

Will Facebook become one of the most profitable companies in the world?  - Thomas_Kincaid
http://namesake.com/conversation/9b3fe6d6-54ae-11e0-ae74-12313f014066

======
olivercameron
I highly doubt they can get near the top 10. They'd first have to battle their
way past the heavy weight technology companies, then the banking giants, then
Wal-Mart and finally the the ridiculously lucrative oil companies (source:
[http://money.cnn.com/magazines/fortune/global500/2010/perfor...](http://money.cnn.com/magazines/fortune/global500/2010/performers/companies/profits)).

They have to figure out how to monetize a lot more $ per user to be very
profitable in the long term.

------
faragon
Shorm-term, may be. Mid-term, may be. Long-term, I hope not.

------
scottieh
Yes -- when a single organization owns the connections, interests and
geographical data of 600 million people -- it's inevitable.

No other entity has amassed this amount of data before.

~~~
olivercameron
Why is it inevitable? They already run an ad network and their revenue's are
nowhere near, for example, Google's. How else can they monetize this data?

~~~
scottieh
They've barely scratched the surface. And it's not just an ad network...

\- virtual currency \- daily deals \- search integrated directly into the
experience

and that's just off the top of my head

~~~
olivercameron
Even with those three products, I still find it hard to believe they'd be one
of the most profitable companies in the world. If you look at the top 50, it's
filled with mainly oil companies, banks, and hardware producers (Microsoft
being an exception). Google crept in at 47 due to AdSense, which I think
Facebook could overtake.

I'm not saying Facebook cannot be wildly profitable, I just don't think it'll
come close to the top 10 (what I'd consider to be "the most profitable
companies in the world").

------
gnaritas
No.

------
Ainab
It is unlikely they will ever get close to energy (oil) companies. and by the
way they need to IPO so that we can know what their revenue and expenses are.

------
marcamillion
One of the most profitable, perhaps...but I predict that if Dropbox stays
independent - it will easily become the most profitable.

~~~
noelchurchill
Dropbox adds little value to my life. Unless the company or technology evolves
in ways I can't foresee, I would never pay for it.

Predicting it will be the most profitable company in the world sounds absurd
to me. But that's just me.

~~~
sorbus
Dropbox is a killer application if you have multiple computers or don't want
to care about keeping backups. It's completely removed my need for flash
drives, caring about which computer I have documents on, and so forth. I
wouldn't underestimate that; I recall hearing that they've hit $100M/year in
profits[1], and I expect that they've got quite a ways to grow. However,
saying that they'll be the most profitable company in the world doesn't make
sense to me - that would just take too much growth to be realistic.

For some context, the most profitable company in the world in 2010 was
Gazprom[1], the largest exporter of natural gas in the world, with 24,555.7
million.

EDIT: Gazprom was the most profitable in 2009, not 2010, as pointed out below.

[1] <http://www.businessinsider.com/dropbox-revenue-2011-3>

[2]
[http://money.cnn.com/magazines/fortune/global500/2010/perfor...](http://money.cnn.com/magazines/fortune/global500/2010/performers/companies/profits/)

~~~
marcamillion
This is not something that will happen over night. You meant to say that
Gazprom was the most profitable in 2009.

Exxon did $30B profit in 2010. -
[http://www.google.com/finance?q=NYSE:XOM&fstype=ii](http://www.google.com/finance?q=NYSE:XOM&fstype=ii)

Exxon did $30B profit on $375B revenues. Net profit margins of less than 10%.

Of course we won't know until Dropbox releases their financials, but I
strongly believe that they will be a bombshell when they are released. Nothing
like anything we have ever witnessed.

I would not be surprised if their Net Profit margins are 30% - 50%.

At those rates, all it takes is for them to be doing revenues of $100B to
exceed Exxon's profit take in 2010.

I know it seems a bit far fetched now, but so did every other technology giant
when they were in the budding phases.

I think it would be foolhardy to bet against them.

~~~
sorbus
Hmm. There are about 2 billion internet users, and Dropbox's cheapest paying
plan is $99/year. Assuming 50% profit or so, and that no one buys the more
expensive plan, it would take a billion paying customers to hit $100B/year,
50% of everyone with internet access. It would definitely be a gradual
progression, but probably doable, especially if they branch out into other
areas - though I can't think of anything obvious, other than licensing the
technology to big businesses for internal stuff. Of course, they can certainly
afford to experiment.

~~~
marcamillion
Well there are 2 billion internet users - i.e. individuals. But each
individual has multiple functions.

E.g. I have a dropbox account at home, and had one for work. So did my boss,
and some other coworkers.

So while there are 2 billion internet users, there are many organiztions -
profit, non-profit, ngo, etc - which makes the pie even bigger.

------
mviamari
if their ARPU has as much potential for growth as mentioned in the first
comment of the conversation, they could easily surpass Google.

