New Math - what if your site worth compared to Facebook?

craigiri

craigiri

Well-known member
Here is some basic math for those of you who get adsense and other ad revenue!

Facebook is going public today at a price which reflects 35X their yearly ad revenue!
Chances are that the stock will go up from there.

Therefore, if your site makes 30K a year from ads, your "FB comparison" value is now over a million dollars. Congratulations!

Heck, I'll take 1/2 the FB value for mine!
 
Well Facebook the next internet soap bubble, its worth nothing at all if privacy laws change and Facebook needs to comply they don't have any worth left in the company.
 
While I rather think FB is a crummy interface and communication venue, it is difficult to argue with something that has that many members.
I think they will try to self-destruct fairly soon, as they strive for the mandatory quarterly and annual increases in revenue and profit, and clumsily abusing members with more ads may hurt them.

IMO, FB went IPO a year to a year and a half late. But, cashing in for billions is not a bad semi-fail.
 
They have spawned a multi-billion dollar industry of "social media experts" cashing in big time.......that's gotta count for something!
 
Digital Doctor said:
The 900,000,000 isn't worth anything ?
Click to expand...

Facebook gets its income from three sources the first is ads plain and simple, second source is apps the third source is information what it has from its users. The last source is directly tied in with the first source the information of the users is being used to show ads. The third source is what makes the company so valuable user information is worth money, but here lies the catch if laws change and Facebook needs to adjust its rules because there against the law they have a problem. For example the user information may not be used for ads any more then it will get a hit.

People are to focused on what its worth just like the soap bubble crisis in 2000 and it just exploded big time this is the same thing. Information is only worth money if you can do everything with it what you like but laws prevent you from doing so. Another issue is that the total worth of the shares is around 5 times its annual income.

What people might not have read about the release of shares is the following, the expatiation was that the shares would go up in price real fast but it didn't the banks needed to jump in to get at the 38 dollars a share, shares where only 0.6% more worth at the end of the day. 0.6% is nothing that's not something people are waiting for they expected for at least 40 dollar barrier.
Zynga the one known for Farmville was suspended because the course of the shares dropped 13.6% even other shares of internet companies dropped. Internet Tech shares are soap bubbles just like last time and people should stay clear from them, but no one learned there lesson.
 
Facebook's business model makes me uncomfortable. There is no real product being sold. They just capitalize on user interaction with advertising. It's more substantive than the "concept companies" of the late 90's, but it's still pretty vacant and makes me think there is another tech bubble forming around Facebook and similar companies.
 
Thinking out loud, if I were Zuck I'd have kept the company private...or semi-private. They are not in need of vast amounts of capital, so the only reason to go public is to clean up in the $$$ sense.

He could have still earned a LOT of money, and yet kept it as a great service that did not have to squeeze the last dollar out of every member.
 
craigiri said:
Thinking out loud, if I were Zuck I'd have kept the company private...or semi-private. They are not in need of vast amounts of capital, so the only reason to go public is to clean up in the $$$ sense.

He could have still earned a LOT of money, and yet kept it as a great service that did not have to squeeze the last dollar out of every member.
Click to expand...

Selling shares is always about cash its easy if your company is wanted, its not that bad that its is about cash. But that is not the main problem the problem is when something happens to a bank because of this they get a free bailout because they know countries will not sacrifice a bank.

The problem between a LOT of money and TONS of money is key here with this you get so much money in that you can fund many projects at once but the downside is that it can go wrong. Look at some start ups they bring in lots of cash if you have a good idea you can get money in between 100k to 1.5 million.
 
I've actually thought of discontinuing our facebook

I've not has 1 member join using Facebook and it brings in zero traffic... I get more people using Twitter and Google+ than I get on Facebook. So much so that I keep forgetting to even use Facebook.
 
we_are_borg said:
What people might not have read about the release of shares is the following, the expatiation was that the shares would go up in price real fast but it didn't the banks needed to jump in to get at the 38 dollars a share, shares where only 0.6% more worth at the end of the day.
Click to expand...

Actually, the banks jumped in to prevent it from going under the 38 USD mark. The FB IPO was a majorly hyped up IPO that failed to deliver, and none of the major banks involved wanted to see their names attached to an under-performing release.

IT'll be interesting to see what will happen when the banks cease to artificially drive the price high. I fully expect the value of the shares to tank.

I agree with the earlier poster who said the IPO was too late.
 
In actually getting to a true value, you would have to strip out the effort of the investment bank in supporting the share value. I was kind of surprised there was not a first day bump in the value (boy, I bet there were some pissed of FB folks on that), but it seems there were some technical trading glitches that did not help the value in trading (probably adding to the gasoline on the fire of pissed off execs). At least the value did not tank, so maybe the valuation was close to what it should have been. All of the hit "valuation" talk though, is somewhat in a vacuum. FB seems to have bumped up against saturation. That is, I understand there are 900 million FB accounts out there (though, this probably double or triple accounts for people with multiple accounts...gasp, they do exist).

The most interesting thing I read about FB having additional value in the last week was its ability to track trends (and earlier, perhaps, than anyone else can- except maybe Google). I would guess there is a ton of value in that ability...i.e., to see the "next big thing" before it pops up on anyone else's radar screen.

Not to punk Zuckerberg, though...he made out like a bandit, even on the valuation that was actually traded on....100 Billion valuation is not a bad payday.
 
They did not get 100 Billion only around 45% (around 421 million shares) of the shares where up for sale the rest the owner still has it, so he has full say in the company.

@SchmitzIT i think the share will go up but when banks drop support it will go down and then its wait and see if it ever gets that high again.
 
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