Comments on: Why Facebook won’t go public http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Vijit http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-31896 Sun, 16 Oct 2011 01:49:27 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-31896 @OnTheTimes I believe you think that Facebook has a static business model by sticking with just social media. If your assumption is correct, I agree with you. However, I believe Social Media is just their entry point into the enterprise, much like how Google and Yahoo used search to get there. Just look at how Facebook is already expanding their reach simply by pushing their single sign on brand to sites even like Reuters. For that reason it is understandable why he is so upset with Sean Parker for wanting to ditch Facebook’s exclusive login rights to Spotify and its music. No I think Zuckerberg has much bigger plans and I think he has the goods to go after Google and even Google knows it.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22845 Sat, 08 Jan 2011 00:35:50 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22845 I seriously doubt they have 500 million users… I bet most of those accounts are inactive.

Even if they do, I can’t see how they turn that into $10/year of revenue.

Finally, their expenses are significant. They would need more than $5B in revenue to justify a $50B market cap.

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By: sditulli http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22802 Fri, 07 Jan 2011 16:50:25 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22802 I think this valuation is somewhat reasonable. Zuckerberg reminds me a lot of Bill Gates. They also have similar products that have built themselves into the architecture of technology with network effects and economies of scale.

Facebook isn’t disappearing. Most users have hundreds of friends, large amounts of photographs stored on the site. Its difficult for them to en masse leave on social networking site for another so I think Facebook has staying power. And social networking sites have real value to people especially those who read sites like this who have studied abroad, worked abroad, gone to college far from home, moved around, etc etc. Its the easiest way to stay in touch at least a little bit with people that at one time were close associates/friends that you no longer can see on a regular basis.

I have no idea though on valuation as monetizing the site is still difficult. But they do have 500 million subscribers with a 50 billion market cap. If they can make $10/year/subscriber then this will be a 10 p/e.

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By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22744 Thu, 06 Jan 2011 08:30:43 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22744 paintcan, how are they “colluding”?

Also you think many companies have market cap equal to their tangible assets? What do you think the “tangible assets” of Google are or Microsoft?

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By: paintcan http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22742 Thu, 06 Jan 2011 07:30:11 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22742 As it stands GS and Facebook are colluding along with a limited number of private investors to claim that Facebook is worth 50bln. Isn’t it possible that an IPO would prove them wrong and the company is not worth what GS claims it is? There might be some enthusiasm at first but that could fade in the face of competition.

When these companies go under – their shareholders don’t have much in the way of tangible asset to liquidate do they? They are buying derivatives of an abstraction. Facebook is almost a virtual business with a few real offices.

If Facebook has significant office space it could be lease. But it seems that an internet company like Facebook could be run by employees who work from their own homes.

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By: Pedant http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22740 Thu, 06 Jan 2011 06:46:23 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22740 An IPO would give Facebook a short-term cash infusion at the price of a long-term loss of control. If Facebook is a cash cow worth milking (and it is, though IMO the fifty billion figure is ridiculous), Zuckerberg and friends will be better off keeping the cow and selling the milk than selling half the cow.

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By: johncabell http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22738 Thu, 06 Jan 2011 04:11:27 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22738 But … and this may be a very dumb question.

Aren’t all the people investing at this moment assuming that a $50 billion valuation is a bargain? What will drive a higher valuation — let’s limit it to the Goldman Sachs Golddiggers — that makes the investment savvy?

Can a relatively illiquid market (one open to only ultra-high net worth individuals) do that? Or are these new investors buying at what they hope will be pre-IPO bargain prices? Would they otherwise, i.e., would they put up $2 million to get a upside potential based solely on privately-reported earnings?

Sorry, that’s about 17 dumb questions.

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By: themerv http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22736 Thu, 06 Jan 2011 01:57:55 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22736 “right now, it’s in the highly enviable position of having the exclusive ability to parcel out Facebook shares to its own clients”

There are other companies that offer the ability to trade facebook shares.

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By: FelixSalmon http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22735 Thu, 06 Jan 2011 01:40:07 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22735 @TomLindmark, no matter what happens to the value of Facebook stock, Zuckerberg will always be dynastically wealthy. He has no need to cash out.

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By: Danny_Black http://blogs.reuters.com/felix-salmon/2011/01/04/why-facebook-wont-go-public/comment-page-1/#comment-22733 Thu, 06 Jan 2011 01:10:51 +0000 http://blogs.reuters.com/felix-salmon/?p=6816#comment-22733 Ocala123456789, Am glad that FB doesn’t need Wall Street, I guess Zuckerberg is talking up to 2bn from GSIP because he is bored.

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