Facebook IPO thread (1 Viewer)

[optionmaven]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

This is a losing strategy.

Dude has more money laying around than me. Good lord.

Better yet toad, why don't you capitulate your holdings, short this dog across the board, and then rebuy at around 20. I would find other things to invest in. Wheat pennies, the bridge in brooklyn, perhaps that clock building in london, hurricane insurance for my house in Wisconsin.....etc.

 

[toadstool]

1) you've pumped over 100G's into this thing? I'd like to subscribe to your blog.... you have a lot more money than i do, how old are you?

No I only have put 71.25k in, at this moment the value is at 67.74 (-3.51k), I am in my mid 30s.

2) why do you have such faith? even if the company is good, don't you think they filed at such a mature point in their development process that possibly they are near peak already, if not already peaked?

Partly my outlook comes from being in the advertising world and seeing where clients want us to put add space and mimic. The trend for the typical client is once they accept a new medium for ad they take a long time to move away form it. This will keep fb a player for sometime. Thus while I may lose up to 20k, th eupside is much much greater then that.While I could argue that I don't think they are at peak yet, I don't think that matters for the 1-3 year investment. They have gotten ahold of the hardest group of people to get ahold of and the easiest to hold on to. Sure the 20 somethings may leave soon, but they are a fickle bunch when it comes to tech. They are an important demo, huge money can be made off the rest.

seems like they came public about 3 years too late for the general public to make any money off it... perfect time for facebook's long time employees though.

I think the IPOed about a year or 2 late to get the first day run, but I don't think that changes the mid to long term (1-3 year) buyers.

 

[FavreCo]

I am curious if you people think that Facebook is a long term loser...

I do.

Absolutely. This POS will go the way of those before it. AOL-like is what it will become. That is best case. Once the lemmings move on, there is no recovery.

 

[toadstool]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

How did you get 1000 retail shares?

Morgan Stanley

 

[Dr. No]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

 

[culdeus]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

How did you get 1000 retail shares?

Morgan Stanley

I wouldn't think they would just pass out 1k shares to any old spare. I once tried to get on an IPO with Merrill of a tiny oil services co. that ML had the offer on and they were like, um. you need about 20MM to play in IPO space. kthksbye

 

[FavreCo]

Wait until the shorts get a hold of this bloated pig.

 

[Rick James]

Is FavreCo's last name Winklevoss?

 

[Premier]

I am curious if you people think that Facebook is a long term loser...

I do.

Absolutely. This POS will go the way of those before it. AOL-like is what it will become. That is best case. Once the lemmings move on, there is no recovery.

Lemmings

 

[toadstool]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

How did you get 1000 retail shares?

Morgan Stanley

I wouldn't think they would just pass out 1k shares to any old spare. I once tried to get on an IPO with Merrill of a tiny oil services co. that ML had the offer on and they were like, um. you need about 20MM to play in IPO space. kthksbye

To be fair I am not 100% sure. Could be length of account, size of account, or the fact I sitll hold more than 60% of the stocks I have purchased in IPOs.

 

[toadstool]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

 

[culdeus]

Looks like it's taking a breather at 34, or are we in a greenshoe event again?

 

[Dr. No]

Is FavreCo's last name Winklevoss?

why would a Winklevoss want to see their shares go down in price and lose money?Those guys are winners in this whole thing... they got paid, they have shares, they got some fame, and they don't have to lift a finger for the rest of their life unless they want to.I want to be a Winklevoss twin

 

[FavreCo]

Is FavreCo's last name Winklevoss?

WTF is a winklevoss?

 

[Dr. No]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

 

[eoMMan]

Is FavreCo's last name Winklevoss?

First name is Tom.....from MySpace.

 

[culdeus]

I'm starting to think the Nasdaq is looking like the big loser here. Or at least computers. These huge allocations are tearing up the entire exchange. lols. Lets go back to hand signals.

 

[FavreCo]

Is FavreCo's last name Winklevoss?

First name is Tom.....from MySpace.

I'm probalby enjoying this disaster even more. This POS would have been over priced at 12.2.74 BILLION shares outstanding.

 

[mozzy84]

 

[chet]

This deal was overpriced by Morgan Stanley probably because of pressure from Zuckerburg. It happens all the time but is a lot more visible because of the size and scope of this deal.

 

[VA703]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

How did you get 1000 retail shares?

 

[Slapdash]

This deal was overpriced by Morgan Stanley probably because of pressure from Zuckerburg. It happens all the time but is a lot more visible because of the size and scope of this deal.

Why did Zuckerberg want the IPO priced so highly?

 

[Sarnoff]

Is FavreCo's last name Winklevoss?

First name is Tom.....from MySpace.

I'm probalby enjoying this disaster even more. This POS would have been over priced at 12.2.74 BILLION shares outstanding.

$38 stock price came out to 10 cents per user. I honestly think a half-cent per user is more accurate, but I doubt we'll see this stock get that low.

 

[chet]

This deal was overpriced by Morgan Stanley probably because of pressure from Zuckerburg. It happens all the time but is a lot more visible because of the size and scope of this deal.

Why did Zuckerberg want the IPO priced so highly?

Management always wants the IPO priced at the high end. It maximizes the company's take, and in this case, Zuckerberg's too. It's pretty rare to see management selling shares in an IPO. It could also be an ego thing--FB went public with a market cap >$100BB. I don't think that's ever happened before ex. privatizations etc.

 

[chet]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

How did you get 1000 retail shares?

Allocations are always better when the deal is in trouble. If you can get it, you often don't want it.

 

[culdeus]

Are the volumes dropping because of nasdaq issues, or are they really just dropping because everyone is calming down?

 

[GroveDiesel]

With the terrible ROI on Facebook advertising, their value will tank in under 5 years unless they figure out a new model. That will be about the time that all of the larger buyers will have them figured out and the word will be out everywhere to avoid Facebook advertising.

What they screwed up on was not creating some sort of premium feature involving photos and video storage/sharing.

Their only longterm value I see now is in selling access to the huge amount of personal data they have. The problem there is that everytime they step further down that path, people freak out about it and Facebook backs off.

 

[shader]

I think what toadstool is referring to is the fact that businesses are going onto facebook to do advertising. They are using facebook to drive people to their "page".

What toadstool doesn't realize is that the reason people do this is because it's FREE! Anyone can create a facebook page and update it continuously!

Facebook's problem is that they are dependent on advertising. The problem is that they are a social media site, and their "hip factor" is entirely dependent on the whims of young people.

All it takes is one freaking movie where some "dreamy actor" slams facebook as "old news", and the lemmings (as FavreCo so eloquently named them) will jump ship and leave the company in a pile of dust. It will be exactly what happened to MySpace.

The reason Google remains dominant is because they have an actual product. The best search engine bar none.

The only way Facebook survives is to continue to remain the unequivocal leader in social media from now on. I just don't see how that happens.

As such, I wouldn't be caught dead holding this stock for very long.

 

[FavreCo]

I am still holding 1000 at 38I have added 1000 at 33.25I have another order of 1000 in at 29.50, should it get that low.I have great long term confidence in this stock.

Here's how you should look at it. You've lost a little bit of $. On paper, Zuckerberg has lost about $2 billion today.

 

[shader]

With the terrible ROI on Facebook advertising, their value will tank in under 5 years unless they figure out a new model. That will be about the time that all of the larger buyers will have them figured out and the word will be out everywhere to avoid Facebook advertising.What they screwed up on was not creating some sort of premium feature involving photos and video storage/sharing. Their only longterm value I see now is in selling access to the huge amount of personal data they have. The problem there is that everytime they step further down that path, people freak out about it and Facebook backs off.

They have to re-invent themselves pretty quick or it's over.I heard some radio talk show host pimping Facebook the other day and talking about how FB was going to create their own currency, and basically became the one-stop shop for the entire internet. He said one day we'd laugh at how cheap the stock was.He spun a good yarn, but when I thought about it, I realized his story was full of holes.Facebook loves to put the "800 million users" shtick out there, as if there are that many people using it.The truth is that there are countless businesses, duplicate users, pets, jokes, fake people, etc.I've read that some people have created 10-20 duplicate accounts, just to help them in farmville games and other games where they want you to attract a certain number of friends.It's a dying ship, and if they don't take this cash infusion and change their strategy, it's going to crash down.

 

[Fat Nick]

Some day people will realize that website hits don't equal realized revenue from advertising. Just because I go to Facebook doesn't mean I have or ever will buy anything because of their advertising. Truthfully, I don't know that I've ever bought ANYTHING because of on-line advertising. If anything, I get mad that they have dumb pop-ups on yahoo that take up my whole screen, etc. I mean, remember how mad people were when there were annoying ads on FBG at one point? I know that there are studies that show a link, or else they wouldn't do it, but I'd argue that there are other factors...i.e. a company is probably on an upswing anyway if they have ad money to throw into on-line advertising. Proving a direct correlation would be tough.

That said, I've had my own concerns about Facebook's viability as a true company since day 1...It's a social media juggernaut, but it might not have an EPS worth squat.

 

[Fat Nick]

With the terrible ROI on Facebook advertising, their value will tank in under 5 years unless they figure out a new model. That will be about the time that all of the larger buyers will have them figured out and the word will be out everywhere to avoid Facebook advertising.

What they screwed up on was not creating some sort of premium feature involving photos and video storage/sharing.

Their only longterm value I see now is in selling access to the huge amount of personal data they have. The problem there is that everytime they step further down that path, people freak out about it and Facebook backs off.

I agree with all of the above except the bolded section. People are cheap. Keep things free, and they keep coming and are loyal. Make them pay for ANYTHING, and suddenly most online sites aren't worth it.

That's the holy grail of the internet...how to keep things free to the user, but still make money...and thus far, advertising or data collection/sale is the only real way, and both have their drawbacks as noted.

 

[GroveDiesel]

I think what toadstool is referring to is the fact that businesses are going onto facebook to do advertising. They are using facebook to drive people to their "page".

What toadstool doesn't realize is that the reason people do this is because it's FREE! Anyone can create a facebook page and update it continuously!

Facebook's problem is that they are dependent on advertising. The problem is that they are a social media site, and their "hip factor" is entirely dependent on the whims of young people.

All it takes is one freaking movie where some "dreamy actor" slams facebook as "old news", and the lemmings (as FavreCo so eloquently named them) will jump ship and leave the company in a pile of dust. It will be exactly what happened to MySpace.

The reason Google remains dominant is because they have an actual product. The best search engine bar none.

The only way Facebook survives is to continue to remain the unequivocal leader in social media from now on. I just don't see how that happens.

As such, I wouldn't be caught dead holding this stock for very long.

This is the other place I think they've missed the boat. Why not charge a small fee for businesses? Kind of like how Craiglist only charges for realty listings in certain areas. If you have a personal page, charitable page, band page, etc., then it's free. If you have a business page, you get charged some type of fee. Seems like if they made the fee small enough, they would have no problem charging it, but would still be gaining a lot of additional revenue.

 

[Slapdash]

With the terrible ROI on Facebook advertising, their value will tank in under 5 years unless they figure out a new model. That will be about the time that all of the larger buyers will have them figured out and the word will be out everywhere to avoid Facebook advertising.What they screwed up on was not creating some sort of premium feature involving photos and video storage/sharing. Their only longterm value I see now is in selling access to the huge amount of personal data they have. The problem there is that everytime they step further down that path, people freak out about it and Facebook backs off.

I think the problem is that, at the end of the day, Facebook's users are its product and not its customers. If the only way you have to monetize the social network is to sell everyone's information than I think you fail in the long run. People will only take so much before they stop sharing new information and take steps to avoid the service. I think there is real value in being able to connect with your friends and family to share information but Facebook is going to squander it by insisting on selling people's information instead of creating a secure place for sharing with who you chose.

 

[shader]

I think what toadstool is referring to is the fact that businesses are going onto facebook to do advertising. They are using facebook to drive people to their "page".

What toadstool doesn't realize is that the reason people do this is because it's FREE! Anyone can create a facebook page and update it continuously!

Facebook's problem is that they are dependent on advertising. The problem is that they are a social media site, and their "hip factor" is entirely dependent on the whims of young people.

All it takes is one freaking movie where some "dreamy actor" slams facebook as "old news", and the lemmings (as FavreCo so eloquently named them) will jump ship and leave the company in a pile of dust. It will be exactly what happened to MySpace.

The reason Google remains dominant is because they have an actual product. The best search engine bar none.

The only way Facebook survives is to continue to remain the unequivocal leader in social media from now on. I just don't see how that happens.

As such, I wouldn't be caught dead holding this stock for very long.

This is the other place I think they've missed the boat. Why not charge a small fee for businesses? Kind of like how Craiglist only charges for realty listings in certain areas. If you have a personal page, charitable page, band page, etc., then it's free. If you have a business page, you get charged some type of fee. Seems like if they made the fee small enough, they would have no problem charging it, but would still be gaining a lot of additional revenue.

I totally agree with that. Unfortunately if they started it now, everyone might bail.A huge revenue stream right there that they are missing out on, and if they try to go get it could result in severe negative backlash.

 

[Dr. No]

I agree with all of the above except the bolded section. People are cheap. Keep things free, and they keep coming and are loyal. Make them pay for ANYTHING, and suddenly most online sites aren't worth it. That's the holy grail of the internet...how to keep things free to the user, but still make money...and thus far, advertising or data collection/sale is the only real way, and both have their drawbacks as noted.

this is true. if FB even wanted to start charging me $1 a month, I'd just quit the site.It's not worth $1/month to me.In fact the only online services I do pay for are Flickr (and i'm pretty sure i'm about to quit that), and FBG's.

 

[eoMMan]

I agree with all of the above except the bolded section. People are cheap. Keep things free, and they keep coming and are loyal. Make them pay for ANYTHING, and suddenly most online sites aren't worth it. That's the holy grail of the internet...how to keep things free to the user, but still make money...and thus far, advertising or data collection/sale is the only real way, and both have their drawbacks as noted.

this is true. if FB even wanted to start charging me $1 a month, I'd just quit the site.It's not worth $1/month to me.In fact the only online services I do pay for are Flickr (and i'm pretty sure i'm about to quit that), and FBG's.

Really? You wouldn't pay $1/month for your business page? Or are you just talking about a personal page?

 

[Slapdash]

I agree with all of the above except the bolded section. People are cheap. Keep things free, and they keep coming and are loyal. Make them pay for ANYTHING, and suddenly most online sites aren't worth it. That's the holy grail of the internet...how to keep things free to the user, but still make money...and thus far, advertising or data collection/sale is the only real way, and both have their drawbacks as noted.

this is true. if FB even wanted to start charging me $1 a month, I'd just quit the site.It's not worth $1/month to me.In fact the only online services I do pay for are Flickr (and i'm pretty sure i'm about to quit that), and FBG's.

I would gladly pay $1/month for a social networking service who wasn't selling my information to any and all third parties that want to use it.

 

[toadstool]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn’t change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

 

[RUSF18]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn’t change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

(takes out pen and paper...carry the 2...round that off). ### ####.Hell of a portfolio for a mid 30s guy. Good for you.

 

[ffldrew]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn't change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

I'd wait for the lockup periods to end and then see where the price stands before committing the money at 29.50 before the two (90/150 days out) happen

 

[Dr. No]

I agree with all of the above except the bolded section. People are cheap. Keep things free, and they keep coming and are loyal. Make them pay for ANYTHING, and suddenly most online sites aren't worth it. That's the holy grail of the internet...how to keep things free to the user, but still make money...and thus far, advertising or data collection/sale is the only real way, and both have their drawbacks as noted.

this is true. if FB even wanted to start charging me $1 a month, I'd just quit the site.It's not worth $1/month to me.In fact the only online services I do pay for are Flickr (and i'm pretty sure i'm about to quit that), and FBG's.

Really? You wouldn't pay $1/month for your business page? Or are you just talking about a personal page?

yes, i'd pay $1/mo for my business page, but facebook isn't working for me as a marketing medium for my practice.my website does all that.I don't think i've gotten a patient yet who said they found us on facebook.I wouldn't pay $5/mo for my business page though.. i'd just quit

 

[Dr. No]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn’t change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

1) That's a filthy portfolio size for your age... I have serious portfolio jealousy2) are you trading FB in one of your tax advantaged accounts, or a cash management account? What % of your portfolio is in tax advantaged accounts (ira, 401k, etc) vs. cash accounts.I'll hang up and listen.Jeez.. i'll be lucky to have that type of portfolio by 45 let alone 35.

 

[eoMMan]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn’t change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

Can you provide one of your statements with a penny next to it please? Thanks.

 

[FavreCo]

Can you provide one of your statements with a wheat penny next to it please? Thanks.

1909 S VDB. TIA. You can afford one.

 

[toadstool]

@toadstool - can i ask what you do for a living? you're either one hell of a gambler, or you make a half million a year, or you got a huge inheiritance/windfall, or you live in your mom's basement and have tons of cash.

I am in advertising.

i'm assuming if you've got 71-100 K to put into facebook that you've got a million plus portfolio

Yes, that would be accurate.

Advertising... is that why you're bullish on it? do you have more insider type of information in terms of where ad dollars are going?nice work with the portfolio

Thanks, not so much insider information, as much as seeing where advertisement dollars are going and projected to go throughout 2013. While Facebook pages are free for businesses there are many ways they pay for real estate on the site. I am not arguing that this strategy makes sense for companies, but that doesn’t change 18-24 month outlook. Right now I am holding about 4.5% of my portfolio in fb, I am willing to take that to around 7. An additional 1000 at 29.50 would put me just over that target.

Can you provide one of your statements with a penny next to it please? Thanks.

LoL, sorry I don't have a penny ;-)

 

[Fat Nick]

Can you provide one of your statements with a penny next to it please? Thanks.

LoL, sorry I don't have a penny ;-)

How about a debit card and drivers license then?

 

[Abraham]

Some of this discussion shows a fundamental misunderstanding of online advertising and data collection. I'll explain shortly, but first, my thoughts on the IPO.

I'm actually fairly bullish on FB stock, just not at this price level. 100x earnings and 100 billion dollars? Essentially the stock offering priced out at least 2 or 3 years of growth. Good for those that already had options, but there is a ceiling on what the stock can do for a while. IMO they could triple their revenue/earnings and the stock might not move at all. If it gets down to 23-25 or so I'll be buying as much as I can.

Anyway, the discussion about paying for the service or charging for business pages is silly. Similarly silly are all of the recent articles about people not seeing any return from FB ads. This should come as a surprise to no one - for ads to work, the person viewing them has to be complicit in receiving the message. Ads work on Google because when people go to Google they are almost always LOOKING FOR SOMETHING. Google's ad platform monetizes them finding what they need. Facebook does no such thing. Visitors to FB do not go to FB to shop, they go to stalk ex-girlfriends and post pictures of their pets or whatever.

I don't think anyone (including the FB people) think that their on-site ad platform is ever going to generate much revenue. But the point of the on-site ad platform may not be to generate revenue but rather to dial in the ad platform itself. The FB-based ad platform is a testbed/sandbox for FB to match ads to people and test algorithms and such....

...which leads to how FB is going to make a zillion dollars.

Recently, FB changed their ToS to allow FB to track you when you are not on the FB site. THis means that when you go to another browser window or a different site, FB has the ability to follow you. So everywhere you go on the internet, FB is able to go with you and the treasure trove of data they have is with them. Which is why they will be launching an AdWords/AdSense competitor in the not too distant future. They don't care about making money off of you while you're on FB (outside of teenagers buying virtual goods in games). Rather, they give you the FB platform to use for FREE so they can collect scores of information about you. Eventually they will have a platform for publishers that delivers on site revenue to publishers like Google does, only the ads they serve will have higher conversion rates because they are REALLY atuned to you and your likes and dislikes, more so than Google.

The challenge FB faces is time of engagement on the site, not so you might click on an ad but so they have time to collect more info about you. They need "horizontal" engagement....right now that average FB user is on the site less than 4 minutes a day IIRC. The longer you are on FB, the longer your friends are on, the more data they can collect about what ads to serve you on their new ad platform. By creating the app store a couple weeks ago, they are opening the door up for the same creative types that made the Apple app store so successful to come in and make the FB ecostystem full of new games and business services and tools and other stuff.....all things intended to make you come to facebook more often so they can collect more data and thus make more money when you leave FB.

People talk about their challenge in mobile being about monetizing a mobile site, which is silly. They don't need to run ads on a FB app...they just need to make it full featured enough that you interact with it the same way you interact with FB on the desktop. They bought Instragram for this reason. They will continue buying properties that people engage with. Not so they can run ads on those properties, but so they can get more info about you.

The stock will slowly slide for the next 6-18 months. And when the ad platform is announced the stock will double in a week. Black dot it, put it ink.

 

[Kraft...]

The Karma Science acquisition, previously mentioned in this thread, supports what Abe is saying IMO. Karma Science gets data on both ends, gift sender and receiver. Plus they apparently get data from the receiver that facebook doesn't(ie shipping info).

 

[Abraham]

Google isn't envious of FB being cool so they decided to get in to Social. They were envious of the fact that FB's data collection is better than theirs and eventually they will be competing for the same ad dollars and ad space.