Facebook: Now thinking big in generating revenue

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Offline Faiyaz

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Facebook: Now thinking big in generating revenue
« on: May 19, 2012, 08:21:53 PM »
Yesterday Facebook went 'public'. The estimated 104 billion company priced its shares $38 a piece and was expected yesterday that due to the boom the company could be priced 140 billion at the end of the day, which was quite attained.
But I dont want to reflect the light on the present stats. and market trends about FB. When i first saw this 'FB going public' news on BBC, i thought (like a stupid) why people would be wanting to invest on FB? Or if i modify my question, how does FB generate revenue? Within a minute i remembered the advertises i use to see in the site. And recognized the fact that people would be wanting to invest on FB as FB ensures its shareholders thru its increasing account holders that, the advertisers will be attracted by their huge followings and FB will gain even more advertisements thus they'll get advertisement revenue at SPV (see per view) basis and hereby they (shareholders) will get their return (dividend). And as we know, FB is very intelligent in segmenting. E.g- if you have and write at the interest link that you take interest on psychology, they will advertise you books on this regard. But this advertising isn't the only source FB generates revenue. FB also has applications which helps in generating revenue. The most famous example could be 'farmville', Zynga's game which uses FB as its platform generate revenues from 'traffics' from FB players. Thus facebook gets a 'fee' for letting them use the platform.
But now although mark zukenburg has majority amount of equity of the company, he has to answer the shareholders, who'd constantly pressure for more revenues. So under this circumstances we might be able to see some advertising or other revenue oriented stuff for mobile users of FB, since more than 15% of the FB users use FB on mobile. Other than that FB may now more be developing 'intellectual properties' rather than socializing & fun stuff. For this FB may follow tweeter since tweeter generates revenue by selling the trending topics & tweets to goggle & other search engines. Other than that by this way, they also 'nest up' new tweeters, who were not previously signed in.
But my concern is still with shareholders attainment. Zuckenburg or FB counts their revenue by their advertisement (which is quite unusual from other listed companies) and shareholders count by EPS (earning per share). So as FB brag about their subsequent increase of advertisement over 3 years, it'd be interesting to see how this revenue generating source may increase revenue in one single year.
So yet i'm still confused how an 'advertising firm' can satisfy all its stakeholders?                     
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Offline goodboy

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Re: Facebook: Now thinking big in generating revenue
« Reply #1 on: May 19, 2012, 10:58:56 PM »
Hmm,,nicely discussed......you have mentioned some good points which must be taken in sense!!
Now see this:
Can Facebook Survive In The Long Run?

Now that Facebook is public, speculation about its future heats up........
The much-anticipated initial public offering of Facebook, as you surely know by now, has finally taken place. Although the news has garnered a lot of excitement, it has also brought up some questions. Numerous analysts have raised concerns over the future of the company, citing uncertainties about Facebook’s revenue model, mobile strategy, advertising, Mark Zuckerberg’s leadership, and more.

Christian Taylor, CEO of leading Facebook ecommerce platform, Payvment, tells WebProNews he’s not worried about the company’s future.
Francis Gaskins, the President of IPODesktop, spoke with WebProNews earlier this year, and told us he was skeptical of the future growth of Facebook given its past quarter earnings.

“[If] you look at what happened for December 2010, March, June, and September of 2011, oddly enough, what you will find is the operating earnings were flat,” said Gaskins. “The net after tax earnings were flat, and the margins – the profit margins – went down.”

“The credibility of management’s forecast is very, very important,” he added.

More recently, we talked with Vitaliy Katsenelson, the Chief Investment Officer at Investment Management Associates and author of The Little Book of Sideways Markets. He too voiced doubt about investing in Facebook and indicated that Wall Street would quickly demand higher revenues and a CEO that is more committed to profitability.

“After a while, investors are going to start looking at it… not as this kind of prized asset, but as a business where genuine cash flow is essential,” he said.

“I want him [Zuckerberg] to think about long term stability,” he continued, “and if he doesn’t, I would just run. I would not touch the stock.”

What’s more, a new poll from Whisper Number does not deliver results in Facebook’s favor either. The financial research firm surveyed 1,100 investors and traders and found that 68 percent of them would not consider Facebook a “buy” after its IPO. When asked if Facebook was a long term investment, 65 percent of those surveyed also answered with “No.”

Contrary to these viewpoints, there are those who value Facebook very highly. Payvment’s Taylor told WebProNews that he was not at all worried about the company going public or its future, and that the wildly popular social network is much more than Facebook.com. Unlike other destination sites, he told us that Facebook creates a means to connect the entire Internet and world. Specifically, it brings people together while also allowing them to discover news, movies, games, and much more.

“[It’s] something that’s so engrained into the fabric of the entire Internet,” he said. “If you look at Facebook as just a .com entity like you would any other .com place, it’s very narrow-sighted.”

Taylor is also very confident in Facebook’s CEO, Mark Zuckerberg. As a fellow CEO/engineer, he told us that he watches Zuckerberg’s leadership “in awe.”

“The reason why Facebook can still innovate to this day, and the reason why whenever I talk to an employee of Facebook, they’re excited to be working there – they truly do feel like they’re changing the world… that is Mark Zuckerberg’s doing,” pointed out Taylor.

“He’s really the guy that rallies that company and will going forward,” he added.

Taylor believes so strongly in Facebook and its CEO that he built his own company on top of the social network. Payvment, as he explained, allows businesses to add ecommerce to Facebook in order to create a new social shopping experience. At this point, it has more than 160,000 businesses using its apps to promote their products and services on Facebook and is adding hundreds more daily.

“We’re really truly inventing a completely different kind of shopping when it comes to shopping on a social network such as Facebook,” he said.

It is this new shopping experience and the “huge possibilities” that it brings that makes Facebook a good investment to Taylor. He’s not concerned about competition from Amazon or eBay since Facebook enables serendipitous shopping. In other words, users shop based on what is happening in the Facebook environment. For instance, around the season premiere of the hit show the “Walking Dead,” Payvment noticed that zombie related items were their top sellers.

Taylor believes that Facebook will build upon its ecommerce platform and utilize it for further monetization. He envisions the current gaming “credits” being integrated into ecommerce in a way that makes shopping universal and seamless through the Facebook platform. With Facebook’s IPO, Taylor told us that he could see this potential concept and other innovations happening very quickly.

“A lot of times… when companies go IPO and they get big,” he said, “they have a tendency to slow down. But, I have a feeling that… we’re gonna see the complete opposite.”

Facebook better not slow down, because it has a lot more competitors than those mentioned. The giant elephant in the competition room, of course, is Google, who also happens to have a pretty wide presence throughout the web (beyond Google.com).

It’s not just a matter of Google+ vs. Facebook. Facebook is clearly lightyears ahead on that front. Advertising is another matter, however.
 Take a look at this infographic comparing Google and Facebook in terms of advertising and revenue:

There has been a fair amount of controversy this week around Facebook ads, with GM deciding to pull the $10 million it spends on them, in favor of trying the free content-centric Facebook Page/Timeline approach. As unfortunate as it is for the social network, the fact is that this approach is certainly going to continue to be an attractive strategy for many businesses. Of course, it’s always a matter of News Feed visibility, which is controlled by Facebook and its algorithm.

Some, as Taylor suggested, think Facebook Credits might become a bigger source of revenue for the company.

In Facebook’s defense though, there aren’t many companies that can claim to have a significant user base of addicts. You don’t hear about “Google addicts” so much. A recent study found that Facebook is slowly becoming the reason to pay the Internet bill, at least in the U.S.

People use many of Google’s products to serve specific functions, rather than to just hang out. Although Google is hoping to get a lot more people hanging out on Google+, and certainly YouTube is a popular web hangout spot.

On the other hand, a recent poll found that half of the U.S. thinks Facebook is a passing trend. And why not? We’ve all seen other hugely popular social sites emerge and fizzle out. But again, Facebook is much more integrated with the web at large than any of those ever were.

And of course, Facebook is huge around the entire world.

I think it may be helpful for the news readers!!!

Source: webpronews.com
« Last Edit: May 19, 2012, 11:00:45 PM by goodboy »
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Re: Facebook: Now thinking big in generating revenue
« Reply #2 on: June 27, 2012, 02:31:37 PM »
thank you good boy for your nice information.