DISQUS

George · 1 year ago

Facebook is "valued" at $15B simply because of the Microsoft investment, which was simply a play to keep Google away. Social networking is here to stay, but there are already signs that it is waning, and it has yet to find a successful monetization model like Google Adwords. If it can't turn it around in a year or two, or if Microsoft stops seeing it as a critical wedge in its fight against Google, the value if of the company will drop significantly.

It will be hard to monetize all those page views for Facebook. Adwords works best when there is purchase intent demonstrated by the user who enter a query into Google, there is no such intent in Facebook - people go there to waste time. Only a radical new advertising (read: user tracking and profiling) scheme will do, and it's not Beacon.

Microsoft is probably overvaluing the strategic significance of Facebook anyway. With Facebook's recent decision give outside developers access to the social graph, it is no longer the walled garden Google couldn't penetrate.

And what on Earth are they planning to do with a 1000 employees? Google can afford the luxury of brainstorming and trying out new things, it has the Adwords cashcow to float it. Facebook's VC money is not exactly a reliable source of revenue.

mathewi · 1 year ago

All good points, George. Thanks for the comment.