5 ms·

"that would be 100x revenue" They are already expected to make well over 1B this year. Why would that be the same a few years from now?

• jonknee 16y ago
  From what I read last year's revenue was ~$800M and this year is looking like $1.2B. I hit it right in the middle. Regardless, this is revenue and revenue gets you shit on Wall Street. No one knows what their profit is, but even if it's in the $250M range (which I think is about 5x high), it still has to increase ~10x to get into the territory that a $100B valuation would need. They're also quickly running out of people with money to register, so I doubt we'll continue to see such huge growth. Not saying they won't make a great business out of it, but tantalizing would be hires with a $100B valuation seems pretty shady to me.
  • rokhayakebe 16y ago
    Rumor has it, it's more like 2B.
    • jonknee 16y ago
      Sweet, so they only have to raise that 50x before it's not a ludicrous statement. All they need to do now is get 25 billion people with as much money as the current 500m do signed up and they are good to go.
      • deleted 16y ago
        [deleted]
      • NZ_Matt 16y ago
        No, you are assuming that Facebook have already reached their maximum revenue per user. Facebook's revenue potential is massive and is only going to go up.
        • jrockway 16y ago
          Indeed. Advertising is the easy way to make money, but I see a lot more creative ways to sell their social graph. One would be to sell it to credit-rating agencies and insurance companies. If all your friends have totaled their cars and defaulted on their loans, then you aren't going to get one either. The only problem with this is that it's extremely evil (because even non-users of Facebook can be fucked by this, thanks to the "steal all of your email addresses" import method), and that there aren't very many banks and insurance companies. Another model I see is using the photo service and the photo graph to help the police solve cold cases. Match the artist's sketch to the Facebook photo database, find some matches, and talk to their friends. Also very scary and evil, but potentially profitable. "Won't someone please think of the children?" Anyway, once Facebook feels like they have a fairly complete graph and don't need any more users, then the money making can really begin.
          • chopsueyar 16y ago
            Any more unlawful ideas for Facebook revenue?
            • jrockway 16y ago
              Yeah. Using the Facebook graph to price health insurance. Has your girlfriend slept with someone who slept with someone who slept with someone who has AIDS? That will be $100,000 per month kthx.
      • zuckerborg 16y ago
        Yes, because they need $100 billion in revenue to be a $100 billion cap company.
        • jonknee 16y ago
          Depending on their profit margin, yes they do. Revenue is worthless. They aren't making much money now and will have to make tons to be worth $100B. They're not a huge number of people with money left to register, so it's up to making more with what they have now. We'll see I guess.
• ams6110 16y ago
  s/Facebook/MySpace/ and ask again
  • klochner 16y ago
    s/Facebook/AOL/ may be more appropriate. MySpace just blew it. AOL was a safe walled garden for people who didn't know what the internet was. As the internet outside AOL increased in value, people had less use for their walled garden. The same thing could happen to facebook if the rest of the internet gets more inherently social. s/Facebook Fan page/AOL Keyword/ s/Facebook email/AOL email/ s/Facebook Games/AOL Games/
  • tafle 16y ago
    The point is that, in a scenario where their market cap reached 100B, we would not expect their revenue to remain stagnant between now and then.
    • mikeryan 16y ago
      At a point where their market cap reached 100B we'd expect their profits to be between 2-3B a year. (P/E between 33-50) Considering that's 2-3x their current revenues can you understand the skepticism?
  • andreyf 16y ago
    The people running Facebook clearly know their ass from their face a little better than those running MySpace.
    • netcan 16y ago
      The point is that startups can go either way. Facebook's doing well now, but it would not be shocking if fewer people used it in 5 years.
      • fleitz 16y ago
        And Google couldn't fail spectacularly in the same period?