Says CNN:
"Yet questions still remain about the finances behind Facebook's remarkable expansion. The company has attracted more than $200 million in investment from venture capitalists while in 2006 it rejected a reputed $1 billion bid from Yahoo!
In 2007 Microsoft paid $250 million for a 1.6 percent share, a figure that gave Facebook a total projected value of some $15 billion.
But with the global financial crisis hitting Web advertising -- Facebook's core revenue stream -- those sort of figures now appear to belong to a bygone age.
"What Facebook isn't yet is a slam-dunk success," said Adam Lashinsky of Fortune magazine last month. "It is selling advertising, it is bringing in revenue but it's not wildly profitable even if it is profitable at all.
"There is no question that it has entered the zeitgeist but that doesn't mean that it has progressed beyond the stage of being cool or viral or exciting to being a mega-business success the way that Google, Microsoft or even its arch-competitor MySpace is." "
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I found a related article that talks about how LinkedIn is growing much slower than facebook but is still making good money
ReplyDeletehttp://www.alleyinsider.com/2009/2/facebook-growing-seven-times-faster-than-linkedin
In fact, it also relates to the previous article I posted, about monetizing twitter. Monetizing seems to be a common problem among Web 2.0 companies with large user bases.
An interesting difference between LinkedIn and Facebook is that LinkedIn CAN provide its users with monetary gain (via job placements from an employee's perspective and job fulfillments from an employer's prospective). As such, I believe LinkedIn is in a better position position to charge for their services since user's can forsee recouping some if not all of their member expenses, thus making the transaction worth it. In many ways, it's like posting a classified advertisement in a newspaper or website. Historically, people have been willing to pay for such services. Facebook, however, is strictly an entertainment facility and consequently its users are much more price sensitive. In general, I would say that monetary incentives are much more compelling than entertainment ones. Plus it's always difficult to start charging for something that previously was free.
ReplyDeleteFacebook will last in the next 5 years(after it's intro) but still am sure it gonna cause a lot of problems because it makes communication alittle easy for many people.
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