

Facebook revenue to be billions in 5 years: board member - vincentchan
http://www.reuters.com/article/ousiv/idUSTRE56531X20090706

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pj
Wow, talk about forward looking statements. When companies start making
comments like this, it's evidence of a loss of rationality. If MySpace had
said this 4 years ago, they would have gotten press too and everyone would
have believed it and it _could_ have been possible.

But seriously folks, look around. The unpredictability of the internet is just
too high to be making statements like this, I don't care how much evidence you
have.

 _Andreessen told Reuters that the world's most popular online social network
could pile up $1 billion in revenue this year if it pushed harder on selling
advertising._

Seriously? Like how much harder? Putting more ads on the site? Charging more
for them?

This is bubble talk if ever I heard it. He wants to get press for his new
investment fund. He has to say big things so that people talk and want to give
him money and want him to invest in their companies. So transparent.

They say: _[Twitter] needs to focus on increasing its number of users and
improve the features it offers so that no rival can swoop in._

Oh boy. Really? So no rival can swoop in? The more Twitter develops its
features, the easier it is for a rival to swoop in. Just copy them. It really
isn't that hard. Facebook could copy them. Google could copy them. Lots of
people think Wave is a more advanced twitter already.

And then he says this: _MySpace focused too much on selling advertisements_

Isn't that exactly how he said Facebook could be making billions? So really
what he is saying is, "If facebook sold more ads, they'd make more money, but
then they'd lose their users, so they wouldn't make money, so really, facebook
can't make much more money."

Read between the lines and you'll see that the whole scheme is faulty.

~~~
wmeredith
This. Anyone who is predicting _specifics_ about the internet 5 years from now
is selling something. This guys predictions are hedged-bet sensationalist
double-speak. Boo.

~~~
vaksel
precisely, facebook just turned 5 years old a few months ago

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jacquesm
Well, I'll bet Marc Andreesen $100 that facebook will _not_ make multiple
billions of dollars in 5 years.

2008: $210 million, 2009: $230 million. Extrapolating wildly maybe 600
million, but they'd have to _double_ their revenue increase for that to work
(10% / annum to 20% per annum). I fail to see what magic they're going to pull
in order to make that happen.

Also, revenue definitely isn't profit, look at youtube.

~~~
gojomo
I'll take that action. To be specific, I will bet $100 that Facebook's annual
revenue will reach $2 billion/year by 2014. Do we have a bet?

~~~
timbowen
This doesn't seem like an outlandish bet to me. It seems to me that Facebook
has, up to this point, spent much more time and energy on their core product
rather than improving advertisements. Six months ago the ads were totally
worthless, now I notice they are beginning to tailor their ads to my interests
and my group of friends. If they continue optimizing the ads those revenues
should increase.

There is also a virtually untapped market on Facebook for virtual objects. The
gift system does exist, but I feel needs improvement. Social networking sites
in Asia make the bulk of their money off of this feature, not ads. If FB beefs
up this aspect of their business I think 2 billion by 2014 is a reasonable
goal.

All that being said, the sentiment that "he is selling something" seems
reasonable. They could be ramping up for an IPO or, more likely, going for
another round of private investments to fuel growth.

~~~
jacquesm
I'm not too scared. Google made 21 billion over the whole of 2008 on
advertising, both on their own site and in the 'channel'.

To be taken with a grain of salt:

<http://alexa.com/siteinfo/facebook.com+google.com>

So, at a daily reach of 2/3rd of googles they have managed to score about 10%
of googles income.

I don't see facebook getting several times the size of google and I don't see
how they could possibly get close to the clickrates / cpms that google is
getting for their traffic.

It doesn't get much more targeted than search traffic, facebooks citizens
revolt whenever the company tries to pull in a direction where they can
monetize the traffic better.

'Facebooks' come and go, geocities, myspace and so on...

To my feeling they're already over their top, but then again I could be
mistaken, which will cost $100 :)

For FB to make that 2 billion (that's a lot of dough) on their users they'd
have to become roughly 10 times their current size at the same conversion
rates, so they'd have to have a reach of 200%, which is impossible.

I think they'll top out somewhere in the 600 to 800 million range and then
they'll either stay there or they'll be upstaged by someone with a better
idea.

~~~
zimbabwe
I wouldn't bet either way, but remember that profit isn't a linear
progression. Right now, Facebook's not making much money per user. If they
figure out a way to convince its _average_ user to pay for something, suddenly
they'll be in for a shitload of cash.

I dunno if they'll find something like that, but it's not something to be
instantly ruled out.

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dejan
I somehow believe according to personal value of Facebook (read none) that
it's aiming for its peak. It is a time waster in the time where constructivism
is a necessity to overcome all present issues. Just take a look at the feeds,
it seems to me that it is social gossiping and social gaming rather than
anything to do with friends. As (an older) student, I can see the trend that
most students are falling in the already mentioned time wasting. Those that
graduated though, I don't even see them on Facebook, they are busy doing
something, working, building and using their time with physical friends and
family.

Facebook's crowd will always be difficult to monetize. I am already pissed of
by the banners I see around (never ever clicked one), so the only reason I go
there is to notify people of something from time to time. It really has taken
the functionality of an Address book, and hell it is annoying climbing up that
www for a small piece of information. The board of Facebook says that if they
placed more ads they could start earning a lot. I say if they do that, I am a
goner same moment. Same if they try to sell me something.

Valuing Facebook in 5 years? Ridiculous. I doubt it will even exist in 5 years
in the form of today. I see a major shift in computing coming up in the next
few years, and Facebook and Google and all those disconnected clusters of
multiple identities merged.

Value of Facebook currently is (-) minus all the money they've spent. I doubt
they will ever compensate for that. Investing in Facebook though is a good
scheme to launder money.

I also see the next bubble. Overestimation and over-expectations of "startups"
and websites that will never create value. I see a clear shift to desktop
computing again away from the ill-responsive web.

~~~
tokenadult
_Facebook's crowd will always be difficult to monetize._

I have ad-blocking turned on on all websites, by default, so I don't get a
good sense of what advertises on Facebook unless I happen to see someone
else's Facebook feed (as, for example, a family member's) on a computer
without ad blocking turned on. It all looks like schlock.

What I have seen on my own home page feed on Facebook is a small number of
some of my more remote Facebook friends who go absolutely NUTS over the
Facebook quiz applications. I enjoy posting links via the Facebook link
application to webpages on the marketing tricks and security holes embedded in
Facebook quizzes. (Many thanks to HN readers who post some of those links here
on HN.) I'm trying to use positive peer pressure in my circle of Facebook
friends to make it uncool to respond to Facebook quizzes at all, and I'm
gratified to see that several of my friends immediately put all my new links
about the perils of Facebook quizzes up on their personal Facebook feeds.

So I think this is the problem: sophisticated users will not only not fall for
the schlock on Facebook, they will try to educate their friends about the
schlock. I don't know if Facebook has a revenue model that overcomes the cost
of serving up lots of pretty pictures and videos to unsophisticated users. (I
don't think Facebook is anywhere near as technically savvy about reducing
bandwidth or running server farms as Google, but I could be mistaken.) It may
be that a lot of the users who have the highest-quality conversations to share
will jump ship and find yet another online community--that has happened many
times since the 1990s, and I always follow the flight to quality.

And, yes, I agree that sometimes Facebook has appallingly poor response time.
That might get a lot worse as the user base expands.

~~~
zimbabwe
I think you're right that over time, pressure will stop people from publishing
quizzes publicly. In my own sphere I've seen almost none in the past two
weeks. It's like how "tag-other-people" notes got old half a year ago.

I agree with all the stuff you said, good points all, but I don't know if I
agree about Facebook's serverfarmrunning-bandwidthreduction. They offer a lot
of services to their millions of users and they're rarely down. I don't know
how to compare them outside of that, but I doubt they're at all poor at this.

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dpcan
They'll have a serious growth problem with the number of 30+ aged folks
jumping on the site right now. In 5 years, when the 8 year olds of the world
turn 13 and start looking for social networks to join - I have a feeling they
aren't going to use the one old mom and dad are using. They better start now
focusing on us older folks so we keep spurring growth.

~~~
dan_the_welder
My personal path has been Friendster, MySpace, Facebook. I am already seeing
the end of Facebook. Perhaps I need to go Ning?

~~~
dan_the_welder
I'm just saying, that I use and like social networking. I only moved to
Facebook because of the 'social pressure" of people leaving MySpace. Exactly
like I left Friendster for Myspace.

That said, I look at with a combination of nostalgia and pity. I miss aspects
of it, and I pity their loss of self as they attempt to become MySpacebook.

MySpace wants to be Facebook, Facebook wants to be Twitter and what I want is
a foggily undefined thing that is none of the above.

I see the end of Facebook, veteran that I am of three generations of social
networking.

Just saying.

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david927
Facebook revenue to be 0 billion in 5 years: me

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bruin4tw
marc has a talent for selling companies for a lot of money that tank after
being purchased. Facebook is no different.

