

Four reasons why Facebook might be overvalued - arturadib
http://arturadib.blogspot.com/2011/03/four-reasons-why-facebook-might-be.html

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ojbyrne
These aren't really 4 reasons. They're 4 counterexamples supporting 1 reason -
that social networks come and go.

In my opinion, a bigger reason is market saturation. Facebook's valuation
assumes big growth will continue, but at this point in time, if you're not on
facebook, you're pretty unlikely to ever be on facebook.

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arturadib
For valuation purposes, "growth" is not necessarily tied to user base growth,
but rather profits growth.

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yannickmahe
Indeed. Google's dominance of the search engine market has in no way prevented
them from keeping to grow.

Facebook may very well diversify even more to keep its growth, and therefore
valuation.

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dot
"Clearly social graphs are fragile."

I come across this sentiment all the time and I'm thinking that maybe it's
completely wrong. Maybe it's not the social graph that is fragile, but crappy
companies. Every one of Facebook's predecessors did something wrong. Too much
downtime, bad design, corporate interests, spam, etc.

I don't see Facebook making many (big) mistakes.

~~~
TomOfTTB
I agree with your overall theory but not with your conclusion. I think
Facebook is making two big mistakes...

1\. Thinking that everyone agrees that privacy is dead

2\. Still having not found a way to allow users to separate groups in an
effective way (e.g. it's now possible to keep Mom from seeing those party pics
but it still isn't easy)

I think developers are afraid of Facebooks dominance right now and think it's
a waste of money to challenge them which is why you don't see anyone trying to
exploit those flaws. But they do exist and Facebooks seen (and largely
ignored) the backlash to prove it.

