
Facebook Hemorrhaging Cash, Runs To Dubai For Money - jmorin007
http://www.alleyinsider.com/2008/10/facebook-hemorraging-cash-runs-to-dubai-for-money
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bigthboy
I've never really understood Facebook from the business side at all. I
generally like the service they offer (generally, though it is really lacking
interesting and helpful aspects) but I've never understood their thinking on
business moves. They've got a very popular software platform, one of the most
visited sites in the world and rising, and some how 700 people can't figure
out how to make a buck.

I agree with most of the other people here... Zuckerberg promises a business
plan in 3 years? What the hell? I can see having your product and company out
there and be selling things or providing a service and not necessary have the
business plan down and taking some time to find one that really does work
well, but when you have 700 people, corporate offices, and a widely popular
product/service, a business plan seems to me to be something you put at the
front of the line. Not: "hmm, we'll get to it later, lets just enjoy the
fame!"

Most of what goes on at Facebook could be ran by 70 really good people. That's
not including investors/shareholders at all. That's 70 people that are just in
charge, server/network managers, system engineers, accounting (do they need
one?), and marketing. It appears Facebook got the idea that it needed to have
its own in-house Microsoft Research or something.

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ErrantX
If they can cut jobs rather than raise (too much) more money then they
probably should.

Spewing money that fast is BAD all round (and no amount of shoring investment
will help long term). Either they need 2 or 3 years capital or they need it
fixed now...

Cut hard and deep now, refocus, reassess and build on current revenue streams.

But they wont....

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river_styx
I realize that Facebook gets enormous amounts of traffic, and so requires the
resources for scaling/high availability and all that. But how in the world
have they gone through most of $500 million? What the hell are they doing over
there?

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maryrosecook
They do have ~700 employees (<http://www.crunchbase.com/company/facebook>)...

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river_styx
That's sort of what I'm getting at. Why do they need so many resources? I
mean, looking at the software and its requirements, I don't see the necessity.

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tom_rath
My guess is they're a victim of cargo cult thinking: Hugely successful
companies have lots of employees and spiffy offices, right?

~~~
staunch
Yeah. And Google has done the exact same thing. They're just fortunate that
their business model is so much better that it can support their massively
inflated head count. At least with Google it kind of makes sense in an evil
way: hire every programmer who could be a serious competitor.

~~~
run4yourlives
Difference being that Google recognizes that one of their strongest growth
areas is capitalizing on innovative ideas. Gmail, Apps, Gtalk, Chrome... all
innovations that build the company.

I'm not sure what facebook has done, or whether this should really be what the
focus on, to be honest.

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webwright
As impressive as Facebook is, I truly think it is ridiculous that they have
~800 employees. How many does Craigslist have? Wikipedia? Granted, FB needs a
few more to manage ad sales/delivery, but... 800?

~~~
henning
That's one of the advantages of simplicity: far lower overhead.

craigslist is very simple, so they have something like 23 employees.

~~~
wensing
25 according to CrunchBase.

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vaksel
why is it taking these guys so long to come up with a business plan? Why is
Zuckerberg promising one in 3 years, and not coming up with one now. Hell they
have 700 people, not one of them can figure out how to monetize 1 of the most
visited sites in the world?

~~~
byrneseyeview
I think what they're doing is daring, but it makes sense. Creating a business
plan narrows the companies options; as long as they don't have one, they're
flexible enough to bring in new users (and keep old users coming back), which
could open up more possibilities.

If Zuck had monetized when Facebook was at Harvard, Facebook would have been
cash-flow positive. And he would have graduated with a few thousand dollars
extra in the bank, rather than dropping out and ending up with a billion-
something net worth.

~~~
timr
_Paper_ net worth.

~~~
byrneseyeview
The kind represented by stock certificates, as opposed to the kind represented
by green pieces of...

~~~
timr
Indeed. The same kind of net worth represented by Pokemon cards, Beanie
Babies, and my vintage Flooz collection.*

(*I don't actually have any Flooz. Oh, but if it were so....)

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Dilpil
Can facebook possibly make as much money as has been invested in them?

~~~
dmix
Sorry for stating the obvious, but they generally have to show that they can
make the money back (about 10x) to investors before taking the money... its
much harder to comment on whether they can or not when your not involved with
the company.

~~~
run4yourlives
That type of thinking led to the first dot-bomb, the housing boom/bust, and
hell, even the depression.

Lot's of people do very stupid things.

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ksvs
Rather a spun title.

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run4yourlives
Hear that? It's the ghost of .com past sneaking up on you... timing might be
right too. :-)

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callmeed
Apparently Zuckerberg didn't read the Sequoia meeting notes ...

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jmtulloss
Or he did, which is why he's trying to raise money now.

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aswanson
They need to hire Paul Bucheit. Hell, he came up with adwords for google, he
can do it again.

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known
Someone please tell me what is Facebook's USP?

