Comments on: How Can You Make Money off Facebook? http://www.thefreshtrader.com/stock-analysis/how-can-you-make-money-off-facebook/ Stock Market for Beginners Thu, 24 Jul 2008 02:41:41 +0000 http://wordpress.org/?v=2.2 By: Dan http://www.thefreshtrader.com/stock-analysis/how-can-you-make-money-off-facebook/#comment-79 Dan Fri, 27 Jul 2007 13:13:05 +0000 http://www.thefreshtrader.com/stock-analysis/how-can-you-make-money-off-facebook/#comment-79 I'm not sure I believe that Facebook is really worth $7 to $10 billion, but maybe I'm just jealous of Mark Zuckerberg. Honestly, I'm inclined to believe that he did in fact steal the idea from ConnectU. Having had a few friends at Harvard during the time that the two social networks were launching, the story goes that he was originally part of the coding team, dragged his feet while he launched his own site, then left ConnectU reeling. But, that's beyond the point. Let's look at the facts, MySpace boasts somewhere around 100 million accounts while Facebook only records 30 million. MySpace is garbage and Facebook includes ownership of a terrific platform "the Facebook API" which some rumor could lead to an eventual webOS. The big difference is that with only 3ish times the number of recorded account, MySpace seems to legitimately lay claim to $1 billion in revenue while Facebook is struggling to turn its users into cash. The $150 million in revenue that Facebook claims is heavily supported by a deal with Microsoft to serve their ads and that contract runs up in 2009. With people reporting <a href="http://valleywag.com/tech/social-networks/facebooks-users-turn-up-their-noses-at-its-ads-277750.php" rel="nofollow">click through rates as low as .04%</a> from Facebook while MySpace can boast upwards of .10% for its campaigns, it would stand to follow that Microsoft will at least want to restructure the ad service deal in 2009 if not pull it completely. Don't get me wrong, I'm not discounting the importance of a strong technological platform as well as access to 30 million in a terrific demographic, but Facebook thus far has not proven that it can bring in the cashola anywhere near as well MySpace and, as a result, I believe that any smart investor would know not to value it at a premium as high as $7 to $10 billion. I’m not sure I believe that Facebook is really worth $7 to $10 billion, but maybe I’m just jealous of Mark Zuckerberg. Honestly, I’m inclined to believe that he did in fact steal the idea from ConnectU. Having had a few friends at Harvard during the time that the two social networks were launching, the story goes that he was originally part of the coding team, dragged his feet while he launched his own site, then left ConnectU reeling. But, that’s beyond the point.

Let’s look at the facts, MySpace boasts somewhere around 100 million accounts while Facebook only records 30 million. MySpace is garbage and Facebook includes ownership of a terrific platform “the Facebook API” which some rumor could lead to an eventual webOS. The big difference is that with only 3ish times the number of recorded account, MySpace seems to legitimately lay claim to $1 billion in revenue while Facebook is struggling to turn its users into cash. The $150 million in revenue that Facebook claims is heavily supported by a deal with Microsoft to serve their ads and that contract runs up in 2009. With people reporting click through rates as low as .04% from Facebook while MySpace can boast upwards of .10% for its campaigns, it would stand to follow that Microsoft will at least want to restructure the ad service deal in 2009 if not pull it completely. Don’t get me wrong, I’m not discounting the importance of a strong technological platform as well as access to 30 million in a terrific demographic, but Facebook thus far has not proven that it can bring in the cashola anywhere near as well MySpace and, as a result, I believe that any smart investor would know not to value it at a premium as high as $7 to $10 billion.

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