Facebook making profits www.bbc.co.uk/news/business-12135320

I watched Amazon for many years, and would avow it was a gone case. Realise this was an online business of selling tangible books, founded before and survived the dot-com bubble, transforming to a logistic company for selling all kinds of consumer products.

But after a whole 9 years, Amazon turned a profit in 2003 and every year since then; AMZN share price rising almost 500% over the period with a gravity defying P/E of 75 (Walmart trades at P/E of 13) Then there's the Kindle and long list of acquisitions - I was proven wrong!


But not so with Ayisi Makatiani's and Amolo Ngweno's Africa Online, started in Kenya in the same year as Amazon. Considering two of the founders were in MIT and the only lady founder in Harvard, it is not surprising they adopted the same venture model as other dot-coms.

Africa Online expanded into Africa in a very big hurry, was listed, founders departed, and subsequently delisted. Granted the company brought Internet to Kenya and made the founders some money; but prove my scepticism right - Hard to make money if you first learn the habit of living on handouts.


So the jury is out on Facebook, famously credited for introducing the social age of the Internet. As with all things, time will tell. Here's an interesting opinion piece from CNN, that reminds us of days of AOL, Myspace etc:
Facebook hype will fade

@Muganda facebook is unique and will outlive any of its critics, with its millions of users facebook is fast becoming the most sought after advertising platform let them bring facebook email i will say goodbye to gmail...waaah connecting with friends and reading my email at the same time will be awsome...i believe ecommerce is the next big thing in Africa as African economy grows at a rapid pace, poverty will become a thing of the past and Africans will live busier lives thus more will turn to shopping online, it was just last week when i saw a trader loose a sale because the Mzee who wanted to buy a hard-drive couldn't use his debit card.

Meanwhile in other news: "Facebook Will End March 15th!"

WeeklyWorldNews, PALO ALTO, CA –Mark Zuckerberg announced that Facebook will be shut down in March. Managing the site has become too stressful.

“Facebook has gotten out of control,” said Zuckerberg in a press conference outside his Palo Alto office, “and the stress of managing this company has ruined my life. I need to put an end to all the madness.”

Zuckerberg went on to explain that starting March 15th, users will no longer be able to access their Facebook accounts.
http://weeklyworldnews.c...will-end-on-march-15th/


Facebook is yet to respond: http://abcnews.go.com/Te...s-web/story?id=12575856

Facebook is valuable, but not 50billion dollars valuable. It just doesn't add up. Goldman Sachs which did the valuation is itself valued at about 88 billion. GS will probably be book running - with such a high valuation, imagine the fat fee slice? I was reading somewhere about an alternative view of a valuation ...not evaluating the value of a single stock, but the whole lot. Hypothetically, if you had 50 billion USD, would you sink it all into Facebook?

I think what we are forgetting is that this is the perceived value, ie if Goldman Sachs were to recommend a price for FB it would be $50b. Just like when you buy a 3bdrm apartment in Kilimani for Shs20m to collect rent of 60k. What you are buying is the future potential, after all FB started with zero users and in just seven years they have 500m users, now project that. I read somewhere that they get more hits than CNN in which case they are worth more than CNN (not to mention CNN and all major networks including Kenya are FB subscribers)

Remember the Dot Com Bubble?

FB is still around http://edition.cnn.com/2...mor.mashable/index.html


Yeah info on the net is believed by many but has many falsehoods.Check out Embu on wikipedia and you'll be shocked at the lies being peddled on the net http://en.wikipedia.org/wiki/Embu_people

Implied valuation is USD 65B following a secondary sale to investment firm 'General Atlantic'

Here's one analyst's PoV

Links:
http://community.nasdaq....tion.aspx?storyid=60634

http://www.trefis.com/company?hm=AOL.trefis

As a VP at a major financial services firm in the US, let me make it very plain:

NONE of it adds up. It's all lies, bluster, preening, and a bunch of hot air that keeps the US and UK markets afloat. As long as people are willing to play the game, the juggled balls stay in the air.

At the end of the day, even if a company makes "x" amount of money, corporations in the US change what they actually do very often- they love to take the lions share of money and throw it at the market, or build up (and hide) huge amounts of debt doing so. You really never know what tomorrow is going to look like. And us in the US know that the hard way, after what I'll call the "Great De-correlation" that started during the .com bubble, in which companies balance sheets and real profits started having no real effect of the stock price. Everything became emotional. The CEO farts, and the stock drops. He has a wet dream, it shoots up. It has become worse that Las Vegas. From that point on, it was all crap. Even bank money isn't backed by deposits anymore. The beautiful way that Kenya requires a percentage of deposits to actually exist??? LOL, there isn't even cash in most US banks anymore. Cash? What's that? The market works because noone asks for their money or liquidates their securities... they spend it before they earn it or reap the dividends, so it never has to be paid! Ponzi! The fungibility of the dollar is based on China keeping the purse strings loose, and everyone else in the world's acceptance of it.

Valuation... It's like this Picasso, an original that I asked a senior Financial Services exec about, who shall remain unnamed:

"What's that Picasso in your office worth?"

"Whatever some f***ing fool will pay for it when I sell it."

"So it's really worth..."

"...firesale value. Ink and canvas. Worthless, unless an influential someone thinks otherwise."

Not to say that there aren't good, valuable companies out there, but when they exists, the C-level execs run all the credit up, take home huge bonuses, offshore a bunch of jobs to make the balance sheet look good, and hide debt almost every time. Then, the analysts over-value the company, and you have things like this. Or Enron. Or Worldcom. Or Facebook. But facebook will be fine... because the government pays for that...

Besides, and this is on a serious note, Facebook is simply a way for fools to disclose private information about themselves, their friends, family, and associates, all over the world, with pictures, without a warrant. One of the cats I went to school with is a Senior Linux Engineer over there, and he tells me, and I have verified this, that the CIA pulls all the data over to their own servers, over three OC48s.

The next set of Wikileaks will include pictures from Facebook. 3D models, made from the multiple shots.

Spooky spooky! But that's the way the game is played here.

Hill