You do know what they say about opinions being like assholes. Everyone has one. So without further ado, here are my opinions about yesterday’s Facebook filing …
Here are facts I know about Facebook and/or the Internet
- Facebook has about 850 million users
- There are about 2.1 billion Internet users
- Google has about 1 billion unique visitors a month
- About half of all facebookers (facebookies?) access via a mobile device
- A bunch of other random stuff I learned from FB’s filing today
- AAPL has a price to sales of a little over 3
Here are opinions I have about Facebook and/or the Internet
- True Internet penetration and engagement (at least weekly use) will probably be about 85% of the worldwide population by 2030.
- Email is still the most important application on the Internet. If something replaces it, it hasn’t been invented yet. (Sorry Twitter, I still love you)
- FB private message is a walled garden email service
- Walled gardens don’t work (contrary to what some are saying, fb as a whole is not nearly the walled garden that an aol once was)
- The idea of a personal “page” for each Internet user will always need to exist in some form. This will never go away.
- The Like button truly is an incredibly important invention
- Facebook is blogging made easier.
- Facebook’s economic moat is not substantial.
- Facebook’s advertising annoys me already
One big problem Facebook will have moving forward is: You can’t buy my love. And when you try, it makes me love you less. I love the authentic. When you start working too hard at it, you are less so. How does that relate to Facebook? Their advertising offerings – which are different (than Myspace, than Yahoo) – often involve getting right up to that blurry line of authentic and bought. When someone tells me they’re going to give me $3 off an appetizer if I can show them I liked them on facebook, how much has that like become worth. $3 today. Nothing tomorrow.
People need to contribute though. They will put their thoughts and pics and links to articles and locations and opinions somewhere. On that, you can rest assured. Right now, FB has got that on lock.
My opinions on what this does for Facebook from this point forward:
- FB will quadruple users in ten years (remember, that is far more people than are currently on the Internet)
- FB will be able to extract twice as much revenue per active user in ten years than they do now
- Growth prospects for FB in 10 years will make them look frighteningly mature
Therefore, if I’m right, Facebook’s revenue grows eight-fold over the next ten years. Seems like a huge number, right? If they are worth 100B on 4B in revenue today, they could be worth $800B on $32B in 2022. Nope. The price to revenue looks more like 4 by then. They will be far more mature. That means your $100B company today is worth $128B in ten years. I expect better investment performance out of homebuilders.
Of course, serious innovation could make me sound like an idiot here. But I don’t understand how they seriously innovate shy of making social one with the platform. The platform, dear friends, is not Facebook. That platform is everything. And nothing gives me better access to the platform than Google.
I started this post because @tguerrero54 pointed out a Venture Beat tweet about Facebook v. Yahoo from a valuation standpoint.
Yahoo is that online newspaper, right?
Two somewhat related thoughts: Has anyone else’s wife completely forgotten Facebook in favor of Pinterest? Second, VC’s truly are the smart money. By the time it gets to IPO, the value has been extracted.