Facebook rattling tin in Dubai? As more and more people spend their time uploading digital narcissism to Facebook, the uber-social networking site seems to have burned through its Microsoft-juiced funding much quicker than expected. According to sources whispering in the ears of Michael Arrington, Facebook is "testing" the capital markets again - despite …
"Wonder how they will eventually make some money!"
More eyeballs! Seriously, though, that's a good question. Facebook survived the dot com bust (or popped up after it), but seems to have the same strategy overall -- "If we get lots of people using the site, we'll somehow make money."
If they're not making the cash they need off banner ads.. well.. I think they're boned. They'll have to make it all more efficient somehow or go out of business. (Not having videos and all, I don't think they have an option like youtube of putting short ads IN anything more than they already do.)
Last refuge for those who refuse to live in the real world. Oppressive place that can only exist with virtual slave labour. Last bastion of the free market economy. But if it keeps Facebook going who will complain? Certainly not the 'celebrities' that flock there to live. Yup, Dubai is the natural home for Facebook these days -- along with the hairstylists and telephone sanitisers.
Will Faceboohoo by Mark Zuckerberg be a holiday read in a year's time? I have been looking forward to a sequel to Boo Hoo by Ernst Malmsten for some years. I have to say, having learned lessons I wasn't expecting it to come.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
I can see the potential value in their database of information on people (although that probably isn't really allowed to be utilised by third parties too much), but do facebook actually have much of an income? Advertising must pull in the majority of their income, but I imagine that the amount of bandwidth they burn through means that advertising alone probably doesn't fund them - hence the large cash infusions from microsoft, dubai etx. Do these companies see themselves getting much of a return from these investments? I personally would have thought that throwing hundreds of millions of dollars at facebook would only result in almost-worthless shares in a company with no real income stream.
I guess they could start offering "facebook premium" for users who want to upload more than x photos/make x wall posts etc. Given the propensity of young people to spend lots of money on phone contracts, you would think a £2/month charge would get a lot of takers.
Facebook started in 2004, well after Dot-com 1.0, but you're right that they have the same business model, or lack thereof. (All of Dot-com 2.0 does, really, but they're leading the charge toward the cliff.) Ad revenues clearly aren't enough, and will only decline as more people use ad-blocking browser extensions. They've tried selling users' personal information, but that hasn't gone over well. Soliciting donations from users will bring in very little revenue and look desperate. Requiring paid subscriptions will drive 90% of their users back to MySpace, though I suppose that would reduce their storage and bandwidth costs.
If it costs more to accommodate a customer than the customer actually generates, do you side with: (a) the beancounters ("raise the price"), (b) the programmers/ manufacturers/ engineers ("let's build and offer a less- expensive/ resource- consuming version"), or (c) the marketing department (see above)? Pencils up, and begin.
None of the above !! 4 - revisit the entire business model/concept and see where things went wrong. If necessary, cut the losses and run. If not, find out what needs to be done to re-invent the business as a more profitable one !!
Meanwhile, suppress the tech-for-tech's-sake techies who can burn through a million an day simply to get new toys to play with; with total disregard to business needs and wants. At the same time, suppress all those marketing johnnies who will burn money up front with total disregard to the returns on spending (the bottom-line, as the Septics call it) !! Also, keep a tight leash on the bean-counters that can only see the numbers on their spreadsheets with total disregard to the greater ramifications of the business - goodwill, employee happiness and loyalty, customer satisfaction and happiness !!
Been there, seen it and bloody well done it, too !! It helps it you have a previous background as an Axeman, by appointment to some major corporations in the world !!
The last thing they need is a successful salesman as the CEO !! Don't believe me ?? Ask Steve Jobs about the CEO Apple got from Pepsi !! Damn near murdered Apple and flushed it down the pan !!
Don't know about advertising revenue, but last time I was there I got the same advert 40 times, even after having marked it as "uninteresting", "misleading" and "other->fucking infuriating". If that's their revenue stream they're going to need some seriously deep pockets.
And all for WHAT exactly? If a business can't make money, why on earth is it still here?
As far as business models are concerned, free hosting is one that has not yet received any sort of viable solution. I expect FaceBook to die a lingering death, hopefully followed shortly thereafter by MySpace, at which point the teeming masses of morons who want to "publish" their lame and idiotic rants will have to pony up and pay themselves their own website, meaning they will finally shut up.
On that blessed day, millions upon millions of inane babbling and pointless non-discussion threads will all cry out and be silenced, and the Internet will return to being what it was meant to be - the place to read things written by people who actually have something to say and are willing to put their money where their mouth is.
And, as a side benefit, we just might get things to read that are actually written correctly.
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