Facebook IPO.....will it be another eircom

Doom

I can't see how it can be valued at over £100 billion ( £38 per share) and expect to rise so you make a profit , will the share price eventually nose dive and everybody get burnt?
I hope my pension does not get invested here!

smash

Doom wrote: »

will the share price eventually nose dive and everybody get burnt?

Without a doubt.

Born to Die

No it will grow forever like house prices.

squod

Soon Facebook will the whole world

Blackjack

smash wrote: »

Without a doubt.

I wouldn't be that sure.

Not everyone will get burnt, but its almost a certainty that a whole load of people will.

100billion is a crazy valuation.

grindle

It's current valuation should be around the £15-20billion mark, given their profits and projections so yeah, I'd expect a lot of people to get burnt.
On the other hand, 900 million pairs of eyes carries a lot of weight with advertisers.
Hard to guess who they might partner with in the future that might be the golden ticket.
Either way, many, many multi-millionaires and billionaires getting made on Friday, and fair fücks to them.

aaronjumper

squod wrote: »

Soon Facebook will the whole world

I accidentally the whole thing.

forfuxsake

no, the share price will only rise. nothing will ever take its place.






but nobody really posts anything anymore.

drunkmonkey

My money is on 繁體中文版.com

Capt'n Midnight

http://www.bbc.com/news/technology-18029771

Surveys suggest Bing has about a 15% share of the US search market, lagging behind Google's 66% portion.
...

"Facebook could capture around 22% of the global search market by simply launching its own search engine tomorrow," suggested the London-based digital marketing agency Greenlight which has carried out a study into the matter.

"It wouldn't need to be a spectacular engine either, just well integrated into the Facebook experience."

That alone could be worth something like $66Bn if you value Google at $199Bn


The trick is how to make a profit without spaming people with so may ads they go elsewhere.

Look at the small fish
http://branchout.com/ has 25 million members
Linkedin could do worse than try and buy them out before Facebook does


In places like Kenya more people have facebook profiles than have email

grindle

Capt'n Midnight wrote: »

In places like Kenya more people have facebook profiles than have email

More people have HIV than have FB profiles (bigger fish to fry).

Though I get what you're saying on a use-level, how can you set up an FB without email?
Can you do it just via linking to mobiles now?

Cork24

Google + shares are starting to rise

Recessionbust

Would be interesting to know how many people have deregistered and if its on the climb or decrease.
All well and good to "attract" users but keeping them is the key to success.
To many changes pushing people away and I think Facebook will fall in the next 5years which will be their own fault.
To improve user experience you need to ask what the user wants so yes I think it will be another Eircom

Run_to_da_hills

squod wrote: »

Soon Facebook will the whole world

You wouldn't be too far off.

To put it another way,

They would have a good idea about everyone in the world that uses facebook.

Capt'n Midnight

grindle wrote: »

More people have HIV than have FB profiles (bigger fish to fry).

Though I get what you're saying on a use-level, how can you set up an FB without email?
Can you do it just via linking to mobiles now?

Places like Kenya are passing us out in adopting new technology

a lot of the time we get new tech /offers it's market testing before they launch in the UK

They don't use copper for comms - no eircom dinosaur to hold them back
fixed wireless, fibre or mobile phone for broadband
more people use mpesa on mobile phone to transfer money and pay for stuff than use banks. Concern gave aid to 300,000 people recently doing that, completely bypass food distribution problems, none of this photogenic flying in food. (a Hercules freighter can only carry one truck load of food, and to do this the cost of fuel used is probably the same price as a local truck)


If you look at how Chinese consumers have come out of nowhere to take a big % of world trade, similar thing may happen in Africa and Facebook have the food well and truly in the door. And lots of them speak English and the timezone is closer than India


Not a guarantee that it will happen , just to identify future markets/products.

bnt

A bit of stock market info that's good to know is called the Price / Earnings (PE) ratio. You get it by dividing the share price by the earnings (per share of stock out there). A value of 15 is typical, less than 10 is a general indicator that a stock might be good value and worth a further investigation.

The PE ratio of Facebook, based on the expected IPO price of $34-38, is about 80 based on 2011 earnings, but projected future earnings make it 60 for this year and 40 after 2013 (source). That's still too high: the IPO price isn't supported by real earnings, current or projected.

So why the hype? Because that's how some people make money off of other people, regardless of the fundamentals of the business itself. Investors want to get in early, make a profit, and not be left without a chair when the music stops. The small investors are the ones who are at risk, since the big dogs will be in there first.

WolfgangWeisen

A few who get in early and out at the right time will make a good chunk of money.

Then there'll be the eejits at the end who just "had" to have that 2 bed apartment in a Dublin commuter town for €500,000 facebook shares since everyone was making money and sure they're only going up(!) and who'll be left holding the ball when the whole thing inevitably falls apart. Then they'll blame everyone else for their bad money management.

Capt'n Midnight

bnt wrote: »

A bit of stock market info that's good to know is called the Price / Earnings (PE) ratio. You get it by dividing the share price by the earnings (per share of stock out there). A value of 15 is typical, less than 10 is a general indicator that a stock might be good value and worth a further investigation.

Please comment on interest rates.

If interest rates are very low then even high PE look attractive.

Gurgle

WolfgangWeisen wrote: »

A few who get in early and out at the right time will make a good chunk of money.

Very very few.

Google started as a search engine, and as soon as money started to come in the branched out into everything, and almost* every product they've thrown at the market has been game changing.
(Obvious exception: Google+)

Facebook is a one trick pony, can't even compare to Google. Their trick was great when it was new but its aging rapidly. For the last couple of years they can't think of anything to do with their development staff except mess around with the UI. There's just nobody at the top with the vision to move onto something new.

Also look at the timing of the IPO, Mr Z knows the product is as big as its going to get and its time to cash in.

Biggins

General Motors this morning has announced that they are stopping using the service for advertising (they spend around 7 Million a year).
They consider it a waste of time.
Wall Street Journal: http://online.wsj.com/article/SB10001424052702304192704577406394017764460.html

General Motors Co. GM plans to stop advertising with Facebook Inc. after deciding that paid ads on the site have little impact on consumers' car purchases, according to a GM official.

The move by GM, one of the largest advertisers in the U.S., puts a spotlight on an issue that many marketers have been raising: whether ads on Facebook help them sell more products. On Friday, Facebook is expected to sell shares in an initial public offering that could put a market value on the company of as much as 80.98€ billion.

Executives have spent the last two weeks trying to convince investors that its advertising business makes it worthy of a sky-high valuation.

I would be very weary myself in investing.
After initial hype and high-hopes, a year from now, Facebook will have to show serious profitability to be able to give its investors a start of an eventual return.
This won't be easy.

SEPT 23 1989

General Motors are pulling their $10 million Facebook advertising account

Tick tock tick tock:D

galwayjohn89

I'd say facebook will be start to die out soon enough.

I've already stopped using it properly only use it for groups but Google+ do it so much better imo. A lot of my friends have cut down on their usage as well.

Seachmall

If it manages to last any decent amount of time it'll simply start turning into a giant obituary with 500,000,000 profiles of dead people.

Might as well get out now.

viclemronny

Capt'n Midnight wrote: »

http://www.bbc.com/news/technology-18029771

That alone could be worth something like $66Bn if you value Google at $199Bn


The trick is how to make a profit without spaming people with so may ads they go elsewhere.

Look at the small fish
http://branchout.com/ has 25 million members
Linkedin could do worse than try and buy them out before Facebook does


In places like Kenya more people have facebook profiles than have email

How did they sign up for facebook then?

moycullen14

I've conducted vast and expensive research on facebook - I asked my teenage kids about it. They and their mates are using it less than they were a year ago. The major usage is for events - parties, gatherings, etc. They are using twitter more - they only started in the last few months - it's more expressive.

I know it's a small sample space but if you had followed their purchases/usages (ages 22-14) over the last 10 years, you'd have been well ahead of the tech curve.

I would be very concerned about facebook.

DB21

SEPT 23 1989 wrote: »

General Motors are pulling their $10 million Facebook advertising account

Tick tock tick tock:D

Oh no, that's it then. No other company will gladly snap up ad space that will be seen by 500 million people...


Comparing FB to Eircom is like comparing a man with a propeller plane to American Airlines. It's ridiculous. Eircom wouldn't even be in the same library, never mind the same page as Facebook. It's a massive opportunity if people are smart about when they invest and when they sell. Eircom was a novelty toy for the big boys with money.

smash

Capt'n Midnight wrote: »

The trick is how to make a profit without spaming people with so may ads they go elsewhere.

Look at the small fish
http://branchout.com/ has 25 million members

2 things:

• I would in no way want my facebook account associated with any professional network
• I have received branchout requests from facebook friends, who never set up a branchout account.

So what was that about spamming?

Felexicon

Vuzuggu wrote: »

I'd say facebook will be start to die out soon enough.

I've already stopped using it properly only use it for groups but Google+ do it so much better imo. A lot of my friends have cut down on their usage as well.

Thanks man. I was going to invest in this but if you and your friends have stopped using it properly I don't see the point really

Felexicon

OSI wrote: »

GM spend $50 Million a year on advertising on Facebook. Only $10 Million of that was for actual paid advertising with Facebook, the rest was spent on generating content that was used on the free pages that companies generate on Facebook. GM have effectively said that they would rather spend 4x's the money on generating content for the free portion of Facebook than spend any more money on paying Facebook to advertise for them. That's a pretty damning indictment that will make any major corporation think twice when advertising on Facebook in the future.

Maybe for similar companies it will but on the whole I just don't think this rings true. Any company advertising a product that can be purchased online is bound to see extra traffic from advertising on Facebook. I know I'd never bother clicking a link for a car but if it's tee shirts or books I'd certainly be temted to have a browse.

dpe

A lot of analysts are suggesting its massively overvalued; 10 times earnings would be considered reasonable for a "tech" stock, FB is valued at 25 times.

Problem with Facebook is that the more they try to monetise it, the worse the user experience gets. At the moment they're relying on the fact that loads of advertisers redirected their online above the line (e.g. banner ad) spend into Facebook over the last couple of years, because they were following the eyeballs, and they've now realised that FB ads are no more responsive than banners were, and actually worse at brand building, and as a corporate you can do loads of stuff on FB essentially for free anyway, but what happens to the user is that their newsfeed stops being about their friends and fills up with corporate spam instead. The more things you "like", the more noise in the feed, the less useful it gets.

The targeted advertising algorithm they use is as dumb as rocks as well. I constantly get ads for things like scuba diving and exotic travel which reflects my life 4-5 years ago, but not now (two kids under 2). Facebook can't seem to handle that at all.

So overall, no, I wouldn't go near this IPO.

smash

I read a good article about the FB purchase of instagram and how it stinks of desperation. I'll have to dig it up.

Biggins

dpe wrote: »

A lot of analysts are suggesting its massively overvalued; 10 times earnings would be considered reasonable for a "tech" stock, FB is valued at 25 times.

Problem with Facebook is that the more they try to monetise it, the worse the user experience gets. At the moment they're relying on the fact that loads of advertisers redirected their online above the line (e.g. banner ad) spend into Facebook over the last couple of years, because they were following the eyeballs, and they've now realised that FB ads are no more responsive than banners were, and actually worse at brand building, and as a corporate you can do loads of stuff on FB essentially for free anyway, but what happens to the user is that their newsfeed stops being about their friends and fills up with corporate spam instead. The more things you "like", the more noise in the feed, the less useful it gets.

The targeted advertising algorithm they use is as dumb as rocks as well. I constantly get ads for things like scuba diving and exotic travel which reflects my life 4-5 years ago, but not now (two kids under 2). Facebook can't seem to handle that at all.

So overall, no, I wouldn't go near this IPO.

Very well said and broken down.

seamus

To put it in the most simplistic terms I can, I wouldn't go near facebook because I can't see myself still using it in twenty years time. Its popularity will dwindle and fade as other services plug the gaps and do things better than facebook does them.

There are a lot of comparisons with "Google is still huge", but they're not the same.

I can still see myself using google in twenty years time unless someone develops a better search engine. Google effectively provides a road network for the internet. Facebook is just a big skyscraper on that network.

I wouldn't go near this IPO unless I had a few grand to burn and I was willing to take a punt on getting in early and then selling on for a small profit in a couple of months.

But my gut tells me that the IPO is the point where facebook shares will be the most valuable they are ever going to be.

smash

dpe wrote: »

The more things you "like", the more noise in the feed, the less useful it gets.

It is quite difficult to infiltrate a filter bubble organically on facebook. There are a lot of companies out there trying to do it and they charge a fortune for their services. Their API's don't work and the main reason is that people go to facebook for a social experience, not to buy or search for products. Twitter thank god haven't jumped on the facebook way of thinking.

Sergeant

I'd be very wary of investing in a company that considered it good practise to spend over $1 billion on a camera app used by hipsters to take ironic polaroid-style photographs.

superluck

StockTradingMaster has a good response to why it's bad investment.

https://www.youtube.com/watch?v=sej8vVg5iq8

Felexicon

OSI wrote: »

OK, let's put it this way. Why would you spend money advertising on Facebook, when you get better results for cheaper from Google Ad Words?

OK well if thats the case why would people use Google Ad words when they can create a facebook page for free and have no advertising fee.
Ads on Facebook are viewed by a wider spectrum of society

Seachmall

Felexicon wrote: »

OK well if thats the case why would people use Google Ad words when they can create a facebook page for free and have no advertising fee.
Ads on Facebook are viewed by a wider spectrum of society

Ads on Google are directed straight at your target market, regardless of how niche that target market may be.

Nothingbetter2d

as i have adblock plugin for firefox and chrome i NEVER see any of facebook's ads.

adblock users is growing in numbers too.

smash

Felexicon wrote: »

OK well if thats the case why would people use Google Ad words when they can create a facebook page for free and have no advertising fee.
Ads on Facebook are viewed by a wider spectrum of society

You pay for ads on Facebook, you don't pay for a Facebook business page. But Google's targeting is more accurate and is linked to searches. Facebook's targeting is linked to hobbies and activities.

Stiffler2

I hate facebook and I hate Bono
Let's hope facebooks share price falls 100% as will Bono as he owns half of it ( may not be accurate )

dpe

Felexicon wrote: »

OK well if thats the case why would people use Google Ad words when they can create a facebook page for free and have no advertising fee.
Ads on Facebook are viewed by a wider spectrum of society

You can create the nicest Facebook page in the world, but it doesn't mean anyone visits it. You now have the situation where brands routinely spend advertising money to tell people they have a Facebook page (some advertisers don't even bother including their own URLs in ads in favour of FB), which is nice for FB, and it does have the advantage that you can more easily gather user-data on FB than you can on your own site, and its cheaper to "engage" with potential customers than building your own forums/chat etc; but if you're less interested in "engagement" and more interested in say, money, you'll spend money on PPC ads on Google. You'd have to be insane to invest all your marketing eggs in one Facebook-shaped basket, but you could spend all your money on PPC and nothing else and get results (I wouldn't recommend it, but you could).

This isn't a Google-love-in btw, I'd rather there was real competition for effective advertising as Google have far too much power, but unfortunately PPC on Google works more effectively (if you do it right) than pretty much anything else

titan18

Advertising isn't how Facebook will make money, it helps but it's not their target. It's the data they have collected that's driving their valuations, and if they can find an effective way to monetize that properly, their profits will go through the roof.

Also, depending on the company, Facebook acts as a great distribution channel. Look at Zynga now, which is mostly as a result of the platform Facebook provided for them.

No company can survive on advertising, it's why Google have branched out instead of relying on AdSense, and if Facebook can find a way to make money without it, it becomes a much harder thing to kill

Felexicon

OSI wrote: »

Ads on Facebook are not viewed by a wider spectrum.

Well at least you validated your point with facts :rolleyes:

Seachmall

Felexicon wrote: »

Well at least you validated your point with facts :rolleyes:

Google has twice the number of unique hits every month than Facebook has total users.

Felexicon

Seachmall wrote: »

Google has twice the number of unique hits every month than Facebook has total users.

Cool. Didn't know that.
I still think a wider section of people would take note of ads on facebook. Just my opinion. Not saying you're wrong

smash

Felexicon wrote: »

I still think a wider section of people would take note of ads on facebook. Just my opinion. Not saying you're wrong

If you go to google to search for a hotel and there's sponsored ads for a hotel booking site they will get more clicks and noticed more than an ad on someone's FB page which is there just because they go on holidays once a year.

Nailz

Information leads to knowledge, power and money. And Facebook has lots of it, they won't fall without a fight. Too many organisations find Facebook to be more useful than any other media, Microsoft didn't invest $240 million for a measly 1.6% for nothing.

Capt'n Midnight

seamus wrote: »

I can still see myself using google in twenty years time unless someone develops a better search engine. Google effectively provides a road network for the internet. Facebook is just a big skyscraper on that network.

I wouldn't go near this IPO unless I had a few grand to burn and I was willing to take a punt on getting in early and then selling on for a small profit in a couple of months.

As someone who started with Gopher and then used Altavista and still misses the keyword 'near' I'd move if a better engine comes along.

Anyone remember geocities ?

Eircom was good for a quick splash and dash too, facebook may be too, but like I said unless they find a way to commercialise it without spam it will grow in size because of the network effect but may not grow in profitability.


http://www.cio.co.ke/news/top-stories/Digital-life,-Kenya-findings

In contrast to Global internet use, Social Media is far more relevant then e-mail in Kenya. According to the findings, 36 % of Kenyans use Social Media, as compared to the 17 % that use e-mailing. 56 % of Kenyans visit Facebook on a daily basis, 21 percent use Google, 7 % are on twitter as well as on YouTube.

RobbieTheRobber

Nailz wrote: »

Information leads to knowledge, power and money. And Facebook has lots of it, they won't fall without a fight. Too many organisations find Facebook to be more useful than any other media, Microsoft didn't invest $240 million for a measly 1.6% for nothing.

How much did microsoft spend developing and promoting the zune?

Meesared

RobbieTheRobber wrote: »

How much did microsoft spend developing and promoting the zune?

Not that much actually, considering it was never launched outside the US and Canada (the hardware anyway)