Heres to an expected $100 billion market valuation to the latest Silicon Valley Legend, Facebook- A Mark Zuckerberg Production.
Some milestones that made FB what it is-
1) Beating up MySpace, Ibibo, Google Orkut combined
2) Smart timely acquisitions from Friend feed , to Instagram
3) Superb infrastructure for 900 million accounts, fast interface rollouts, and a policy of never deleting data. Some of this involved creating new technology like Cassandra. There have been no anti-trust complaints against FB’s behavior particularly as it simply stuck to being the cleanest interface offering a social network
4) Much envied and copied features like Newsfeed, App development on the FB platform, Social Gaming as revenue streams
5) Replacing Google as the hot techie employer, just like Google did to Microsoft.
6) An uncanny focus, including walking away from a billion dollars from Yahoo,resisting Google, Apple’s Ping, imposing design changes unilaterally, implementing data sharing only with flexible partners and strategic investors (like Bing)
FB has made more money for more people than any other company in the past ten years. Here’s wishing it an even more interesting next ten years! With 900 million users if they could integrate a PayPal like system, or create an alternative to Adsense for content creators, they could create an all new internet economy – one which is more open than the Google dominated internet ; 0
some questions in my Mind as I struggle to bet my money and pension savings on Facebook IPO
1) Revenue Mix- What percentage of revenues for Facebook come from Banner ads versus gaming partners like Zynga. How dependent is Facebook on Gaming partners. (Zynga has Google as an investor). What mix of revenue is dependent on privacy regulation countries like Europe vs countries like USA.
2) Do 800 million users of Facebook mean 100 billion valuation ? Thats a valuation of $125 in customer life time in terms of NPV . Since ad revenue is itself a percentage of actual good and services sold- how much worth of goods and services do consumers have to buy per capita , to give $125 worth of ads to FB. Eg . companies spend 5% of product cost on Facebook ads, so does that mean each FB account will hope to buy 2500$ worth of Goods from the Internet and from Facebook (assuming they also buy from Amazon etc)
3) Corporate Governance- Unlike Google, Facebook has faced troubling questions of ethics from the day it has started. This includes charges of intellectual property theft, but also non transparent FB stock option pricing in secondary markets before IPO, private placement by Wall Street Bankers like GoldMan Saachs, major investments by Russian Internet media corporations. (read- http://money.cnn.com/2011/01/03/technology/facebook_goldman/index.htm)
4) Retention of key employees post IPO- Key Employees at Google are actually ex- Microsofties. Key FB staff are ex-Google people. Where will the key -FB people go when bored and rich after IPO.
5) Does the macro Economic Condition justify the premium and Private Equity multiple of Facebook?
Will FB be the next Google (in terms of investor retruns) or will it be like Groupon. I suspect the answer is- it depends on market discounting these assumptions while factoring in sentiment (as well as unloading of stock from large number of FB stock holders on week1).
Baby You Are a Rich Man. but not 100 billion rich. yet. Maybe 80 billion isnt that bad.
After a few hiccups, Facebook has gotten the notifications scrolling back and much better than Google Plus. This gives it a cleaner advantage in social gaming interface – even for the same game. and of course many more gamers!
Clearly the games stream is much more efficiently designed in FB, probably because they need to earn some ad revenue- that forces you to think more optimally for space. FB interface is also bug free compared to the constant error in G+ (error changing circle membership– ideally I wanted to create one gaming circle for all gaming friends)
See this – not just compare the games stream/notifications only