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CNN: Facebook failure to launch


bigvalboy
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Now that the first day of trading is over and Facebook has remained "Unchanged" for the day. Where will it go now? Is 38 dollars worth the price for admission? How will Facebook do over the long haul? And would you jump in now, with the price relatively reasonable? I am still on the fence with this one. I just don't know.

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It was hilarious to watch the afternoon trading in FB stock. FB made a wise choice to select JP Morgan, Goldman Sachs, and Morgan Stanley as underwriters, with deep pockets. They spent alot of money on their trading desks this afternoon with limit buy orders right at the IPO price to prevent the stock from breaking down. Any other IPO would have dropped. Next week, the underwriters will not be propping this stock up against those wanting to sell, but that will be balanced against those who decide to buy it, thinking that they may be picking it up on the cheap. Either way, it won't effect me.....ever. I refuse to buy stock in any company where one man's share has more voting power than another man's share.

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Either way, it won't effect me.....ever.

 

I think that over the long haul it will go up, but for me there are just too many factors that would cause it to go down. I am not willing to risk that kind of money at this stage of my life. There is this little greedy part of me that keeps saying, "but what if it starts to take off, you will loose that one opportunity to get in on the ground floor.".

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FB doesn't make anything that you can wear, drive, live in, or eat. In fact, it doesn't make anything at all except a currently trendy "social network", which could be untrendy next week. Value based on perception isn't value at all, IMHO. Harrumph.

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FB doesn't make anything that you can wear, drive, live in, or eat. In fact, it doesn't make anything at all except a currently trendy "social network", which could be untrendy next week. Value based on perception isn't value at all, IMHO. Harrumph.

 

Entertainment and work need to figure in there. Otherwise, you're excluding Apple, Microsoft, Cisco, and even Phillip Morris.

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Entertainment and work need to figure in there. Otherwise, you're excluding Apple, Microsoft, Cisco, and even Phillip Morris.

 

It wasn't so long ago that seeing billboards with a company's URL was unusual. Facebook is just a microweb, like YouTube—and the more innovative uses people figure out for it for blurring the lines between business and pleasure, the longer it will be around. The key to its long-term success is making people believe that it's an essential part of starting up a new business or tapping into a vital demographic. MySpace just didn't quite reach that level before it started to fall apart.

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Entertainment and work need to figure in there. Otherwise, you're excluding Apple, Microsoft, Cisco, and even Phillip Morris.

 

My point was that FB does not actually make anything. Apple makes all kinds of computerized gizmos. Microsoft makes software. Cisco makes chips and things. Phillip Morris makes things you can smoke. FB is a system, not a product.

 

The "failure to thrive" at birth was interesting to me. Perhaps as someone said above, people are waiting for the price to drop to pick it up more cheaply. But the headlines were that the underwriters were paddling furiously beneath the surface to make it all look smooth, when apparently it wasn't. So maybe FB is overvalued. Personally, I started out using FB but have practically stopped, as I find its format confusing to use, and frankly, it bores me. I'm pretty sure I'm not the only one.

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My point was that FB does not actually make anything. Apple makes all kinds of computerized gizmos. Microsoft makes software. Cisco makes chips and things. Phillip Morris makes things you can smoke. FB is a system, not a product.

 

 

I'm not sure what your point is/was? FaceBook IS software. It is also a service. UPS doesn't 'make' anything.

 

But the challenge for FaceBook will be how to make money without significantly compromising the user experience.

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FB doesn't make anything that you can wear, drive, live in, or eat. In fact, it doesn't make anything at all except a currently trendy "social network", which could be untrendy next week. Value based on perception isn't value at all, IMHO. Harrumph.

 

It wasn't so long ago that seeing billboards with a company's URL was unusual. Facebook is just a microweb, like YouTube—and the more innovative uses people figure out for it for blurring the lines between business and pleasure, the longer it will be around. The key to its long-term success is making people believe that it's an essential part of starting up a new business or tapping into a vital demographic. MySpace just didn't quite reach that level before it started to fall apart.

 

My point was that FB does not actually make anything. Apple makes all kinds of computerized gizmos. Microsoft makes software. Cisco makes chips and things. Phillip Morris makes things you can smoke. FB is a system, not a product.

 

The "failure to thrive" at birth was interesting to me. Perhaps as someone said above, people are waiting for the price to drop to pick it up more cheaply. But the headlines were that the underwriters were paddling furiously beneath the surface to make it all look smooth, when apparently it wasn't. So maybe FB is overvalued. Personally, I started out using FB but have practically stopped, as I find its format confusing to use, and frankly, it bores me. I'm pretty sure I'm not the only one.

 

I'm not sure what your point is/was? FaceBook IS software. It is also a service. UPS doesn't 'make' anything.

 

But the challenge for FaceBook will be how to make money without significantly compromising the user experience.

 

You guys (and gal) are almost there. Facebook makes ADVERTISING... Yeah, when you had to be a college student to join FB, they weren't making big bucks. Their audience was limited and on limited funds. Now that EVERYBODY can be on the BookFace, they are driving 900,000,000 people towards the advertisers who have paid to be seen on their micro-web.

 

Remember AOL and CompuServe as Internet Service Providers? For $9.95/month we could dial into see only THEIR ADVERTISERS. Then the Internet Service Providers knocked AOL, et. al. out because we could buy Internet without having to see AOL et. al.'s paid advertisers. Then AOL, Yahoo, Google, et. al. went Web-Based and started hiding their ads in their search results as well as the banners on their pages. Advertisers pay for positioning in the Search Results and for their banner to be on just the right page. While AOL and Yahoo struggle, it's because of their content, not their ad sales. Their content isn't bringing people to their websites. Google makes bucks because of their Content. Google has become a verb. That's how Google dominates the Search and Content markets.

 

Facebook has just developed a specialized Content - US - and now is exploiting ADVERTISING.

 

And by the way, Facebook at $38 is over-priced. If it weren't for the underwriters supporting the $38 price point on Friday, the stock would have dropped by some measure. It's too early to tell if the stock is a good investment - their are too many lookee-loos being chummed up by the market. Hell, I'd bet folks with $38 bought a share Friday but the rent's due on the 1st and they need that $38, so I expect in the short-run the stock might go down as far as $30.

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Facebook is not really software the way a consumer would think of it. Sure, they write their own PHP but there is no software that an end user can buy. It is service, but it is also free. The comparison to UPS does not make the logical leap. UPS sells the service of delivering physical goods. UPS, Microsoft and Cisco are arguably business that are geared more toward B2B interactions and not consumer markets. Sure Microsoft has the XBox and Cisco has Linksys but their largest market by far is business. I could go ship a package with UPS but the majority of their customers are businesses like Amazon. Apple is a consumer company selling physical goods. That $600 iPad cost them $300 to make. So the only companies we can really compare it to are it's predecessors (Friendster, MySpace and the like) and Twitter. Both are essentially making money off of ad revenue, at least Facebook is profitable. Twitter figured out that in order for their ads to make them any money they had to insert them directly into the stream. I can't stand it but I know they need to do it. Facebook's ads are profitable but their effectiveness is still in question. It is turning out that people are more interested in interacting directly with a companies page than clicking on ads. Now, if Facebook started charging businesses for the service of providing these pages, they could probably make a decent profit. One thing to keep in mind about both of these companies, they don't actually create any content. They rely entirely on their users to make content. And our history of companies like this shows us that the public can lose pinterest and move on quickly, the bodies of Friendster Myspace and Orkut lay about the web to this day.

 

More over, news leading up to the IPO was not all that rosy for Facebook. Mark decides to buy instagram, really? $1 Billion? Then the FTC announces its routine investigation. GM pulled the $10 million it spends in ads a year on Facebook. Then Facebook itself announces that they need a way to monetize their mobile applications because users are leaving the desktop and moving to mobile, where they have no ads. And they increased the amount of shares their pre-IPO investors could sell in the IPO.

 

It is not shocking to me at all that the IPO was flat. Groupon was good for something after all, reminded people to be a little more careful with their money. Speaking of, you know who should buy Groupon? Walmart.

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Advertisers pay for positioning in the Search Results and for their banner to be on just the right page. While AOL and Yahoo struggle, it's because of their content, not their ad sales.

 

You can't pay for placement in search results on Google. You can pay for placement on the page.

 

Yahoo struggles cause it has no idea what it wants to be. Portal -> Search -> Content/Portal -> Search -> Bing/Patent Troll/Content? Yahoo needs a do-over or to just chop themselves up and sell.

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