

Facebook's Thiel Explains Failed Twitter Takeover - markbao
http://www.businessweek.com/technology/content/mar2009/tc2009031_743025.htm?campaign_id=rss_daily

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zandorg
Reading between the lines, they're not avoiding revenue solely to get/keep
more users - I think they're doing a last man standing, and waiting for all
their competitors to run out of cash and go out of business. Then they bring
on the adverts, because there's no competition by then, and nowhere to jump
to.

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briansmith
Technologically, it is very easy to start a competitor to Facebook/Twitter
(the scaling is the hard part, not the starting). So, there will always be
competition until the biggest players can somehow raise the cost of entry by a
few orders of magnitude.

Socially, I don't think it is that hard for people to migrate from
Facebook/Twitter or something else. I think a lot of people think about
competition in this area happening like a huge number of people stop using
Facebook/Twitter and start using a competitor almost simultaneously. That is
kind of what happened in the past, but only because the old social networks
had serious problems. Now, significant shifts will still happen but they will
be a lot more gradual. A lot of people are on multiple social networks already
(e.g. Facebook, Twitter, GitHub, Mixi, Linked In, Flickr). Over time, each
user's the proportion of page views on each site changes gradually but often
significantly. Facebook/Twitter might remain the site (almost) everybody has
in common, but I doubt it will continue to enjoy the huge share of users'
attention it has now.

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omouse
>the scaling is the hard part, not the starting

The scaling isn't the hard part when you have some cash to hire ex-Facebook,
ex-MySpace, ex-<insert large website here> employees.

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djahng
I think Twitter handled the issue of being bought with 80% Facebook stock very
well. After all, how does Facebook even determine their own value? They have
revenues, but not enough to justify a valuation as high as $9 billion.
Facebook probably bases that valuation on the marketability of their user
base. But how do you place a dollar amount on a number of users?

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jeroen
I think this says a lot about that $9B valuation:

 _Twitter agreed on one condition: that the Facebook stock it received be
valued at the price company shares garnered on the open market. Facebook
blinked and the deal talks ended._

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tokenadult
"Thiel won't say precisely where he values the company other than to say,
'It's worth more than people think it is.'"

I suppose that most investors desire a greater degree of specificity about a
company's valuation before investing, especially in today's market.

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tritchey
I laughed out loud when I read that quote. Facebook's valuation is ENTIRELY
based on what other people think it is worth.

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prospero
It's based entirely on what people think it is worth, given disclosure of the
relevant details. No one outside of Facebook (and, presumably, its investors)
has that information.

That being said, I don't think Facebook is being honest with themselves or
anyone else with respect to their valuation.

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JulianMorrison
Twitter would be stupid to allow their company to be bought by yesterday's men
at Facebook. FB is a fad amusement for extroverts, Twitter is a communications
medium. One is vastly more of a long term proposition than the other.

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briansmith
Unfortunately, mocking of delusional fanboyism is hard to discern from actual
delusional fanboyism.

