I remember how excited average investors were at the prospect of a new way of going public when Google announced its innovative auction IPO. "Finally, Wall Street banks wouldn't be able to crowd to the front of the line!" Their public auction, their "don't be evil", and their continued use of their power for good -- like their trick to get openness principles adopted during the wireless spectrum auction -- all exemplified a company thinking and acting like a good corporate citizen at all levels.<p>Contrast this to FB. They are actually cozying up to Wall Street rather than eschewing them. "Don't be evil" was replaced with a series of privacy gaffes, a flurry of lawsuits surrounding the company's founding, and a CEO who has called early users dumb fucks. It's sad to see how Google's pioneering isn't being emulated by the next big tech company.
<i>"And don't give me that crap about VCs being "early stage" and wanting to cash out of a "mature" investment. These people are as money hungry as any other institutional investor, and would let it ride unless….they saw something that suggested that the era of stupendous growth was over."</i><p>The author doesn't seem to understand how the venture asset class works.<p>Venture funds are owned by their limited partners (LPs), and typically have a fixed, 10-year life. After 10 years, the fund liquidates and the LPs (hopefully) get a nice return on their investment.<p>It's been 6.5 years since Facebook's first venture investments. If the investment vehicle was already 2-3 years old at that time, then they <i>have</i> to liquidate soon, even if the managing partners believe Facebook will continue to appreciate in value.<p>The author seems to think that anytime an investor wants to cash out, it's because they don't "believe" in the investment.
<i>The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week.</i><p>It's a fair point: if you had $50 billion lying around the place, which of the two would <i>you</i> choose to invest in?
The only people what can make money on Facebook stock, is Chinese government officials. All they need to do, is to accumulate $FCBK stock and then allow Facebook.com to be used in China. Number of Facebook users will jump from 0.5B to 1.5B, same with the valuation from $50B to $150B ;)
"It's hard to see why, though: DST got in at a $10 billion valuation in May 2009. Facebook's user base has more than doubled since then. So its valuation should…quintuple?"<p>Good point, according to Metcalfe's Law [1], it should actually only have quadrupled.<p>[1] <a href="http://en.wikipedia.org/wiki/Metcalfes_law" rel="nofollow">http://en.wikipedia.org/wiki/Metcalfes_law</a>
One reason why I'm not buying Facebook:<p>I don't have $2mil lying around.<p>Another one;<p>Why is Mark so reticent to IPO? Because he loses control? Or because that means making the numbers public, and people will see just where the money is going. Either way, if the CEO doesn't want to go public and may be forced to, that is not good.
I do not have a FB account. You do not need FB to simply take benefit of the web at large. But you do need a good search engine.<p>For me, FB is the future Second Life. Making money now and hyped, but at the end, it will just be a simple good business, but not a stratospheric one.
"And any advertiser who is trying to target me on the social network is wasting their money."<p>He ruined a perfectly objective point with this subjective generalization.<p>That being said, I'm with him for on most points, and I agree on the bigger picture.
I was an early adopter of Facebook back in the day it was only open to a handful of school (VERY early 2004). It was nice and exciting and whatnot. But I've lost interest in it <i>completely</i>. I speculate that it's only newcomers that find it interesting. I now use FB only as a means of sending someone a quick note, getting invitations to events (a la evite -- remember that?), or maybe looking up a picture I was tagged in by a friend. If back in the day people put in their hobbies, activities, interests, and list of classes (yup, that was available. Great stalking tool...!), I find people's profiles completely empty.
Anybody with a different experience? Do you ACTUALLY use FB, or are you only drawn to it because of the reasons I outlined above?
Please note that I'm not hating on FB. They do what they do well. Just sharing my experience (and at this point, I will never ever be able to get a job at FB... ;-) ).
"The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week."<p>GS was founded in 1869; Facebook in 2004.
Reason #3 shows that the author does not understand even the basics of virtual goods and facebook platform monetization. The other points are nearly as non-sensical.
"Reason 2 : Goldman has likely earned the lead book runner slot in any initial public offering."<p>When Microsoft valued Facebook at 15 billion, it was the same thing : they paid 240 million for 1.6% of the company AND running ads on Facebook (while excluding Google) AND some other things we may not know.<p>But people just said 1.6% for 240 million = 15 billion without taking other parts of the deal into account.
Facebook is very similar to vmware. I expect it would follow a similar path in stock price. Currently vmware is trading at 140 p/e ratio. People are afraid to miss the next Google, Microsoft, etc.. SO they are willing to buy the latest trend. If facebook made $2 a year off 300M users they would have a market cap of 60B with a 100 P/E ratio.
> Let's just say for argument's sake that it is early stage investors who are selling. Why would they sell? Because they're in need of cash to invest somewhere else? The way the social network is talked about these days, it's the best investment opportunity in town. So why would anyone want to forsake it?<p>What a silly argument.<p>Diversification. Duh.<p>Even if you've got a hold of what you're certain is the biggest, bestest, most badass-est investment ever that's already gone up 20x, you'd do well to cash out a bit of it and spread that around. On the off chance something crazy happens, you're not up the creek.<p>I mean, that's not exactly revolutionary right? Diversify? If I owned Facebook equity now, I'd really happily cash some of it in and invest in something as uncorrelated to FB as I possibly could. Like, real estate in Bulgaria or something.
On Zynga: <i>You think they're going to justify a $50 billion market capitalization through banner ads?</i><p>These games actually do really well, not from banner ads but from virtual currency. Now that FB is pushing devs to use FB credits, they should be in for a healthy cut of the action.
If these guys precipitate a bubble burst we should all hate them.<p>2011 is the year Facebook growth (users, hours, page views, pick one) plateaus, it is inevitable it will happen as some point, and this is very likely the year.
Nobody has mentioned acquisition. I think it is safe to say that MSFT would be interested in FB at 50B. 100B starts to look like real money and it is hard to know who would be interested...
1. because this article is on CNN and our formula for getting visitors is to find a popular current event and take a controversial or contrary point of view on it.<p>2-5. see #1