SociaLight Media Blog

I have to say, I was a little surprised by this article from BusinessWeek, Has Facebook’s Value Taken a Hit?

It talks about how “dozens” (according to this guy) of Facebook employees, including Zuckerberg himself and departing vice-president Matt Cohler, have been selling off some of their common shares - and their prices haven’t been implying the $15 billion price-tag originally set by Microsoft’s 2007 purchase of 1.6% of the company. More like $5 billion. The article also mentions that once Facebook employees got wind of Zuckerberg and Cohler’s stock partings, there was some general dissension. Zuckerberg then sent out a company statement saying that the would allow employees to sell stock as a “onetime program to enable employees to realize some liquidity.” Read into that as much as you want.

So not good news from the Facebook front, however what really surprised me were some of the comments below the article. Here’s one:

May Aug 14, 2008 12:40 PM GMT “Not surprised Facebook is falling flat on its face! The ads don’t make sense. I haven’t clicked a single one, despite spending countless hours on facebook. Any mention of charging users a fee causes an uproar and many would abandon their page for somewhere free like myspace. How exactly do they expect to make any money? Who in their right mind would buy these shares right now?”

Heck, I’m buying some when they go public! Facebook IS the social network powerhouse! MySpace is dead; there’s too much spam. MySpace counts “active” members as someone who has logged in once in the past YEAR! I log into my Facebook account probably between 5 and ten times a DAY. It seems like people aren’t using MySpace anymore/nearly as often as they used to or it’s just a spam haven now. Or both.

This one actually made me laugh:

Midwest Aug 14, 2008 2:09 AM GMT “Potential advertising revenue is the only possible reason for Facebook’s $15 billion valuation. What other reason could there be? There’s no monthly user fee or membership charge so the only reason for the hype is ad $. But guess what? Nobody looks at the ads and the click through rate is laughable. Advertisers might as well take their money and throw it on a fire. At least they can use the heat to grill some dogs on. Advertising on the web is a joke but it remains viable only because it’s so cheap. Hey advertisers, save your money and buy some print, radio or tv spots. Get some real results for your spend.“

Yes, Facebook is having some problems with monetizing their technology and user-base, however to simply say that advertisers should pack it up, quit online advertising, “take their money and throw it on a fire”?? Talk about absurd! Yes, banner ads aren’t the solution. We KNOW that. They never have been! I can count on one hand the number of times I’ve clicked a banner ad - the only times were are for a store that was already on my to-do list. Good job, Facebook, for correctly targeting my interests and providing me with a reminder. However, this minuscule traffic isn’t going to cut it - I agree. The money is in the built in advertising, I think. Here’s a great article from Tech Crunch (back in 2007) called MySpace v. Facebook “It’s Not a Decision, It’s an IQ Test.” The money is in the widgets & applications, like Where I’ve Been, and social ads, where “advertisers provide the text, and Facebook pairs it with a relevant social action that your friend has taken. Social Ads mean advertisements become more interesting and more tailored to you and your friends” (from Facebook). This is relevant stuff in my newsfeed that I’m bound to take notice of, at least I think so. What do you think?

This entry was posted on Thursday, August 14th, 2008 at 1:48 pm and is filed under facebook. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.