Comments on: Would you invest in Facebook- an update

By: Thicken My Wallet » Blog Archive » High-yield Bonds- new name, same old junk?

Wed, 01 Apr 2009 05:00:59 +0000

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By: Lance

Lance — Thu, 12 Mar 2009 15:48:57 +0000

Bang on analysis. Great idea, lots of usership, very few ways to make revenue. If Facebook tried to get too aggressive with revenue generating ideas, people would just flock to the next social media website and leave Facebook to go broke… there are far too many free options out there.
Can it ever turn a small profit? Possibly. But I highly doubt it could turn a big profit. And being in a tightly competitive market, there isn’t much of a moat (to use Buffet’s term) around the company to protect it from future revenue loss. I guess this is why their primary strategy is increasing the userbase: the more people using it, the more popular they become, they more they separate themselves from the other social media sites.

By: admin

admin — Thu, 12 Mar 2009 15:47:09 +0000

Ray- that’s tech companies for you in a nutshell. Remember everyone getting a CD-Rom in the mid 90’s to sign up for an AOL email account?

By: Ray

Ray — Thu, 12 Mar 2009 15:30:20 +0000

I personally would not invest in any of the social network business, I think they have a short boom period after which they all slowly die out. Facbook 2 years ago was the thing to have, now twitter it’s twitter’s turn a few years ago it was MySpace and so on. Every few years you’ll have a new social media outlet, so dont find it attractive.

By: admin

admin — Thu, 12 Mar 2009 14:10:31 +0000

Tom- you hit the issue on the head. Facebook really doesn’t know what it wants to be and you can’t invest in something like that does not have a clear niche.

By: tom

tom — Thu, 12 Mar 2009 13:30:24 +0000

Well personally if you compare Twitter with Facebook, Twitter seems to have a more promising future but I still not sure how either one can make money.

Facebook can and probably is a huge time vacuum that sucks time out of peoples lives, unless they actually use it for something productive. Twitter is good for finding friends quickly, much better then facebook I would say.

I did read that article and he said he wants facebook to be like a phone book but in reality, isn’t that what google is becoming? You can find more information on someone by going to google than facebook.

Maybe facebook is too broad and doesnt have a specific niche and thats why they cant make money.

Those are just my thoughts.