://developers.facebook.com/

30% rev share for games

Facebook does not do rev share on ads

jkimcpa said:   EvilCapitalist said:   jkimcpa said:   I don't follow. As I understand it, Zynga makes $1b off Farmville, FB takes $200m fee. What clicks are you talking about?You are wrong.

http://developers.facebook.com/

30% rev share for games

Facebook does not do rev share on ads

Both of the ATD posts are wrong, which is (yet another time) to be expected in posts written by people who can't make a cent about people who can barely make a cent.

The only reason why people develop FB apps is because there's a specific section of interface where the developer of the app gets to monetize the clicks. Every developer that does it for the money knows it.

hakujin said:   Does anyone have an opinion on which is the best secondary market brokerage on D-Day? Scottrade? ETrade ? Schwab? Amertrade? I realize retail investors aren't getting the 1st stab but I think there will be plenty of pie to go around.

Related to, anyone buying on SecondMarket now?

Not sure if anyone mentioned news corp and myspace. I remember news corp bought myspace for around $580 million and recently sold it for around $35 million. Just goes to show how quickly a social media site can drift out of existence when they lose their active users to something better.

I know there's so much negativity against facebook but is it so wrong for me to just buy it on the first day it comes out and sell it on the second? I know it's no good long term but there's atleast short term profit in this, no?

LNKD IPOed @ 45 and closed at 94.. I wouldn't exactly call that rough, but I also wouldn't invest now.

Are any 'retail shoppers' here actually investing Day 1 and if so: HOW? What about now... secondmarket? can those shares be resold in NASDAQ or will they be adversely affected by IPO? Anyone?!

svr411 said:   stanolshefski said:   As I posted above, I'm a little leery about Facebook's ability to grow revenue at the rate they have been, because they've already added as many ads per page as can possibly be displayed.

I think their best bet to increase revenue is to build an advertising network like Google did with AdSense, and to leverage their user data to charge an advertising premium.

Then they will grow revenue by selling data out of the network.

This is how I envision Facebook makes (or will make) a lot of money. Data is a commodity that's traded, and is worth some decent cash -- here's an example of twitter firehose data pricing: http://datasift.com/pricing#costs

How much money in aggregate? Who knows, and the user retention is a big issue with the web, as seen by everyone moving to the "next big thing" in 5-10 year time frames.

jkimcpa said:   Solandri said:   The problem with that parallel is that it's really, really hard to make a good search engine. There were many who tried back in the 1990s. Google rose to the top because it was better at solving a hard AI (artificial intelligence) problem: parse the text of and links to/from a web page and figure out how relevant it is to a search term.It's hard to make a good search engine because the internet is a cesspool with infinite amount of data. You're right, they rose to the top because their algos allowed them to have the most relevant results. One of the biggest factors in SEO is inbound links (other sites linking to you) because that means your shit is relevant. With FB's model it's as relevant as you can get. With people posting links, comments, etc., combined with your demographic data and degrees of separation, FB can eventually have so much data that it can provide you with the most relevant search result - something that a computer cannot do. If I search for X on google, you will get the same result. If (in the future) I search for X on FB, the relevant results I get will be different than you (maybe).
You're assuming being "a Facebook user" is sufficient to thwart SEO shenanigans. I don't use Facebook and I have a half dozen Facebook accounts. I used them to sign up for free stuff which invariably required I "like" them. This sort of padding the numbers via marketing is exactly the type of noise SEOs add to any objective search system. Being user-driven like Facebook does not inoculate you from this.

So literally, the only thing keeping people on Facebook is the fact that lots of other people are on Facebook. well, duh There's nothing hard about that, nothing other than momentum to prevent any of the 7 billion people on Earth from doing the same thing to Facebook that Facebook did to Myspace. I'm not willing to bet big money on that.Actually it's really really really hard. And it's why FB with valued at $100b.
It's not hard. Zuckerberg wrote the basic code for Facebook in a month working mostly alone. It's so easy it's been done numerous times before. CompuServe, AOL, GeoCities, Myspace. They did more or less the same thing, and were juggernauts in their time because of nothing more than their popularity. Will Facebook follow in their footsteps? I don't know. But the fact that their product is so easy for someone else to duplicate makes me extremely wary about betting big money on them.

I disagree. Facebook and Google's strengths are largely orthogonal. I have no idea how you're using "orthogonal" even after I looked it up in the dictionary.
Sorry, it's a popular STEM term. It means perpendicular. Things you do and changes that happen along one direction do not affect or have very little effect on things that are happening along an orthogonal direction. I can drive a hundred miles around Los Angeles during the day, but my ears do not pop from all that movement because altitude is orthogonal to horizontal displacement. But if I climb up a hill just 1/200th that distance, my ears pop.

2004 IRS tax statistics? etc. My point is people post links on FB, and as that grows, and as FB's data grows with it, they will have enough information internally to create a competitive search engine
And my point is that while what you say certainly works for popularity, there are masses of data out there (like IRS tax statistics) which aren't exactly popular, but are very important if you happen to be looking for it. Facebook search could handle the popular stuff better than Google search. Google search handles the objectively relevant stuff better than Facebook search. They are mostly orthogonal.

If there's anything that Wikipedia has taught us, it's that completely user-generated content is nearly useless.Are you joking?
Have you seen a Wikipedia page in its early stages of development, or which is in need of clean-up? Dig through the past revisions and debate over those revisions for a wiki page some time. If all that people added to Wikipedia was left in, it would be nearly useless.

As explained above, even Google's own algos consider popular perception as truth.
No, Google's algorithms consider popular perception to be partly correlated to truth. It does not use it as the end-all be-all of search ranking as you're implying a completely user-driven Facebook search would.