

Facebook sandbagging revenue; 2011 really $12B, not $4B - jasonmcalacanis
http://launch.is/blog/l016-facebook-sandbagging-2011-revs-really-12b-not-4b.html
please Fisk the analysis below.
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CoffeeDregs
I found the suggestions spot-on and highly conventional for a typical web
property and I suspect that FB is already working on some of those...

But I also found the suggestions to kind of miss the point of FB (and I'm not
an avid FBer). FB has found or is trying to find the right balance of
engagement and advertising (cue the digerati: privacy! privacy! privacy! cue
the interconsumers: meh...). The article kind of suggests that the balance is
both obvious and easy to strike, but, having friends in management at FB, I've
heard that it's nothing like that easy. It's easy to look around the web, find
big properties/segments (e.g. AdSense, YouTube, news) and then paint on an FB
layer; it's quite a bit harder to do so at massive scale without pissing off
or freaking out the consumer market and other web properties.

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Travis
This resonates with me. I don't think you could successfully put banner video
ads on Facebook's main page without a _serious_ backlash.

It makes sense -- on facebook, the user is providing the content. Facebook
just organizes and connects it. With most other sites, they are producing
content. People will sell their attention to access content produced
professionally. I don't think they'll do that for content that is user
generated (and so clearly user generated).

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Vitaly
What a load of crap.... They don't earn as much as they do because they don't
spam every possible place with additional advertising and not competing
directly with groupon, youtube, foursquare and google, duh!

Just to 'replicate' a basic functionality of the sites above it would take
them lots of time and effort and really not guaranteed to become anything
interesting.

And adding way more adds? Really? Well, I suppose they could get away with it
for a while, but I'm sure it would kill lots of other important metrics, like
user engagement etc. Which I suppose are not less critical for FB then just
the bottom line.

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cletus
Not monetizing to their potential? Sure, I'll buy that.

Underplaying it to the tune of $8B+ per year? Yeah, no sale.

If FB was really making that much money, why would they still be raising
venture rounds (eg the Goldman investment)? If it was so the founder and early
investors could take money off the table, why would they be undervaluing the
sale? It would either be not smart for the founders or arguably
misrepresentation to the investors.

I maintain my view that FB is still in the hype phase. Pricing will come back
to earth at some point, which isn't to say it's not an $XX billion company but
the $2B+ they've raised does raise questions about their actual and potential
revenue.

Remember that Google raised $20-25M and that was it, as just one data point
(but a common point of comparison).

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orijing
I think most of the $2B (1.5B in fact) is a "liquidity" opportunity for
employees with significant amount of stock. In that light, Goldman's clients
are getting a good deal (and obviously Goldman) and so are the employees
selling the stock.

Now, you may wonder why someone would sell a stock they are highly confident
will appreciate? When you have $60m, but all of that tied in Facebook stock,
you would rather forgo the opportunity to gain another $10m in order to sell a
quarter ($15m) now, just so you have some cash to buy a house, a nice car, or
whatever you want. At that level of wealth, the incremental benefits of
additional money is greatly outweighed by the benefits to diversification and
liquidity.

I know that if I had $60m in Facebook stock, even if I believe each share are
likely to be worth $40 in two years, I'd be willing to sell a quarter for $25
apiece just so I have a ton of cash at the moment.

So while it's true that it's strange that Facebook is selling so many shares
to Goldman, it's less strange if you consider that FB is staying private much
longer than Google, and thus has many employees whose wealth is still largely
tied to a private, non-liquid stock.

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nikcub
how can they be sandbagging if they have never published revenues

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sawyer
Sounds like Launch wants FB to end the party at 11.

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mrjain
fbvideo.com? really?

