DISQUS

Marketing Pilgrim: Facebook Headed for Financial Ruin?

  • Ed · 1 year ago
    It will survive as much as Myspace.com has survived. I will let you decide whether or not that is a positive or a negative

    Ed's last blog post..GO VOTE!!
  • Engago Team · 1 year ago
    The over-valuation could kill Facebook as managers and employees are used to spending.

    Obtaining more funding will not solve the problem as spending has become part of the culture of the company.
  • Wes Schadenfreud · 1 year ago
    ah ... Bandwidth is Currency ... Accounting matters so why not define the network & determine basic utility value of telecom so folks can understand what is worth paying for ... This is an important debate for both industrial policy & such things as attribution for promoting innovation ... (Bilski decision could have been more logically consistent with the reality of value creation in our economy & the contradictory positions of the Coalition for Patent "Fairness" (CFP) in member amicus briefs filed should be open to serious discourse) ... Facebook = $15 bil in what equivalence to bandwidth plus coding / value-add?
  • Wes Schadenfreud · 1 year ago
    Interestingness? No ... willingness to pay (could the spam filter complexity one day exceed the user's knowledge - nahh)
  • Chuck LeDuc Díaz · 1 year ago
    It won't kill Facebook, but it will mean that they'll have to accept Microsoft's final and terrible embrace. After Redmond eats Facebook it will remain popular, but it'll never progress again. It'll be the Hotmail of the 2010s.

    Chuck LeDuc Díaz's last blog post..Semantic web startup Twine hard to get wrapped up in
  • PS3 · 1 year ago
    How can you say only in the phrase "up only 32%" - most sites and businesses would fall over themselves at that kind of improvement.
  • jf · 1 year ago
    Chuck's probably right. It will never fail, but it may be sold for really cheap.
  • Zurpit · 1 year ago
    If its increasing that much in America, Im sure it will survive, only time can tell now
  • George Bounacos · 1 year ago
    No Almond Joys? That's not a nice Halloween. It's not about the visitors. It's about the majority of the audience being nowhere in a buying cycle while they are at FB. Sure, branding will work and some folks will make money on apps pushing affiliate links, but those who thought FB was the next great portal are quickly seeing the truth. It was a well done site with massive viral. Someone will eventually come along and disrupt the concept.
  • springer · 1 year ago
    "bandwidth costs in those countries is generally much higher than the U.S. So the users cost more..."

    ... this could not be more wrong.

    A website pays for bandwidth in the country in which it operates, if foreign visitors visit, it doesn't pay foreign providers. The sentence is misleading. This issue at hand is that there are foreign visitors (which yes, cause higher bandwidth costs -- but at local prices), and Facebook has no ability to sell ads targeted to these users. They have no inroads into the large international agencies, and they have not feet on the ground IN those foreign local markets to get local money.

    Basic problem: Their audience and infrastructure is thousands of times larger than their sales ability.
  • go green · 1 year ago
    A friend of mine at work was talking to me about facebook and I totally agree with him. The long-term perspective of how much money the site can make is already maxed out. Most people don't want to go there to get bombarded with ads and therefore it is hard for them to make money off of people.

    go green's last blog post..Maryland Environmental News: October 2008
  • Armen Shirvanian · 1 year ago
    It is interesting that Facebook appears to be in this situation. Spreading too far around the world, without the proper control, looks to have left Facebook in a bind that is not a normal situation that companies are usually having to deal with as a problem. A problem like this is the kind that could cause a company to change some of their goals since the conditions have changed.

    Armen Shirvanian's last blog post..Using Long-term Thinking To Reduce Regret
  • Busby SEO · 1 year ago
    It will survive or not, let see how it would be :D

    Busby SEO's last blog post..By: Dukungan untuk newbie SEO ini - Busby SEO Test
  • Michael Leander · 1 year ago
    It will survive, but it needs to increase visibility in the larger markets in Europe and to figure out a paid subscription model that adds value to the people, so to speak.
    Interestingly, there are more Danish people (population 5,5 mill) on Facebook than German people (population 80 mill.).

    Why not start offering photo prints. As a revenue generator it is working well for some photo sharing sites. And it adds stickiness as well.

    Michael Leander's last blog post..BENCHMARK YOUR EMAIL MARKETING: FIRST EVER PAN EUROPEAN EFFORT
  • Ami Ohayon · 1 year ago
    Much of their user base is high school kids (certainly, amongst my friends and colleagues, it's their teenagers who use Facebook more that anyone else in their circles).

    Although they often drive household purchases (grocery choices, upgrading high-speed internet, more powerful computer, cable TV, etc.), it's not a demographic that has a credit card in their hand.

    If Facebook doesn't move to a subscription model, I find it hard to see where their revenue growth will come from. I agree with Michael, who suggested services like photo printing ... but these impulse buys will require a payment method that's available to teenagers. How many parents will hand over a credit card number to their little darlings?!

    Ami Ohayon's last blog post..From Jerusalem to Boston
  • Saad Kamal · 1 year ago
    They made a huge mistake by partnering with Microsoft. They should have gone with Google Instead.

    Their Own Ad Network "Facebook Ads" doesn't really convert well (According to many advertisers)..

    Saad Kamal's last blog post..Google Experiments with Social Voting within Search
  • Helen · 1 year ago
    I like facebook. It brings lots of freinds.
  • iPod · 1 year ago
    This kind of thing has happened time and time again. Sites build up their popularity before becoming a sustainable business. Youtube is a fine example. It is an extremely popular site however is is a free service. The cost of serving all those millions of users with free videos is tremendous. What Google bought was a user base and not a sustainable business. This is why they are slowly introducing more and more ads. Facebook will have to do the same.

    Could just sell user's data, that would be easier but maybe slightly more illegal...

    John
  • Utah SEO Pro · 1 year ago
    Now's the time to buy Facebook.

    Utah SEO Pro's last blog post..Link Metrics for SEO
  • GoScript · 1 year ago
    Ruin, definitely not. But it won't bring them a huge profit for sure. But look for the bright side: there will alway be someone ready to acquire them.

    GoScript's last blog post..WordPress Uniquefier Plugin v3.0
  • SoLinkable · 1 year ago
    I've been following this on TechCrunch, and I don't think that there is any question at all that Facebook will survive. While they may be experiencing hiccups by attempting to expand too quickly, they will make it. If you have a girlfriend who is in the 20-29 year old demographic, then you know how much time she spends on facebook...
  • MB Web Design · 1 year ago
    It's clear that Facebook's valuation was based on potential revenue rather than current monetisation. What is disturbing is that in the time since then they really haven't made much ground at all in trying to turn their massive subscriber base into a thriving market.

    The survival of Facebook shouldn't be in question, but the future of its management.

    MB Web Design's last blog post..H2D Hair Straighteners
  • Kevin · 1 year ago
    As an agency which regularly recommends Facebook to our clients in Australia, and based on the success these clients enjoy using the site I have little doubt Facebook will prosper. As for Facebook's growth of 32% in the US, by most standards year on year growth of that magnitude would be reason to celebrate.

    Kevin's last blog post..Shop blindness on steroids
  • Bobby · 1 year ago
    Youtube does alright, and has done for a few years longer than FB. And they deal with videos (a lot more bandwidth) not text and little pictures.
  • Ephraim · 1 year ago
    I can not understand FB business model and if they even got one, they become the most popular network online on a viral way, however since then, they raised money but are not showing any reasonable way of incoming.

    The truth, since they've completly ignored unhappy "new-facebook" users, I ask my self if
    any one understands what he is doing there?
  • Danny Cooper · 1 year ago
    I find it hard to believe that Facebook isn't fulfilling its potential, between the 100,000,000 members and billions of pageviews.

    Danny Cooper's last blog post..November Case Study - Blog Contest!
  • Den · 1 year ago
    Just like Engago Team quoted: "Obtaining more funding will not solve the problem as spending has become part of the culture of the company"

    For a company that worth 15 billions and people behind it with overpaid salaries and partying all nights. Facebook is destined for destruction.
  • Naples Marketing Atom McCree · 1 year ago
    Not gonna happen. Facebook has a nice system in place and is far enough along where they will never be like hotmail. I continue to see growth there with the enterprise market only beginning to understand it. With the road of youtube so goes facebook, i.e. creative ad strategies. Just look at the new itunes integration with songs on youtube. If they want to generate some great revenue they can begin to offer special applications that are on a pay model. This will allow the user to determine the extent of their experience. Just think of the scrabble knockoff. You have millions of customers in a store. Now all they have to do is figure out what to sell them. Facebook will not go down in flames, they are just in their infancy with their advertising and marketing strategies to generate profit.

    Naples Marketing Atom McCree's last blog post..Creativity vs. Performance
  • cat · 1 year ago
    I don't thinck that Facebook gonna fail, they have very good economical potential
  • Nicole Price · 1 year ago
    This is a peculiar development, one no one could have foreseen. A very interesting study of skewed growth in different market segments, one actually subsidizing the other and the former losing revenue and market share! I wonder if just additional funding will do the trick.

    Nicole Price's last blog post..Green Tax Breaks
  • Internet Entrepreneur · 1 year ago
    Mark Zuckerberg should have sold the site while it was worth a billion and a half dollars. They still have problems monetizing it, and if this problem persists Facebook will be sold for pennies (I mean only several hundred $mil:))

    Internet Entrepreneur's last blog post..Weezer King
  • Soap Nuts Laundry Detergent · 1 year ago
    Interesting. We no longer spend money on advertising, as we have now moved into the top 5 of google, but when we did do Facebook advertising, we found that the United Arab Emirates gave us great return on our money, as they have lots of money & there is little advertising competition there.
  • iPod · 1 year ago
    The fact is that if Facebook try to heavily monetize the site it will push the users away. If users are bombarded with ads then they won't hesitate in moving on.
    John
  • savings · 1 year ago
    All the "social networking" sites were fun and novel at first, but it doesn't take people very long to get bored with the whole thing. I mean the sites don't really do much of anything, and once you've established contact with your long lost friend, lover, cell mate, there's no point in using the sites to stay in contact.

    As far as making new "friends" on these sites, who really does that? You may swap a few messages with someone but will you ever really get to know them, will you ever meet them in person, will you care when they stop using the site? The answer is probably a resounding no!

    Want to meet new people? Why not try the tried-and-true ways of going to the pub, or sporting events, take up a hobby, selling drugs, or, god-forbid, talking to your co-workers.

    Death to social networking - it's a silly idea. Facebook one of them???Not sure!!!

    It still meets our daily needs funny enough
  • LEADSExplorer · 1 year ago
    Bebo (about 40mio users) and Netlog (35mio users) are strong competitors in Europe.
    The main asset of Netlog is the easy localization at a low cost, which could help them spread further over the world.

    Stil lall of them are in need for a business model.
  • Nick Stamoulis · 1 year ago
    That is amazing that a website this large and powerful is still to this day looking for funding. For all of those who attempt to launch social networking sites this post should put things into perspective.
  • Den · 1 year ago
    Of course they are big and well known, just think of the investment poured into the business to make it all the way to that kind of status. They don't want to start small and make they way up the chart like other small businesses.
  • Den · 1 year ago
    You're right 'savings' about people don't do much in a social networking sites. We want the members to be active at something not just posting their naked pictures online. I see more of that in MySpace or Friendster. A friendly social site slowly turned into amateur porn portal. For god sake they are children using this sites too.
  • Goran Web Design · 1 year ago
    Well I don;t think we could declare them going for a financial ruin as yet, they are actually growing rapidly and during such time costs also increase but the benefits will be ripped later when the growth has matured.
  • Busby SEO Test PH · 1 year ago
    I feel like a lot of apps still view Facebook as real estate - just another access point into your service.

    I remember John Donovan saying at YES Summit that Lending Club is placing themselves inside of popular social networks "the same way you put a physical branch where people are."

    Unless any given app adds value to the interaction that goes on inside of these social networks (for example, iLike is wildly successful in Facebook because it's another personality showcase) - which has to be more than simply being present - use will be scrappy.

    Busby SEO Test PH's last blog post..What's new in Gmail?
  • Shane internet marketing · 1 year ago
    if Facebook goes the way of Myspace it'll be survival and nothing more, rather frightening that such a popular and widespread phenomenon as Facebook could collapse so quickly.. oh well
  • MB Web Design · 1 year ago
    I disagree with some earlier comments stating that Facebook users will abandon ship if there's some in-your-face ad monetisation. People moan about the new design yet stick with it in their droves. The whole point of Facebook is that it's where everyone else is.

    MB Web Design's last blog post..H2D Hair Straighteners
  • Michael Leander · 1 year ago
    I agree with MB Webdesign. It will take an enourmous amount of bad choices for Facebook to provoke users to leave.

    Michael Leander's last blog post..CMO TRENDS 2009 - NEW STUDY