Guest valueInv Posted January 23, 2014 Share Posted January 23, 2014 ValueInv, what is your opinion of FB's current valuation? At $120 per user you have to wonder how they are going to get there. Would love to hear your take on this. Yes, they are very expensive. I bought a small position at $27 and I doubt I'm going to lose money on this. I consider this an immature business and a speculative stock. While I will continue to hold in the short term, I wouldn't buy at $57. They have one of the most valuable assets on the web. The key will be how they monetize this. They have a lot of options and they have the team that is capable of monetizing successfully. A big game changer will occur if they successfully use the social graph to create a big business other than advertising like social commerce, gifting, a new form of gaming, paid content, etc. In that scenario, they can be easily worth $120 per user or more. But with just advertising, it is going to be difficult. Also, consider Instagram which is growing quickly and is not yet monetized. Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 23, 2014 Share Posted January 23, 2014 They continue the process of building their advertising business: http://techcrunch.com/2014/01/22/facebook-mobile-targeting/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 24, 2014 Share Posted January 24, 2014 Another one: http://gigaom.com/2014/01/23/will-disease-like-facebook-lose-80-percent-of-users-by-2017-dont-make-me-laugh/ Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 24, 2014 Share Posted January 24, 2014 I think Facebook is doing a pretty good job at monetizing the platform. Affiliate marketers love Facebook because it makes a lot of money for them. Facebook advertising works. Affiliate marketers love Google even more. You can go to uberaffiliate.com and understand their clients' perspective. Twitter is crap, Instagram is crap. At $120 per user you have to wonder how they are going to get there. Seems reasonable to me as long as Facebook continues to maintain or increase its traffic/popularity. Facebook has cash flows that support the current valuation. Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 29, 2014 Share Posted January 29, 2014 Interest to compare the CPC trends at Google and Facebook: http://venturebeat.com/2014/01/29/facebook-ads-cost-per-impression-up-186-cost-per-click-up-35-revenue-per-click-up-83/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 29, 2014 Share Posted January 29, 2014 http://techcrunch.com/2014/01/29/facebook-beats-in-q4-with-revenue-of-2-59b-eps-of-0-31/ But.....but.......teenagers are leaving...... :o Link to comment Share on other sites More sharing options...
DCG Posted January 30, 2014 Share Posted January 30, 2014 Up 18%. Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 30, 2014 Share Posted January 30, 2014 Up 18%. Maybe teenagers are buying the stock..... :P Link to comment Share on other sites More sharing options...
Guest valueInv Posted January 30, 2014 Share Posted January 30, 2014 ValueInv, what is your opinion of FB's current valuation? At $120 per user you have to wonder how they are going to get there. Would love to hear your take on this. Yes, they are very expensive. I bought a small position at $27 and I doubt I'm going to lose money on this. I consider this an immature business and a speculative stock. While I will continue to hold in the short term, I wouldn't buy at $57. They have one of the most valuable assets on the web. The key will be how they monetize this. They have a lot of options and they have the team that is capable of monetizing successfully. A big game changer will occur if they successfully use the social graph to create a big business other than advertising like social commerce, gifting, a new form of gaming, paid content, etc. In that scenario, they can be easily worth $120 per user or more. But with just advertising, it is going to be difficult. Also, consider Instagram which is growing quickly and is not yet monetized. While I reserve judgement on Paper, this is exactly the strategy I mean: http://techcrunch.com/2014/01/30/facebook-paper/ Standalone apps that make use of FB's social graph. Happy to see FB move in that direction. Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 3, 2014 Share Posted February 3, 2014 Impressive growth at Instagram: http://venturebeat.com/2014/01/29/instagram-doubled-its-userbase-in-2013/ FB also have another bun in the oven, though I expect them to face a uphill battle on this one: http://venturebeat.com/2014/01/30/facebook-and-parse-launch-bolts-a-better-way-to-develop-ios-android-apps/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 3, 2014 Share Posted February 3, 2014 Some nice work here too: http://gigaom.com/2014/01/31/with-open-compute-facebook-is-saving-billions-and-moving-markets/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 3, 2014 Share Posted February 3, 2014 The Facebook killer.....from Facebook: http://techcrunch.com/2014/02/03/paper-now-available-for-ios-in-the-us-and-it-could-be-a-facebook-replacement/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 6, 2014 Share Posted February 6, 2014 young people seem to be getting tired of facebook. http://news.investors.com/technology/011514-686594-facebook-users-fall-with-teens-college-students.htm Yeah, they're heading to Twitter alright ;): http://techcrunch.com/2014/02/05/twitter-user-growth-still-slowing/ Link to comment Share on other sites More sharing options...
infinitee00 Posted February 10, 2014 Share Posted February 10, 2014 I have no position in FB, but found this interesting post on reddit today ( I have no clue how much of their revs depend on likes or if this is just a sensational and inaccurate claim)- A demonstration on how Facebook's ad revenue is based on fake likes Facebook Fraud: Link to comment Share on other sites More sharing options...
Orange Posted February 10, 2014 Share Posted February 10, 2014 I have no position in FB, but found this interesting post on reddit today ( I have no clue how much of their revs depend on likes or if this is just a sensational and inaccurate claim)- A demonstration on how Facebook's ad revenue is based on fake likes Facebook Fraud: I also saw that on the front page of reddit. Here's a link to another video by the same guy, called the problem with facebook. Link to comment Share on other sites More sharing options...
yadayada Posted February 10, 2014 Share Posted February 10, 2014 buy some put options? Link to comment Share on other sites More sharing options...
DCG Posted February 10, 2014 Share Posted February 10, 2014 I have no position in FB, but found this interesting post on reddit today ( I have no clue how much of their revs depend on likes or if this is just a sensational and inaccurate claim)- A demonstration on how Facebook's ad revenue is based on fake likes Facebook Fraud: Interesting. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted February 10, 2014 Share Posted February 10, 2014 The display advertising on Facebook works. I think anybody shorting Facebook is making a big mistake. (Just go read some affiliate marketing blogs. Facebook is a very real thing... not quite as good as high volume as Google Adwords but Facebook also drives a lot of traffic.) Link to comment Share on other sites More sharing options...
APG12 Posted February 10, 2014 Share Posted February 10, 2014 The display advertising on Facebook works. The question is, works for whom? Is this guy's experience atypical? Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted February 10, 2014 Share Posted February 10, 2014 The kind of advertising that works is the direct response-style advertising. The FB user clicks on an ad and ends up on the company's landing page. The landing page will try to sell a product or service to the customer. Almost all clicks can be tracked down to a sale via cookies. The whole idea of trying to get lots of people to like your Facebook page (via Facebook advertising) and then to try to sell stuff to your Facebook fans is questionable in my opinion. It is very difficult to track your return on investment. And of course, fraud is a minor issue. 2- All of the advertising platforms have to deal with fraud. With Google Adwords it's inherently low. The only reason you'd do it is to hurt a competitor. (Google could commit fraud on its advertisers, but that would hurt Google's reputation and it wouldn't work because advertisers will adjust their budgets down if ROI drops.) With display platforms like Google Adsense, there is clickfraud. Google has algorithms to try to detect this and to ban bad advertisers. With Facebook, the fake users is a problem created by cheating advertising consultants. The advertising consultants (I can't remember the right term) are cheating their clients by using fake Facebook users to inflate the like count on Facebook pages. Eventually the clients may figure out their advertising doesn't have very good ROI. I think where the real value lies in Facebook is the style of advertising where FB users are directed to a landing page. This kind of advertising works, is easily measured, and advertisers love it because it makes them a lot of money. Link to comment Share on other sites More sharing options...
infinitee00 Posted February 11, 2014 Share Posted February 11, 2014 Could FB be using the same click farms used by sites like boostlikes.com use to sell their likes-based advertising? It seems the video is implying that they are..after explicitly asking their users not to do buy likes from those click farms. Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 11, 2014 Share Posted February 11, 2014 This is a fixable problem. Google had these problems too; they fixed it. Link to comment Share on other sites More sharing options...
Guest valueInv Posted February 11, 2014 Share Posted February 11, 2014 FB is still building out its ad machine: http://www.linkedin.com/today/post/article/20140210021038-59549-facebook-s-hiring-surprise Link to comment Share on other sites More sharing options...
DCG Posted February 12, 2014 Share Posted February 12, 2014 The kind of advertising that works is the direct response-style advertising. The FB user clicks on an ad and ends up on the company's landing page. The landing page will try to sell a product or service to the customer. Almost all clicks can be tracked down to a sale via cookies. The whole idea of trying to get lots of people to like your Facebook page (via Facebook advertising) and then to try to sell stuff to your Facebook fans is questionable in my opinion. Well, this is the complete opposite from what most social media 'experts' and authors/books advise businesses to do. The general goal of advertising on Facebook isn't to directly sell products. It's to build a relationship with customers and potential customers so they buy from you down the road. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted February 12, 2014 Share Posted February 12, 2014 Well, this is the complete opposite from what most social media 'experts' and authors/books advise businesses to do. The general goal of advertising on Facebook isn't to directly sell products. It's to build a relationship with customers and potential customers so they buy from you down the road. Facebook's advertisers are too busy making money to care. ;D Seriously though. You can do direct advertising and get instant feedback on how well you're doing. This allows advertisers to empirically split test their campaigns, landing pages, etc. etc. They figure out what works and what doesn't. And they know whether or not they're making money. This type of advertising is extremely, extremely compelling. These are the real experts. You can even read Ogilvy's book on advertising "Confessions of an Advertising Man", published in 1963. He was a fan of employees with a background in direct response advertising. He was a fan of direct response before the Internet existed. Link to comment Share on other sites More sharing options...
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