Facebook loses $157m

[DavidL]

Facebook reported a loss of $US157 million in its first earnings report after its blockbuster public offering, and although the loss was in line with expectations the company's troubled shares sunk to a new low

http://www.smh.com.au/business/worl...te-almost-1-billion-users-20120727-22wxr.html

They have complete dominance, nearly 1bn users and still losing money? I don't get it - where is the money going? How can they possibly expect to turn a profit? How on earth does that still value the company at $60b or whatever?

 

[Chris.C]

http://www.smh.com.au/business/worl...te-almost-1-billion-users-20120727-22wxr.html

They have complete dominance, nearly 1bn users and still losing money? I don't get it - where is the money going? How can they possibly expect to turn a profit? How on earth does that still value the company at $60b or whatever?

When it IPOed I was thinking to myself was, this a total short, but with stocks like this it's important to remember "the market can stay irrational longer than you can stay solvent."

 

[findtim]

amazon did the same, i'm just amazed how people stick with these companies and where does all th emoney come from?

Jan 2002, http://www.foxnews.com/story/0,2933,43630,00.html

tim

 

[Mark]

With a reach of 1bn users - you can demand some serious cash for advertising.

Look at the Super Bowl - 100 million odd viewers and advertisers pay millions for a slot.

If FB were to send out say a weekly email advertising some product I'm sure their loss would be profit in no time. What would Coke pay to send a Coke advert to 1bn??

They'll find ways to bleed in more advertising very soon I'm sure...

 

[findtim]

didn't general motors usa pull all their advertising off facebook recently?

http://www.forbes.com/sites/joannmu...ebook-ads-dont-work-pulls-10-million-account/

tim

 

[snoopy]

They have complete dominance, nearly 1bn users and still losing money?

I think the company was previously profitable. Seems to be IPO related expenses/payments that resulted in the loss.

I don't get it - where is the money going? How can they possibly expect to turn a profit? How on earth does that still value the company at $60b or whatever?

I think people would be betting they can work out a viable business model. Think they aren't really there at the moment I think, a large market and poor monetization.

 

[FirstPageResults]

When they find a way to monetise their mobile users (which has grown at a rapid rate) I'm sure they'll do well

 

[acheeva]

A $60b; a 1b use base & a PE of say 12 means (imo) that they need to generate net profit after tax of around $5 per follower
This would equate to a gross revenue of at $60-100 per user (their margins are difficult to estimate)
That does not seem difficult, however the demographics would be interesting
They do have a young Asian follower base who are unlikely to contribute substantially to this requirement.

Valuations of $50-60 per user have been achieved in the "deals" sector; however are they sustainable?

 

[findtim]

does anyone remember ICQ? these websites have NO loyalty associated with them, people use it because its FREE.

there are already other websites snipping at their heals, pintrest, badoo to name 2.

they need to come up with something special, at this moment they are trying to do their version of google ads and its not working and i don't think getting coca cola to send an email to 1 billion people is going to work, people will just get pissed off.

they have 1B "consumers" , they just need to make part of everyones EVERYDAY life cheaper and they will make a motza.

with companies using facebook as a marketing tool for specials instead of just "social" they are loosing their advantage. they have SOOOO much knowledge about each person yet their side adverts are not finely tuned enough, they are LAZY in their efforts so far and thats why they are not making money.

I think they will make money but god help them if the "next big thing" pops up next week.

tim

 

[helloworld]

didn't general motors usa pull all their advertising off facebook recently?

http://www.forbes.com/sites/joannmu...ebook-ads-dont-work-pulls-10-million-account/

tim

They got back on the wagon after about 2 weeks

 

[findtim]

They got back on the wagon after about 2 weeks

did they just dip out until the IPO was settled?

tim

 

[helloworld]

Nah I think they decided that they did need to be on it. I think there was a mention on se journal or seomoz

 

[findtim]

i heard a story yearssss ago @ 1997, that someone in mcdonalds decided that if they stopped advertising on radio they would save a fortune, the story goes that within 7 days their sales were down more then what they woud save for that month and RACED to get their advertising back on air.

tim

-----------------

further to that, when i was selling radio advertising in 2000 and JUST new to that game a business said to me " radio advertising doesn't work" i went to my boss and told him, he said " go back down and tell them " we will give them A free advert ( just ONE ) tommorrow at 11.50AM, and it will say from 12 till 12.15 today everything instore will be 90% off and then ask them if they still think radio advertising doesn't work"

thankfully my boss was known for being REAL prick so i didn't get tossed out of the shop but it took me 12 months before that business bought advertising off me !

another gem is the boss use to say " in a business you have just 2 GREAT sales, grand opening and closing down " LOL

tim

 

[James]

Staff hires, staff hires, crazy offices check the sydney one, slow to move on advertising options.