patrick.net

thomas,

that person identifies HimSelf with the American Express Black card. You wanna spend your calories arguing with someone like that?

Jeez.

B.A.C.A.H. says

You wanna spend your calories arguing with someone like that?

Arguing burns calories? I need to argue more. It's the most fun exercise I get!

B.A.C.A.H. says

thomas,
that person identifies HimSelf with the American Express Black card. You wanna spend your calories arguing with someone like that?
Jeez.

they wont last long... they never do.

Based on Thomas' logic, Facebook would be massively overpriced when Microsoft valued them @ 15B on a private transaction three years ago. Clearly that is wrong.

High PE can be supported if the profit margin are high and sales are rising. That is the essense of a money generator and the only reason I see Facebook as a worthwhile investment. This has nothing to do with Ariba and Commerce One, or dot com. 99.9% fail rate is not tehnically not correct anyway.

Besides Goog and Bidu, there are plenty of companies that grow into their high PE's on IPO's post 2002 including NFLX, Salesforce, Chipotle, and Lululemon. Obviously, if your reference point is year 2000 and high PE then I get that excess.

The centurian is a tribute to my two mentors, one my boss and one my F-inlaw. That should not offend you. On the other hand, It totally respect your viewpoint as well. I only care about adding value to these message board based on my perspective.

I just read that 12% of facebook income comes from Zygna. That is impressive, they must have dumped a lot of money into facebook over the years.

SFace says

Based on Thomas' logic, Facebook would be massively overpriced when Microsoft valued them @ 15B on a private transaction three years ago. Clearly that is wrong.

That is why im saying FB is overvalued.. The logic was very sound on the part of MSFT.. you may not know what to do with something like FB, but you dont want the competition to get them either. So you inflate it beyond any possible way for FB to get acquired. Its a poison pill designed to backrupt the acquirer.

$300M for say 1.6% share in FB isnt much a material amount for Microsoft to actually lose. They sneeze more that each day.

Now that there is a exit, that investment for everyone else who pitched in has to have a big return.. but its already inflated thanks to MSFT.
And there will be blood...

SFace says

including NFLX, Salesforce, Chipotle, and Lululemon

They came out in dinky valuations.. Sales force went out at 15 and dropped to 11 before reaching 125+ many years later. Same with Netflix..
they were only a mail based DVD rental lighly valued before growint.. there was no way to spin/inflate this business..

The advantage facebook has right now is that it can find new ways of creating revenue. It's like google back in 2000. They came up with a model that made them boat loads of cash. However, over the years, they've figured out how to create reallly big boatloads of cash out of it.

Facebook right now is making money, but the potential there is massive. However, as it stands right now, advertisers are getting very little bang for the buck. The thing with Internet advertising is that you can get exact numbers. Newsprint you can claim for every person who brings in a coupon, 50 others forgot it at home. Who really knows? It's easy to fudge those numbers. Advertising online is far different. It's possible to see exact impacts to your numbers, visitors, how much traction you get, how often they return, etc. Facebook is doing a horrible job in all of those metrics.