This Facebook Thing.

[Richard Hakluyt]

My mother is illiterate when it comes to the internet, but she is aware that she can get all sorts of things by shopping online. She therefore gets me to do her shopping for her and we settle up every quarter or so. The consequence is that the online advertising, amazon recommendations etc etc that I receive are completely buggered 

So some of this data, that is being valued at a very high price, is basically tosh.

[Sheilbh]

Buying a load of law textbooks ruined it for me.  All I ever got e-mails about was things like Chitty on Contract or Cheshire, Fifefoot and Furmeston's Law of Contract. 

I AM A HUMAN BEING!

[Pedrito]

Buying a load of law textbooks ruined it for me.  All I ever got e-mails about was things like Chitty on Contract or Cheshire, Fifefoot and Furmeston's Law of Contract. 

I AM A HUMAN BEING!

L.

[Gups]

Chitty  is surpringly well-written and human for a law book.

I don't do FB and I don't plan to, but I thought they were making quite a lot of revenue from the games they have on it.

[Richard Hakluyt]

The p/e ratio is 120 or so for a shareprice of $38. The average p/e ratio for American shares is maybe 12 or so; so the $38 is only justified if they can get phenomenal profits growth.

[Josquius]

One thing that both google and facebook are trying to do with their future strategy is go 'over the top' of the internet and/or OS'.

At first there were expensive bespoke computers- then along came dos which went over the top of them, destroying the business of the computer makers....then along came windows to go over the top of DOS, luckily there it was the same company doing it largely but IBM's stake in DOS was damaged even further hurting them (they were the big losers in computer prices being forced down too).
Now the idea is to go over the top yet again. To access the world through these websites.
Google is the one who has made the most headway with it with its various online google apps trying to make it so one need never  buy microsoft office and generally trying to muscle into everything your computer does. Facebook wants to go this way too, to be the one stop place for general computer use.

As I've said before social media as it stands today IMO is a bit of a horrible over the top fad. So many companies when wanting a new website made always want it to include some form of social media- not just integration with facebook/twitter/whatever (the sensible option....which is just where facebook wants to be) but their own little service.
Facebook is quite good in this in being a standard, heaven knows people hate remembering a bazillion passwords. Facebook would be wise to encourage more companies to have little customer review apps and the like rather than people having to sign up for a new account somewhere.
The trouble there is...a lot of people don't want their business on some websites and their business elsewhere to cross over. Heaven knows those little facebook buttons on porn sites make me paranoid that I might accidentally press them.


[/disjointed ramble mode]

[Phillip V]

The trouble there is...a lot of people don't want their business on some websites and their business elsewhere to cross over. Heaven knows those little facebook buttons on porn sites make me paranoid that I might accidentally press them.

Young people increasingly do not care about privacy. To increase profit, Facebook should work with public schools and celebrities to continue this trend.

[garbon]

http://www.nj.com/business/index.ssf/2012/05/investors_unfriend_facebook_st.html

Investors unfriend Facebook stock, shares plunge below $38 IPO price

Facebook Inc., the social networking site that raised $16 billion in an initial public offering, fell below its $38 offer price in its second trading day.

The shares dropped 11 percent to $33.88 at 10:40 a.m. in New York, after earlier declining as much as 14 percent to $33. The stock was little changed at $38.23 at the close of its first day of trading on May 18.

Facebook, with more than 900 million users, is trying to attract more marketers to boost sales as competition increases. The company, the biggest provider of online display ads in the U.S., is set to lose the top spot to Google Inc. next year, according to EMarketer Inc. The offering valued Facebook at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential. Today's slump reinforces concern that the IPO was priced too high.

"Investors are clearly recognizing the risks embedded in the stock," said Brian Wieser, an analyst at Pivotal Research Group LLC, who has a sell rating on the stock and doesn't own it. "It's just been priced for perfection at the IPO price, and that's clearly unrealistic."

Morgan Stanley, the bank that handled the IPO, stepped in to prop up the stock to keep shares from dipping below the offer price on May 18, said people with knowledge of the matter, who asked not to be identified because the purchases were private.

Shareholders 'Want Out'

"It looks like they're through spending their own money to support the price," Francis Gaskins, president of researcher IPOdesktop.com in Marina del Rey, California, said in an interview today. "Shareholders are lined up at the gate --they want out."

The IPO also suffered from trading glitches on its first day. Nasdaq OMX Group Inc. Chief Executive Officer Robert Greifeld said a "poor design" in software driving auctions for IPOs caused issues with Facebook's first trading day.

Morgan Stanley completed its role in the IPO auction at 11:11 a.m. on May 18, Greifeld said last week. Between then and 11:30 a.m., customers kept submitting cancellations and updating existing orders, putting Nasdaq's systems into a "loop" and preventing it from opening the stock, he said.

The IPO valued the Menlo Park, California-based company site at $104 billion.

Facebook is trying to adapt as more users visit its site through mobile phones instead of the Web. That put pressure on company executives to articulate their mobile strategy as they marketed the stock to potential investors ahead of the IPO. Facebook has said it would add mobile advertising along with new ads to reach users when they log off the company's website.

Ad Hurdles

Facebook still faces hurdles in traditional Web advertising. General Motors Co., the world's biggest automaker by vehicles sold, said last week it was halting display ads on Facebook, while maintaining brand-promotion pages.

Sales at Facebook, which makes most of its money from graphically based online ads, came in at $3.71 billion last year. That puts it below the top 50 U.S. technology companies by revenue. Google Inc., valued at almost twice as much as Facebook, reported $37.9 billion in revenue last year. Google jumped 18 percent on its first day of trading in 2004.

Facebook was the 11th U.S. consumer Internet company to go public in the past year, a stretch that began with LinkedIn Corp. With a valuation of $104.8 billion at the May 18 close, Facebook is worth more than three times the other 10 combined. LinkedIn, a social network for professionals, is second, valued at $10.3 billion.

"There are only so many people that are going to buy into a hyper-growth story," said Michael Pachter, an analyst with Wedbush Securities Inc. in Los Angeles, who rates the stock outperform and doesn't own it.

LinkedIn surged 109 percent last May after its IPO. Groupon Inc., the biggest daily-deal coupon site, began trading on Nov. 4 at $20 and rose 31 percent that day. Groupon's shares closed at $11.58 on May 18.

[Phillip V]

Media and chattering class seem to be hating Facebook right now. Time to dip a toe in and buy some shares today.

[DGuller]

My mother is illiterate when it comes to the internet, but she is aware that she can get all sorts of things by shopping online. She therefore gets me to do her shopping for her and we settle up every quarter or so. The consequence is that the online advertising, amazon recommendations etc etc that I receive are completely buggered 

So some of this data, that is being valued at a very high price, is basically tosh.

The dirty secret of data mining is that lots of data is garbage.  However, even scraping off a tiny amount of information from flawed data can have huge returns compared to firing totally randomly.

[DGuller]

Damn, sucks to see FB prices plunge.  I thought I had a unique insight into the potential of FB stocks, though that its prospects were bleak at that price, and was thinking of a way to short it.  However, it appears like I'm not the only one who is not quite overly optimistic about FB.

[Zanza]

The p/e ratio is 120 or so for a shareprice of $38. The average p/e ratio for American shares is maybe 12 or so; so the $38 is only justified if they can get phenomenal profits growth.

In their own words:

We expect our rates of growth will decline in the future.

We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue.

http://www.sec.gov/Archives/edgar/da...287954ds1a.htm

[Richard Hakluyt]

Exactly, I don't see where the ten-fold increase in revenue will come from.

There is also the fashionable nature of the stock, it could be a dead duck in 5 years time.

Anyway, I added to my portfolio recently, Royal Dutch/Shell, p/e ratio around 6, dividend yield about 6%, and oil never seems to go out of fashion.

[Admiral Yi]

Are all your shares granny shares Tricky?

[Richard Hakluyt]

Nearly all. I have some play money that I'm more bold with. I was also bolder back in 2009 when i felt that almost the entire market was grossly undervalued.