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back to article Facebook's mega-billion-dollar bubble ... will it float?

So just how much is Facebook going to be worth by the time it eventually IPOs? Given that prediction, especially about the future, is very difficult, who knows? If we take recent movements we can still come up with any number we like: "As for the valuation spurts, Facebook was said to be worth $23bn in June 2010, nearly as much …

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Silver badge

It will go up initially in the short term...

...and degrade slowly in the long.

Possessing personal info does not pay unless you use it. The more they use it to generate cash, the less the value of the stock.

Their stock valuation is "optimistic".

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Happy

Prediction based on Insider knowledge

Facebook is going to go IPO only in 2015 when their valuation is expected to be close to a trillion dollar.

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Silver badge

2015?

By 2015, Facebook will be a "Oh, I remember them" company like MySpace and Bebo. Their income is based on advertising and their advertising is based on being fashionable today. That won't last; it never does.

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Anonymous Coward

not so sure

MySpace and Bebo are forgotten but that's because Facebook is more popular/compelling. I would expect FB to be around as long as social networking is popular and that's likely to be a while.

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Meh

Bankrupt thinking

>>Capital was undoubtedly wasted. If it had all been spent sensibly we probably would now be better off.

Maybe it was. Money lost isn't destroyed, you know. It just ends up in someone else's pocket.

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Silver badge

Re: Bankrupt thinking

That's fine if you assume the money supply is fixed.

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well I guess

Google do all they do off the back of billions of ad dollars (it seems so hard to believe, I mean who actually clicks Google ads, apart from no one?), so Facebook is just crazy enough to work.

People will go to google, search for facebook, click some ads, then go back to google and search facebook again, click some more ads, then go back to google (third time lucky), search for facebook, click the facebook link, then go on facebook and click some ads.

It's a fate worse than death, but if these people with, shall we say, "special digital needs", are injecting ad money into the IT industry then long may it live. The bandwidth it takes to deliver 1 high def Youtube video to me probably cost about a thousands ad clicks that some loser had to sit in his house doing all day, while I just block the adverts. I feel great, Google is coining it in, and an underclass of suboids is clicking adverts sunrise to sunset. Celebrate good times.

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Syd
Boffin

The bicycle & courting

> The bicycle has been called the greatest contribution to the health of the working classes ever: it allowed courting outside the home village for the first time

This is a myth, according to Prof. Kevin Schurer (University of Essex Dept. of History) who knows far more about these things than any normal person should!

People married outside their village plenty in the Tudor period - there were exceptions of course, in particular communities, but in most places people would commonly marry up to 100 miles away... although rarely in the NEXT-DOOR village, oddly - presumably because of local rivalries!

(Have summed-up years of Prof. Schurer's research in a few lines - hope I haven't misrepresented it too much!)

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Bronze badge

Happy to bow to superior knowledge

Although here where I am in rural Portugal we've two villages both called Ferreiras about 4 miles from each other. So the local story goes (no, no idea!) there was only one but it became so inbred that the local landowner split it, moved 50% of them down the road and then hoped for the best.

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Headmaster

Railways

I don't know of any railways that actually made a profit on passenger transport. It's always been the icing on the freight cake.

What it did do was give the companies a strong political position - when it came to begging for special access/subsidies.

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Railways/Freight

'xactly so. Freight was the cash cow. Once the majority moved to the roads then the railways were effectively bust.

Interesting to note something similar happening with the Post Office and BT... Competitors siphoning off the more profitable parts of the business result in the rest of it running at a huge loss and requiring subsidy.

Its always possible for private sector competition to run *part* of any public sector service at a profit, but the total result as regards the whole operation may be unsatisfactory...

Working in the public sector I remember with considerable amusement a new deputy chief executive coming from a private sector company telling us about the wonderful improvements he'd made to profitability at various companies by just stopping doing those activities that were unprofitable... I wonder, I thought, what will happen when you discover that in the public sector you don't have the option of stopping doing things that are unprofitable/unreasonably expensive to do?

The answer, it turns out, is that you resign under a cloud and sod off leaving chaos behind you having pocketed large sums of exaggerated salary because you must receive a private sector level salary...

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Paris Hilton

Whose pockets?

[[>>Capital was undoubtedly wasted. If it had all been spent sensibly we probably would now be better off.

Maybe it was. Money lost isn't destroyed, you know. It just ends up in someone else's pocket.]]

Exactly - and typically it's the "smart" pockets that gain this "lost" money. They've no interest in stopping this system.

Facebook may be worthless a couple years after it IPOs. Will the underwriters likely lament this? Or the existing Facebook investors, including the employees?

Paris - because she knows when a morning-after was totally worth it.

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Flame

Personally...don't thinks it's worth squat.

Wish it...and all the other "social networking" sites would implode ASAP. Can't stand these lame sites.

They have done nothing but breed a society of dullards.

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Paris Hilton

Economics 101

First off money is wasted by bad investments. The people who worked for stupidandoomed.com had their efforts wasted. A bit like NHS computing.

Second. Markets are price discovery mechanisms which reward good decisions and punish bad ones. They automatically weed out the bad judges of value as they lose their money and give heavy weighting to good judges as they now have the bad judge's capital with which to vote.

Third. The secret of investing well is to ask; What and where is the underlying value? So don't assume FB is worth more than Tesco. It ain't.

Paris because all her films sell briskly. She's a lot smarter than some people think.

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Bronze badge

I'd rather invest in failbook

As long as Facebook continues to prosper, there will be an infinite number of idiots providing fodder for our amusement at this face book mocking site. Given the rather significant amount of just plain stupidity, the people who run this site have struck gold.

As for the long term viability of FB, I'm sorry I don't have quite the rosey dispositon that most of the investors have, because all of the "social sites" seem to have a viability of maybe 5-7 years before people lose interest, in lieu something more shiney.

As another poster very astutely mentioned, while the IPO price may spike initially, it will probably start to decay, until it's de-listed from the NASDAQ (or where ever it's registered). So, yeah, a few select investors will probably make a killing, but anybody who holds on to the stock long term will get screwed.

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Silver badge

Not sure I follow

"The first social network, Friends Reunited, is said to have caused a bubble in the divorce rate) to the benefit of the next generations' genes."

How does the next generation benefit from being from a broken home because mummy or daddy decided to screw an old squeeze?

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Angel

"How does the next generation benefit from being from a broken home"

a lady from the council comes round and gives them BISCUITS

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FAIL

Their model is based on advertising revenue????

So how many ads have you seen on your mobile facebook app? I have seen exactly none.

If the world is moving to mobile devices then their model, along with many other sites do not work.

So would I invest in them. Hell no. They would need to rectify this ASAP or they will be going the way of the DODO!!!

Facebook = Deadbook unless they move their ass. Same fate awaits many...

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