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Post by clinton on Feb 12, 2014 21:44:02 GMT -5
Finally someone did the research, Ive always thought FB a scam
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Post by clinton on Feb 12, 2014 22:14:15 GMT -5
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Post by huh on Feb 13, 2014 0:23:44 GMT -5
LOL. I think the whole thing is funny. I was using Banner Ads when banner swapping was all the rage. This is the exact same thing all over again.
I bet if you took all of the reported page views by companies that make money on ad sales and page view counts, you'd get a number that is higher than all the Internet users out there X's the number of pages they actually view. It's like cable TV. Hundreds of channels. Yet everyone of them seems to get a larger % share of hourly viewing than they should/could. Add them all up and you get more viewing hours than there are number of hours X's number of viewers.
It'll all end the same as banner ads did. Keep hitting people with enough obtrusive & unsolicited ads and either they'll eventually stop using the service, or advertisers will stop paying for the ineffectiveness of it, or both. I already stopped using Twitter for that exact reason. No way I'm going to sift through hundred of 'posts' to find the ones that I intended to get.
Google actually has the best ad model. Why? 3 reasons - First, the ads aren't necessarily unsolicited. They at least pertain to the users search (targeted). Second, the advertiser only pays for a click, not a view (effective). Third, the ads aren't intrusive. Anyone that uses Google knows that if not looking to buy a product/service, simply ignore the top 2 or 3 results and the ones on the right hand side (unobtrusive). Google makes it very obvious which are ads and which are search results. Can't say the same for FB or Twitter. And if people feel like someone's trying to trick them into reading an ad, those ads will never be effective.
FB actually has a lot of good potential. So why wouldn't they do something similar to Google's methods? Simple. No way they could generate enough revenue to even come close to meeting their hyped valuation. It'll end badly. Then FB will fix it so that the ads are targeted & wanted, effective and unobtrusive. Then the company will be a good long term hold.
JMHO
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Post by huh on Feb 13, 2014 0:28:28 GMT -5
Put it this way...if Google started mixing paid ads into the natural search results, and they looked like natural search results, then Google would no longer be the dominant search engine. It's really that simple.
FB & Twitter are making this mistake from the start.
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Post by walnut on Feb 13, 2014 8:57:30 GMT -5
That guy Gundlach had it right yesterday, the social media companies are too vulnerable to the fads and whims of the Internet. Not enough substance to be an investor, just a trader, but he wasn't even interested in that.
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Post by clinton on Feb 13, 2014 9:44:55 GMT -5
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Post by clinton on Feb 13, 2014 21:33:14 GMT -5
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Post by huh on Feb 20, 2014 0:37:15 GMT -5
If anyone is seriously still doubting whether or not we are seeing similar signs to the DotCom Bubble, take a couple minutes and read this: ------------------------- So Facebook buys WhatsApp for $16B...OK, actually $19B over 4 years including the restricted shares. It should be noted that WhatsApp was recently valued at around $5B, and even that was considered to be at the high end. So they basically are paying 3.8X's recent valuation. But let's break out some of our own simple math: WhatsApp, a 5 year old company has: 50 employess and 450M active monthly users. At $19B, that's a purchase price of $380M per employee, or more importantly, $42.23 per user. And at an annual fee of $1 per user, that's an ROI of a little more than 42 years. (and amazingly that's a price of $2.70 for every single person on the planet) But, to be fair, 'The Zuck' has already stated that he doesn't intend to monetize WhatsApp (meaning that even the current $1 per year fee could be waived), but instead use it for FB growth. And I'm assuming that's mostly international growth since that's where WhatsApp's strengths lie, and North America & Europe already make up 75% of FB's revenue and is near a saturation point. It's the rest of the world that FB needs to focus on for growth now. So let's assume that EVERY WhatsApp customer is outside of North America & Europe, and becomes a FB user (and assuming they're not already). FB's Average Revenue Per User (ARPU) for this demographic is currently $2.96 per year. So in a very generous calculation, this purchase of WhatsApp should generate a positive ROI in about 14 years if the current WhatsApp fee is dropped. If the annual $1 fee remains in place, then "only" about a 10 year ROI. And I say generous because remember that although WhatsApp is growing, we are also assuming that EVERY SINGLE WhatsApp user becomes a regular FB user and that NONE of them already use FB. And just because FB owns WhatsApp doesn't mean every non-English speaking person is going to jump on board with FB. There is a very serious risk here beyond the crazy price and ROI's - and that is the assumption that if FB integrates WhatsApp into FB's site that every current WhatsApp user will simply follow along. What's to say that they won't simply jump on over to another IM app? So when you read the articles that say that FB's purchase of WhatsApp might be somewhat expensive, but not ludicrous, remember this: FB bought it at more than 42 years of its revenue & is assuming that integrating it into their systems will automatically add all those users to their systems. Why didn't FB simply create their own app for much, much less? That's not only a risky bet, but a very, very expensive one. Even if their assumptions are 100% correct! Oh, and BTW, FB's market cap is currently valuing it at around $140 per user. Their current Average Revenue Per User worldwide is $6.88 per year. That's an extremely high expectation for growth! Especially when you consider that FB claims to have 1.23B active monthly users, and the Internet World Stats show that a total of 2.4B people in the world use the Internet. This means that currently FB can only grow it's user base by a factor of 2x's!Now take a step back and think about this a moment...FB would have been better off offering every single WhatsApp user $1 a month for using FB for an entire year, thereby generating a profit for each of those users of $11 a year, after paying their WhatsApp annual fee. FB, at a maximum, would have spent only $5.4B and saved themselves at least $13.6B! And they would have guaranteed that every dollar spent resulted in an active FB user! But, that would be thinking like Google, instead of thinking like any dotcom bubble company that burst years ago. ... And if you think I'm totally wrong, take a look at a very similar situation that occurred back in the late 90's. The company was AOL, and it was buying ICQ for $407M back in 1998. ICQ then had 12M users. That was a purchase price of $34 per user, or 20% cheaper than this WhatsApp purchase. And that worked out well, didn't it? AOL sold ICQ 3 years later for $187.5M. That's a loss of $219.5M, or 54%. ICQ then had 100M users. So that's a selling price of $1.88 per user, or 94% less than what they paid. It's like I've said so many times before. When companies go IPO, but are far, far too overvalued, they will do desperate things in order to attempt to meet investor demand for revenue growth. Even if that means paying far too much for other, overvalued companies. The only difference back in the DotCom Bubble was that people were counting page views instead of users; and banner ad clicks versus ad views. The bubble now is not tech in general, or even dot coms, but rather social media (including those app and game companies). For reference: I grabbed some of the FB data from here. More info on the AOL/ICQ acquisition can be found here and here. Internet World Stats here.
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Post by clinton on Feb 20, 2014 7:14:04 GMT -5
AnalystRatingsNetwork Facebook downgraded by Evercore Partners to equal weight. stks.co/r00tf $FB
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Post by clinton on Feb 20, 2014 7:28:29 GMT -5
If anyone is seriously still doubting whether or not we are seeing similar signs to the DotCom Bubble, take a couple minutes and read this: ------------------------- So Facebook buys WhatsApp for $16B...OK, actually $19B over 4 years including the restricted shares. It should be noted that WhatsApp was recently valued at around $5B, and even that was considered to be at the high end. So they basically are paying 3.8X's recent valuation. But let's break out some of our own simple math: WhatsApp, a 5 year old company has: 50 employess and 450M active monthly users. At $19B, that's a purchase price of $380M per employee, or more importantly, $42.23 per user. And at an annual fee of $1 per user, that's an ROI of a little more than 42 years. (and amazingly that's a price of $2.70 for every single person on the planet) But, to be fair, 'The Zuck' has already stated that he doesn't intend to monetize WhatsApp (meaning that even the current $1 per year fee could be waived), but instead use it for FB growth. And I'm assuming that's mostly international growth since that's where WhatsApp's strengths lie, and North America & Europe already make up 75% of FB's revenue and is near a saturation point. It's the rest of the world that FB needs to focus on for growth now. So let's assume that EVERY WhatsApp customer is outside of North America & Europe, and becomes a FB user (and assuming they're not already). FB's Average Revenue Per User (ARPU) for this demographic is currently $2.96 per year. So in a very generous calculation, this purchase of WhatsApp should generate a positive ROI in about 14 years if the current WhatsApp fee is dropped. If the annual $1 fee remains in place, then "only" about a 10 year ROI. And I say generous because remember that although WhatsApp is growing, we are also assuming that EVERY SINGLE WhatsApp user becomes a regular FB user and that NONE of them already use FB. And just because FB owns WhatsApp doesn't mean every non-English speaking person is going to jump on board with FB. There is a very serious risk here beyond the crazy price and ROI's - and that is the assumption that if FB integrates WhatsApp into FB's site that every current WhatsApp user will simply follow along. What's to say that they won't simply jump on over to another IM app? So when you read the articles that say that FB's purchase of WhatsApp might be somewhat expensive, but not ludicrous, remember this: FB bought it at more than 42 years of its revenue & is assuming that integrating it into their systems will automatically add all those users to their systems. Why didn't FB simply create their own app for much, much less? That's not only a risky bet, but a very, very expensive one. Even if their assumptions are 100% correct! Oh, and BTW, FB's market cap is currently valuing it at around $140 per user. Their current Average Revenue Per User worldwide is $6.88 per year. That's an extremely high expectation for growth! Especially when you consider that FB claims to have 1.23B active monthly users, and the Internet World Stats show that a total of 2.4B people in the world use the Internet. This means that currently FB can only grow it's user base by a factor of 2x's!Now take a step back and think about this a moment...FB would have been better off offering every single WhatsApp user $1 a month for using FB for an entire year, thereby generating a profit for each of those users of $11 a year, after paying their WhatsApp annual fee. FB, at a maximum, would have spent only $5.4B and saved themselves at least $13.6B! And they would have guaranteed that every dollar spent resulted in an active FB user! But, that would be thinking like Google, instead of thinking like any dotcom bubble company that burst years ago. ... And if you think I'm totally wrong, take a look at a very similar situation that occurred back in the late 90's. The company was AOL, and it was buying ICQ for $407M back in 1998. ICQ then had 12M users. That was a purchase price of $34 per user, or 20% cheaper than this WhatsApp purchase. And that worked out well, didn't it? AOL sold ICQ 3 years later for $187.5M. That's a loss of $219.5M, or 54%. ICQ then had 100M users. So that's a selling price of $1.88 per user, or 94% less than what they paid. It's like I've said so many times before. When companies go IPO, but are far, far too overvalued, they will do desperate things in order to attempt to meet investor demand for revenue growth. Even if that means paying far too much for other, overvalued companies. The only difference back in the DotCom Bubble was that people were counting page views instead of users; and banner ad clicks versus ad views. The bubble now is not tech in general, or even dot coms, but rather social media (including those app and game companies). For reference: I grabbed some of the FB data from here. More info on the AOL/ICQ acquisition can be found here and here. Internet World Stats here.[/quote]
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Post by huh on Feb 20, 2014 8:43:29 GMT -5
I can't get over the fact that FB would spend 10% of its current market cap for even the best case potential that comes from WhatsApp. (They spent 43% of what their market cap was only 18 months ago!).
Per their own numbers, FB already has 1.2B active users. There's only 2.4B Internet users on the entire planet! Even doubling the number of users wouldn't get them at a normal valuation. If FB gets 1B more users from the WhatsApp purchase as they hope to, I'm scared to even imagine what they may pay for the last remaining 200M Internet users.
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Post by clinton on Feb 20, 2014 8:55:31 GMT -5
so how much FB does warren buffet own?
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Post by clinton on Feb 20, 2014 9:16:43 GMT -5
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Post by clinton on Feb 20, 2014 16:30:09 GMT -5
since facebook will own 118% of the messaging service in germany, I havent heard anyone mention EU antitrust
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Post by clinton on Feb 20, 2014 16:33:12 GMT -5
GRPN just went from +18% to -6% AH LOL
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Post by walnut on Feb 20, 2014 16:42:37 GMT -5
The worth of one ad view or one click is going to have to come down down down. It should be a tiny fraction of a penny. I know from experience. Google ads used to charge $3 a click for some keywords years ago, I don't know where it has gotten since then. Glad as hell I don't mess with that penny-ante BS anymore.
disclosure: I am a cyber-cynic.
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Post by clinton on Feb 20, 2014 23:43:06 GMT -5
2014-02-20 06:28 by Karl Denninger in Company Specific , 143 references FaceFart Swallows A Grenade I was too busy chortling with glee at this particular piece of stupidity to write on it last night.... so you get it this morning.
Facebook Inc.’s $19 billion purchase of WhatsApp Inc. is valuing the text-messaging service at a multiple investors currently only bestow on companies developing life-saving drugs.
Zuckerberg is the one doing the drugs, and so is his board.
The basic premise is to try to "grab" back younger users that are fleeing the site. The problem with it is that like so many other so-called "Web 2.0" properties the company has essentially no hope of turning a profit and frankly, I suspect Facebook bought it only because it is desperate to try to find a way to both stem those defections and kill potential competitors -- by eating them.
Unfortunately WhatsApp is a relic of a time when mobile carriers charged by the message; that was what gave it a foothold in the marketplace, as it didn't -- its "free for the first year" model looked attractive. Unfortunately its model was predicated on you giving them your phone number, which now turns your phone into a spam magnet as the company has it forever and it follows you.
The firm of course touts this as "good" as it makes you friends able to find you easier. But what it is also does is forces you to change your number, which is monstrously disruptive for real people doing real productive things, when someone decides to make your life a living hell using that information.
Go ask anyone who has found themselves on the receiving end of that sort of thing about how much fun it was. Then consider that Facebook is continuing to enable that sort of crap.
In the end desperation moves, and paying 19x a ridiculously rosy forward projection in sales certainly qualifies, tells you more about the buying company than the acquired one.
In this case the dilution Facebook shareholders are going to take in this deal is likely to be the least of the damage they suffer in the ensuing quarters.
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Post by clinton on Feb 21, 2014 11:01:14 GMT -5
looks like robot magic to me Im sure ZUCK owns several HFT bots, why wouldnt he? Attachments:
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Post by maxi on Feb 23, 2014 11:40:59 GMT -5
Just wanted to mention that I get NO advertising on my FB page due to the fact that I have AdBlock installed. FB has NO chance of winning back defecting teens/ younger users. They don't go back - only on to the next newest coolest thing. Backwards is social suicide. Facebook is now used by middle aged and older folks that only want to connect with other older folks. That group is not going to be swayed by idiot advertising.
I just saw your new gif Clinton - that is hilarious!
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Post by jacksrbtr on Feb 23, 2014 11:58:31 GMT -5
Just wanted to mention that I get NO advertising on my FB page due to the fact that I have AdBlock installed. FB has NO chance of winning back defecting teens/ younger users. They don't go back - only on to the next newest coolest thing. Backwards is social suicide. Facebook is now used by middle aged and older folks that only want to connect with other older folks. That group is not going to be swayed by idiot advertising. I just saw your new gif Clinton - that is hilarious! I'm not so sure - I succumbed to buying a pkg of dark chocolate M&Ms the other day.
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