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FACEBOOK at $38, FB = $104 Billion. Is it overvalued?

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CRAZY NUMBERS?

 

I was surprised that Goldman invested at a $50 Billion valuation.

 

But now it seems that Goldman will offload most of those shares onto its clients through some sort of vehicle.

 

They seem to be skirting the low which restricts the number of investors.

 

Does anyone else share my feeling that someone (goldman clients) are going to wind up "burned" for pursuing this investment?

 

$50 Billion valuation ???

How much money do these guys (FB) make?

Are they profitable at all?

 

The fact that Zuckerman had a movie made about him, and he was on the cover of TIME has pumped up the valuaution,

but is that really going to help investors make money?

============

 

http://www.facebook.com/pages/Green-Energy...147840401935291

 

GEI on FB : 8 people like this (??)

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GEI on FB : 8 people like this (??)

I sacked FaceBook off about two or so years ago now.

 

On the back of this thread I signed up again as Victor_Broom instead. It's all changed since way back... There used to be 'groups' that you became a member of - looks like I have to 'like this' now. (?) Not sure but I like GEI so I gave it a thumbs up.

 

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I sacked FaceBook off about two or so years ago now.

 

On the back of this thread I signed up again as Victor_Broom instead. It's all changed since way back... There used to be 'groups' that you became a member of - looks like I have to 'like this' now. (?) Not sure but I like GEI so I gave it a thumbs up.

Thanks, Victor.

It is good to have you aboard.

But only 8 people "liking" GEI on FB, is not going to bring us a stampede from there, I think

 

Whops, it is now 10, so the growth rate is positive anyway

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Facebook worth 1,110 metric tonnes of gold?

 

I doubt it.

 

It seems gold is massively undervalued. (Or, fair enough, f-a-c-ebook massively overvalued).

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A quick comment on your observations about Facebook. I don't think you'll get much benefit from it the way you are using it, as you have set up GEI to be a profile rather than a 'fan page'.

 

I get no value from your profile page as I'm not one of your 'friends'. I don't want to be a be 'friends' with GEI as this will give you access to my Facebook private data. Not that I don't trust you of course, but the reality is I don't want to enter into this sort of 2-way reciprocal relationship just to see what GEI on Facebook is doing. Basically, this type of profile is too closed for me.

 

The alternative is to set up a 'fan page' allowing people to 'like' you. This is a more simple, more open, one-way relationship and doesn't require me to give you access to my details (incidentally, the same sort of relationship that twitter uses). This sort of arrangement will better encourage the sort of open debates GEI is known for. Once people are seen to be commenting on the various things you post, you'll gain more readers.

 

Ah, got you.

 

----------

 

My issue is that I don't particularly want anyone on t'internet to know who I am. Not that I operate my life as a closed book or am a recluse, quite the opposite. I have a LinkedIn profile which is 'me', everything else is Victor Broom. I think it is important to keep separate things separate.

 

It's early days for social networking blah blah... Where will it be in 10-20 years time? Will anybody have any regrets about the way they have played it - or been played?

 

 

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I think people here are underestimating Facebook. They have 500 million customers. They have all of their personal details including likes/dislikes/hobbies.. The people who use Facebook have a positive emotional feeling towards the website too - Its a marketing departments dream.

 

It also gets more hits than Google which has a market cap of $200m.

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Tencent? Is that how to Value Facebook ?

 

Investors are betting Facebook, which has surged fivefold in value over two years, will parlay its lead in social networking into sales of online advertising. While revenue at Palo Alto, California-based Facebook more than doubled last year to about $2 billion, the company has yet to tap the mobile-ad market, start selling ads on partner sites or take full advantage of such services as e-mail and location features.

 

Buzz, Bloom, Hype

 

Compared with Google, Facebook at $50 billion looks expensive. That valuation is about 25 times its 2010 revenue, almost triple Google’s price-to-sales ratio of 9, based on analysts’ estimates.

 

“Right now, there is a lot of buzz, there’s a lot of bloom on the rose, there’s a lot of hype,” said Robert Ackerman, founder and managing director of Palo Alto, California-based Allegis Capital. “Expectations are probably running somewhere ahead of reality.”

 

Facebook instead more closely resembles Tencent, which is valued at about 15 times revenue, according to Bloomberg data. Tencent, based in Shenzhen, also owns a stake in Facebook.

 

HK:700 / Tencent Holdings Ltd ... update

003wb.gif

 

Baidu Inc., China’s most-used search engine, trades at about 31 times revenue. Youku.com Inc., China’s largest online video site, is valued at about 90 times revenue after selling shares to the public last month.

 

BIDU Baidu Inc (NASDAQ GS) ... update

003sp.gif

 

“There are companies in Asia with high valuation multiples and somewhat similar growth and reach characteristics, but where the monetization is still largely to come,” said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida.

 

Friending Donuts

 

Some advertisers are just starting to spend money on Facebook. Dunkin’ Brands Inc.’s Dunkin’ Donuts had 1 million fans on its Facebook profile page by the end of 2009 without buying any ads, said David Tryder, director of interactive marketing at the Canton, Massachusetts-based company.

 

/more: http://www.bloomberg.com/news/2011-01-06/f...han-google.html

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How does Facebook make money?

 

However, the fact that Facebook is making any money at all might come as a surprise to some, given that many are sceptical that social networking sites have real money-making potential (and for good reason, given the history of the dotcom bubbles and here-today, gone-tomorrow social websites).

 

However, after throwing around all kinds of ideas - some good, some not so good - Zuckerberg and company now seem to have settled on a number of ways to bring in the money:

 

• Self-serve advertising allows marketers to decide precisely who they want to appeal to, and buy ads to put in front of users who fit the profile. This has already proved appealing for some big brands: right now, I can see ads from 3 Mobile and Peugeot on my Facebook homepage, for example.

 

• It's not just big advertisers, either. Almost anyone can walk up and buy space on the site if they have the cash - and that includes other Facebook users, who try to direct you to their profiles, fan pages or elsewhere in order to get you to follow their cause or buy their product.

 

• There are also the gifts and other virtual property that users can buy and give to each other. This still seems like a crazy idea to some people, but it can prove a highly profitable business in the right circumstances - virtual goods prop up all kinds of online games, and nobody ever thought ringtones could be so profitable.

 

In addition, the company is known to be working on a micropayments system (no doubt a money-spinner if they can pull it off) that will almost certainly allow it to take a slice of any transaction that takes place through the site. Whatever it is, there appears to be a business here, something even critics like Andrew Keen are now admitting.

 

Now, that's not to say that Facebook can continue unabated. Even if its products are making money today, there are few guarantees for tomorrow.

 

http://www.guardian.co.uk/technology/blog/.../facebook-money

 

Facebook revenues reached $500 million in 2009, up from $300 million in 2008, according to Fortune editor David Kirkpatrick, who cites "well-informed sources" in his upcoming book, The Facebook Effect.

 

Facebook expects revenues to reach $800 million in 2010.

 

Where did 2009's $500 million come from?

 

Self-service ads, which appear on the right side of the screen on Facebook, accounted for about $250 million to $300 million.

 

Engagement ads, which seek user-interaction (and sometimes feature user-endorsements), brought in $100 million.

 

As a part of a 2007 ad deal, Microsoft sells some ads on Facebook. It's payment for the privilege reached $50 million in 2009.

 

Finally, Facebook Gifts and other virtual goods account for between $30 million and $50 million in 2009.

 

http://www.businessinsider.com/how-does-fa...ke-money-2010-5

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How does Facebook make money?

I want to know that too. My wife uses it as far as I know, while I am very suspicious.

 

- "Steal"/sell data?

- Push specific adverts to you?

 

EDIT: A few weeks ago I bought shoes for my wife - online. Ever since I (almost) only see one web advert: from that shoe shop. FFS, I HAD my/her shoes already... , and I find it spooky too.

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How does Facebook make money?

However, the fact that Facebook is making any money at all might come as a surprise to some, given that many are sceptical that social networking sites have real money-making potential (and for good reason, given the history of the dotcom bubbles and here-today, gone-tomorrow social websites).

 

However, after throwing around all kinds of ideas - some good, some not so good - Zuckerberg and company now seem to have settled on a number of ways to bring in the money:

 

• Self-serve advertising allows marketers to decide precisely who they want to appeal to, and buy ads to put in front of users who fit the profile. This has already proved appealing for some big brands: right now, I can see ads from 3 Mobile and Peugeot on my Facebook homepage, for example.

 

• It's not just big advertisers, either. Almost anyone can walk up and buy space on the site if they have the cash

 

Guess what? GEI is a social networking site too.

And in some ways the average active member here might be of greater value to certain advertisers than teenagers with lots of time and little money, who are spending all their time on Facebook. At least people here on GEI have money, and are trying to work with it to generate more. They are not relying on handouts from their parents.

 

I think there is a big shared fantasy at work now. To me, this attention is the sign of a "social networking bubble". When serious analysts start crunching real numbers, they are going to find that FB is worth less than a going concern ... like:

 

Yahoo / YHOO ... update

002i.gif

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FACEBOOK IS A PUMP-and-DUMP

 

... this fits my view ...

 

EXCERPT

It's pretty clear that Facebook could achieve an even higher valuation through a public stock offering, but Zuckerberg and his directors know that's not how the smart game is played. Rather, the better strategy is for the hot company and its hot investors to play off each other's reputations, creating such excitement and pent-up demand for Facebook shares that when the public offering finally comes, the full value has already been captured by insiders - and the first wave of public shareholders can be played for suckers. Think of it as a sophisticated update of the old "pump-and-dump" strategy.

 

In the meantime, many of the insiders are reaping immediate benefits. The venture capitalists are leveraging their Facebook success to lure new investors. The share prices of Microsoft and the publicly traded arm of Digital Sky Technologies have shot up. And Goldman is anticipating $60 million in fees for placing its clients' money in Facebook plus a cut of 5 percent from any profit they earn - that, along with hundreds of millions of dollars it will almost certainly collect as the lead underwriter for the Facebook stock offering, whenever it finally occurs.

 

It's not just Facebook that is following this new strategy. So are Groupon and Twitter and game maker Zynga. By keeping it an insiders' game for as long as possible, the founders and the insiders will capture most of the long-term value of companies whose dominant market positions are likely to prove short-lived as new technologies come along. An IPO will probably mark the high-water mark in terms of the growth rate of these firms, although investors are almost certain to believe otherwise.

 

Securities laws are designed to protect outside investors from this kind of manipulation. Any company that takes on 500 investors is supposed to make full public disclosures about all of its activities, just like a publicly traded company. But those clever Wall Street lawyers have figured out that if dozens or even scores of rich investors pool their money and buy their shares through a special-purpose vehicle or a private-equity fund, then each group can be considered a single investor. The Securities and Exchange Commission is not so sure, but if recent rulings are any indication, the courts are likely to buy into this fiction.

 

/more: http://www.washingtonpost.com/wp-dyn/conte...d=news-col-blog

 

I have a BAD FEELING about this.

The Greed on display here is awesome, and Goldman has found a way to generate some nice fat fees from a company that is still private. Meantime, it seems they have the right to exit some or all of their own FB investment without telling their clients.

 

Is Goldman going to had out free 21-foot bargepoles to their clients along with the shares?

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Heilmann Sold Facebook Stake, Says Valuation `Too High'

 

Jan. 4 (Bloomberg) -- Thomas Heilmann, co-founder of German advertising agency Scholz & Friends AG, discusses the sale of his stake in Facebook Inc. Facebook is said to have received a $500 million investment from Goldman Sachs Group Inc. and Russia's Digital Sky Technologies that values the social-networking company at $50 billion. He talks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg) (Bloomberg)

 

http://www.washingtonpost.com/wp-dyn/conte...ST2011010405128

 

 

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Guess what? GEI is a social networking site too.

 

But have you made $500million yet?

 

Perhaps Goldman Sachs will put a valuation on the site and package it up to sell on? Of course, I want a % as commission for coming up with the idea. Let's party like its 1999.

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But have you made $500million yet?

Perhaps Goldman Sachs will put a valuation on the site and package it up to sell on? Of course, I want a % as commission for coming up with the idea. Let's party like its 1999.

Great.

Bring Goldman in at a high price, and I will pay you a handsome commission

 

BTW, I have invested in a privately owned Coal mining company, where Goldmans came in at 10X what I paid (- I bought in 2005).

I am eagerly awaiting the IPO and have my fingers crossed that the value I have will push high enough to take my investment to 7-figures.

I hope Goldmans has "got it right" paying 10x what I paid.

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Great.

Bring Goldman in at a high price, and I will pay you a handsome commission

You guys better pay me a fat bonus, otherwise I join the competition or start my own blog. :P

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You guys better pay me a fat bonus, otherwise I join the competition or start my own blog. :P

Surely, as a private members club, we all get a share :rolleyes:

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Surely, as a private members club, we all get a share :rolleyes:

 

From Slashdot:

 

http://news.slashdot.org/story/11/01/07/16...Revenues-Leaked

 

"Think that Goldman Sachs spent too much on Facebook with the $450 million investment? Well, a very wealthy customer of theirs decided to leak Facebook's financials yesterday after receiving it over lunch: '... during the first nine months of 2010, Facebook generated $1.2 billion in revenue. Net income at the firm was $355 million. The financial statements were not audited and offered little detail about how Facebook generates its revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.' Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income. Given that, should Facebook be valuated at $50 billion?"

 

So it is overvalued

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So it is overvalued

Oh, only by a factor of about 12 (being kind).

 

I fear facebook will become a victim of it's own success, trends usually change quickly.

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Surely, as a private members club, we all get a share :rolleyes:

When the valuation is realised at over $1 billion, you can all get something.

 

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When the valuation is realised at over $1 billion, you can all get something.

Cheers Dr B, as they say "it is better to give then to receive". ;)

 

PS, never actually used FB.... yep, I'm the one.

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Could Goldman be trying to blow a new internet bubble and stimulate the economy as a favour to the Fed? These bubbles have been made before in the 90s with Netscape and Ebay.

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Could Goldman be trying to blow a new internet bubble and stimulate the economy as a favour to the Fed? These bubbles have been made before in the 90s with Netscape and Ebay.

They are just riding a new bubble that is already forming around "social media" properties,

apart from GEI

 

Or maybe I should correct that.

 

Here's where the bubble has taken GEI's value so far:

Greenenergyinvestors.com: $13,753 USD

 

/see: http://valuethewebsite.com/www.greenenergyinvestors.com

 

That's probably about $2-3 per day, for the long hours I spend here almost every day.

Mammoth, eh?

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It's all fear and greed from investors eager to not miss "the next Google".

 

But, FaceBook is not Google.

 

Everything is dependent upon what's in FaceBook's business plan. After all, the site has changed vastly in the last five or six years; they've hired some very smart people and it's reasonable to assume that they're preparing to add significant new functionality that appeals to their users.

 

I don't think that marketing / demographics data mining alone could make it worth fifty billion. That's just nuts. But I do think that such networking of social groups opens up opportunities for those groups to share data within them. I think they could possibly take on Apple and iTunes as a media / content delivery system, if they played their cards right. Apple is currently the second largest company in the world by market capitalisation (after Exxon-Mobile). Where does Apple make their big bucks?

 

It's all ifs and buts. I won't be buying if they IPO, but I might if the price then dropped to give more favourable ratios. I'd better fill in form W8 sharpish... chop chop...

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Thanks a lot. I stick with silver.

 

http://news.silverseek.com/SilverSeek/1294236772.php

Facebook worth More Than the Entire Silver Market

...

The truly staggering valuation of $50 billion that Goldman Sachs has placed on Facebook, the Internet social networking website is significantly higher than the estimated $30 billion value of silver held in the vaults of the world.

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I don't think that marketing / demographics data mining alone could make it worth fifty billion. That's just nuts.

 

Think about advert delivery business alone..E.g.

 

Sally Mae is single, aged 21 and lives in London and she has 10 friends in Glasgow that she regularly chats to on facebook. Her interests are listening to Take That, visiting the theatre and investing in gold.. She logs into facebook 3 times a day.

 

Facebook can target ads to Sally Mae such as "Cheap flights to Glasgow", "Dating Websites", "Take That latest CD Music downloads", "Tickets to the theatre", "Gold coins/bullion ads" etc..

 

Google can't offer the same degree of ad targetting that facebook can so I believe that facebook will be better for certain advertisers than google. Its also likely that Facebook's ads will have a higher click through rate than Google.

 

Don't get me wrong, I wouldn't invest, but I think people are vastly underestimating Facebook.

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