You might already know this, but in case you don't, Yahoo! offered to buy Facebook for one billion dollars last year. Many thought that the Facebook Founder and CEO Mark Zuckerberg was insane to turn down that offer. But the latest edition of Business Week (8 Oct 2007) reports on page 30 that Facebook is expected to generate $150 million in revenues this year, and is selling a small stake that values the company at $10 billion! Apparently the main suitor is Microsoft, but Google may jump into the equation.
I bought the book 'Smart Start-Ups' by David Silver today (published by Piatkus Books Ltd, 2007), and Silver states in his preface that 'I'm not at all optimistic about the staying power of MySpace and Facebook'. He further states that 'Other than providing a playground for young people to meet and communicate, I question the economic durability of MySpace and Facebook'.The number of high price tech purchases in the recent past that turned out to be duds are well documented elsewhere.
So what do you think about Facebook? Is Facebook really worth that much? Besides advertisements, what other revenue channels can be generated? Can those add-on applications on Facebook make money? Please comment.
2 comments:
I guess if you're looking from the Facebook admin, it's mostly advertising. But there's a lot of spinoff business opportunities within facebook... Have a read on this http://www.smh.com.au/news/web/facebook-gets-on-with-business/2007/10/09/1191695837750.html
Teng Ken,
Thanks for this comment, and especially for the 'link' to the Sydney Morning Herald article.
The momentum on Facebook is surely there. But whether they can successfully monetise and cement their business model is yet to be seen. Advertisements on Facebook is already earning them good revenue, but they will need to do more than just advertisement to realise its full value. Friendster failed to do this successfully despite their early successes and momentum.
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