Rumor: Facebook to go public in Q1 2012

Steve Williams

Site Founder, Site Owner, Administrator
Summary: Facebook is expected to go public next year, and some are saying it will be as soon as Q1, at a valuation north of $100 billion.

Facebook may go public as soon as the first quarter of 2012. The valuation could be pegged at north of $100 billion, according to people familiar with the matter cited by CNBC.

Last month was the first time we heard that Facebook’s business was growing faster than previously forecasted and the company’s profits were increasing quickly enough to make a valuation of $100 billion justifiable. So the $100 billion number isn’t new, but the Q1 2012 timeframe certainly is.


http://www.zdnet.com/blog/facebook/rumor-facebook-to-go-public-in-q1-2012/1593
 

Phelonious Ponk

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Jul 1, 2010
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How does Facebook make money? I'm a user. It's free. And I'd bet that a huge chunck of it's audience would disappear immediately if they started charging for the service. I don't see any evidence of a robust advertising revenue stream. Where is the money?

Tim
 

ack

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Facebook is a drug. It probably doesn't make money now, but I am sure they are hoping for at least the following:

  1. Being a drug, they can easily charge membership fees, even if it's just pennies. However, the fear here is that people will flock to other competing sites; but then again, nothing has been able to match Facebook's success. It's the reason LinkedIn isn't charging us yet for basic service
  2. Like LinkedIn, Facebook can charge for premium services - whatever they scheme up; for example:
    1. Storage of more photos
    2. Storage of hi rez photos
    3. Partnerships with skype et al and offering through-Facebook phone calls
    4. Youtube-type service
    5. More and better games
  3. Facebook is poised to mine all these Likes and Dislikes, and target you with ads, products, et al - huge revenue potential
In the end, Facebook is yet another "freemium" site, and the key again to all of them is to make it a "drug", then you milk it.

Networking, as a service, will succeed. Whether this means Facebook will succeed or not really depends on the competition it will face and its overall strategy. This extends beyond networking sites - just take a look at the cloud explosion... make it easy to use, prove it saves people money and time, and they will flock
 

Phelonious Ponk

New Member
Jul 1, 2010
8,677
5
0
Facebook is a drug. It probably doesn't make money now, but I am sure they are hoping for at least the following:

  1. Being a drug, they can easily charge membership fees, even if it's just pennies. However, the fear here is that people will flock to other competing sites; but then again, nothing has been able to match Facebook's success. It's the reason LinkedIn isn't charging us yet for basic service
  2. Like LinkedIn, Facebook can charge for premium services - whatever they scheme up; for example:
    1. Storage of more photos
    2. Storage of hi rez photos
    3. Partnerships with skype et al and offering through-Facebook phone calls
    4. Youtube-type service
    5. More and better games
  3. Facebook is poised to mine all these Likes and Dislikes, and target you with ads, products, et al - huge revenue potential
In the end, Facebook is yet another "freemium" site, and the key again to all of them is to make it a "drug", then you milk it.

Networking, as a service, will succeed. Whether this means Facebook will succeed or not really depends on the competition it will face and its overall strategy. This extends beyond networking sites - just take a look at the cloud explosion... make it easy to use, prove it saves people money and time, and they will flock

A nice vision. A possibility. Though I also think there's a pretty strong possibility that it will lose 2/3s of its audience the minute it starts charging for the service. But none of that is the current point, which is going public at a value north of $100 million. What is the source of that worth if no one is paying for the drug?

Tim
 

ack

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May 6, 2010
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#3 will be the main source of revenue (hence value; not I am justifying whatever claims they make). Expect to see targeted ads on the screen every time you search for or Like something - the vendors will pay for those. Expect ads like "Your friend Cashola likes Muy Espensivo Winery - Try their wines yourself and save 10% if you order in the next 30 mins". "Your friend BeemEr drives a BMW - Test drive one today at El Cheapo Carrosserie, just 5 miles from you"

Have you noticed that, if you forget to log out of Facebook, how certain web pages are custom-made for you? Try it out on money.cnn.com for example - it's called cookie-based tracking; they know where you go, what you click, and will mine that data even more. The partnerships they have with such web sites is already a revenue generator.

Google is rightly scared and wants to get into this business as well - there is real value in presenting you with unsolicited search results as you visit various sites...
 

mep

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Apr 21, 2010
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My wife plays Farmville via Facebook and I can tell you that Farmville is making tons of cash. People spend real money to buy junk for their stupid farms. I know that for a fact. I don't know what Facebook's cut is, but I have no doubt that Farmville is raking in cash.
 

ack

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It's a game with farmers
 

Steve Williams

Site Founder, Site Owner, Administrator
I must say that even though I have a Facebook account i have never really gotten involved there. Too much time needed and not enough in any one day
 

mep

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Apr 21, 2010
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You don't want to know Steve, my sister stays there 4hrs average....it is addictive!

This game is very addicting as I can testify to. My wife is a confirmed addict. My wife gets up at the crack of dawn to tend to her farms (they are up to 3 farms per person now) and comes home from work and pretty much parks there for the rest of the night.

I might be the last guy standing that doesn't have a Facebook account.
 

mep

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Apr 21, 2010
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I guess WBF is my Facebook.
 

ack

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May 6, 2010
6,784
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Boston, MA
On Facebook's revenues:

U.S. virtual goods revenue on Facebook is expected to grow 32 percent in 2012 to $1.65 billion, according to a new report by Inside Network. That growth rate is lower than the 40 percent growth for 2011, as the market analyst firm predicts that revenue this year is growing from $800 million in to 2010 to $1.25 billion by the end of 2011. While that is rapid growth, it shows that the fast-growing virtual goods and social gaming industries that use it are maturing and slowing down.
Justin Smith, founder of Inside Network, said in an interview that the numbers reflect a slowdown in the torrid growth for virtual goods, which next to ads are a major source of business on social networks such as Facebook. On Facebook, most apps are free-to-play, where users play for free and pay real money for virtual goods such as custom decorations.


Anyone want to argue again that charging later on for memberhip, even if it's pennies, will cause Facebook to lose customers?:rolleyes:
 

Gregadd

WBF Founding Member
Apr 20, 2010
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A nice vision. A possibility. Though I also think there's a pretty strong possibility that it will lose 2/3s of its audience the minute it starts charging for the service. But none of that is the current point, which is going public at a value north of $100 million. What is the source of that worth if no one is paying for the drug?

Tim

Tim I think Steve said North of 100 billion!

I finally signed on to Facebook to keep track of my family. Can you say TMI?
 

Phelonious Ponk

New Member
Jul 1, 2010
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On Facebook's revenues:

U.S. virtual goods revenue on Facebook is expected to grow 32 percent in 2012 to $1.65 billion, according to a new report by Inside Network. That growth rate is lower than the 40 percent growth for 2011, as the market analyst firm predicts that revenue this year is growing from $800 million in to 2010 to $1.25 billion by the end of 2011. While that is rapid growth, it shows that the fast-growing virtual goods and social gaming industries that use it are maturing and slowing down.
Justin Smith, founder of Inside Network, said in an interview that the numbers reflect a slowdown in the torrid growth for virtual goods, which next to ads are a major source of business on social networks such as Facebook. On Facebook, most apps are free-to-play, where users play for free and pay real money for virtual goods such as custom decorations.


Anyone want to argue again that charging later on for memberhip, even if it's pennies, will cause Facebook to lose customers?:rolleyes:

No, I don't think I'll ever make that statement again. I had no idea. I'm a daily user. Have my own page, a page for the band. I keep up with my daughter in Texas and friends around the country through FaceBook, but I've never played the games. Well, that's not technically true. I got invitations from some people to play and tried it but....it just seemed really lame. I obviously never got the hang of it because I can't imagine spending four hours on any of that stuff and being awake.

Tim
 

ack

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Selling virtual goods, for crying out loud. I'll never complain about $35 LPs anymore!
 

mep

Member Sponsor & WBF Founding Member
Apr 21, 2010
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Selling virtual goods, for crying out loud. I'll never complain about $35 LPs anymore!

That's the part that gets me. I have no problem with spending money, but I want something that I can touch as a result of my purchase. I have spent lots of money over the years on this crazy hobby, but when it's time to move on to something else, I have something to sell. My wife has spent at least several thousand dollars on Farmville and all of her *purchases* are virtual crap that only exists on Farmville servers. It does make her happy though and helps relieve her stress from her job so that is worth something.
 

ack

VIP/Donor & WBF Founding Member
May 6, 2010
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Update on Facebook's cookie tracking I mentioned earlier - you ain't gonna like this:

Entrepreneur and hacker Nik Cubrilovic reports that Facebook can still track the web pages you visit, even when you are logged out of Facebook.
According to Cubrilovic’s tests, Facebook merely alters its tracking cookies when you log out, rather than deleting them. Your account information and other unique identifiable tokens are still present in these cookies, which means that any time you visit a web page with a Facebook button or widget, your browser is still sending personally identifiable information back to Facebook.
“With my browser logged out of Facebook, whenever I visit any page with a Facebook like button, or share button, or any other widget, the information, including my account ID, is still being sent to Facebook,” Cubrilovic wrote.
“They definitely have the information stored,” Cubrilovic told VentureBeat in a Skype interview today. “As to what they do with it, you can only speculate.”
Facebook engineer Arturo Bejar said (in the comments on this post) that Facebook uses the data from logged-out cookies only to prevent spamming, phishing and other security risks.
“Also please know that also when you’re logged in (or out) we don’t use our cookies to track you on social plugins to target ads or sell your information to third parties,” Bejar said.
Cubrilovic’s claims are based on his analysis of HTTP headers sent by browsers to Facebook.com. He says the tests are repeatable by anyone with a browser that has development tools installed.
If correct, this could be a potentially serious violation of privacy. Some people are already alarmed that Facebook’s new “open graph” apps can report what you are reading or listening to in real time, adding the media you consume to your profile as an update without you clicking a “like” button.
It’s not clear how Facebook’s 800 million reported users will react to this revelation. “Facebook trains you to undervalue your privacy,” said author and BoingBoing editor Cory Doctorow earlier this week at the Strata Summit in New York, and many of the site’s users have shown no hesitation at all to continue using the site despite its complicated and constantly-changing privacy settings.
On the other hand, consumer reaction to Facebook’s Beacon feature several years ago forced the company to significantly revamp its approach. Beacon was similar to this year’s open graph in that it shared information about what you were doing online without you having to take explicit actions, like clicking on a button. Eventually Facebook changed the way this worked, so nothing was shared without your explicit permission.
To block Facebook from following you, you need to delete all Facebook-related cookies after logging out. You may also be able to use AdBlock Plus to block Facebook, with the following rules, as reported on Hacker News:
facebook.com^$domain=~facebook.com ~facebook.net|~fbcdn.com|~fbcdn.net
facebook.net^$domain=~facebook.com|~facebook.net|~fbcdn.com|~fbcdn.net
fbcdn.com^$domain=~facebook.com|~facebook.net|~fbcdn.com|~fbcdn.net
fbcdn.net^$domain=~facebook.com|~facebook.net|~fbcdn.com|~fbcdn.net

Note: we haven’t tested these rules for efficacy yet.
 

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