How much would you pay for Facebook stock?

Groupon had a very successful IPO a couple of weeks ago, which I don't understand for a company that loses, on average, more than $1 million a day. I would tread very lightly.

 

Facebook's value is that it has an absurd amount of information on 600 million people, and as online advertising evolves, Facebook will be at a huge advantage for its ability to target ads even more specific depending on what each of their users has volunteered as their interests, age, location, etc.

 

Groupon has filed its IPO paperwork, but it hasn't had its IPO yet, so it's hard to say how successful it is.

If any of you read TechCrunch, Groupon and other Daily Deals sites have been HAMMERED in recent days for how awful of a business model it is under the surface, and how it screws small businesses over bad.

LinkedIn had an alarmingly successful IPO but that's been the only tech company recently that's opened eyes. Maybe Pandora this week but that was tame compared to LinkedIn.

 

I'd short it.

 

FB's click-thru rate is lower than the average Web site's. I don't know where it stands on transaction coversions.
Further, FB has made it's ad revenue very public, but I don't what it's debt and shareholder equity situation is. I don't what it's real outlay is. I don't what it's tax obligation is.
Ad revenue does not tell the whole story.

 

Definitely. You don't want to invest without knowing the whole story and understanding the numbers you are looking at. But for a long time, the rap on them was that they weren't generating any revenue, and that's no longer the case.

 

Their click-through rate is REMARKABLY lower than most websites, which are already remarkably low.

But when you have 140 million unique visitors a month, you have enough page views to offset that.

 

How many people here only go to Facebook when they are at home on their own computer?

The more people have Driods and Iphones, and the Facebook app that comes with it, you will see a big spike in the website activity.

I pretty much was off Facebook until I got my Driod.

 

Do people really use it that, though?
If I want to find out about a product or service, I don't go to a company's Facebook page. I go to the company's Web site.
When I want to make a purchase. I don't use Facebook.

I honestly don't know how people in my age group use it. That is, aside from keeping in contact with friends. I hardly use it at all, personally.
I maintain the college's page, and we push out a lot of information that way. There are some real marketing applications, but they're specific. I'm skeptical of broad-scale marketing applications for it.
But personally, I hardly use it at all. And as a consumer, I don't use it at all.

 

If Facebook has a viable plan to create a system that would work as a conduit between consumer and business -- it's own PayPal-like operation or an integration of PayPal -- and use its vast amount of personal information to target prospective consumers, wouldn't a couple billion from an IPO fund that kind of operation? When Facebook opens its books when filing for an IPO, if its ad sales are close or break-even with its total expenses, then I think it could be a smart investment.

Even better would be a direct-to-consumer product that Facebook could sell, maybe something tied to its photo-hosting abilities.

There's plenty of ifs to be sure, but there's immensely more upside here than with LinkedIn, Groupon and Pandora.

 

There's more upside than LinkedIn or Pandora, to be sure.
Groupon, I'm not so sure. Groupon from the get go is targeted at people in their roles as consumers. People use Groupon because they want to buy stuff. You're not convincing anyone to buy. You're just influencing what they buy.

 

Groupon is getting a very, very bad reputation from the business end. They are going to have a hard time finding willing business partners in the future.