I agree with you entertainment is a cash cow. But FB is _free_ entertainment. As is your photo-album and the discussions you have with your friends.
You appear to be referring to future success. It's like Microsoft talking up "vaporware". It gets people's attention, maybe it convinces some to believe and some to invest, but it offers them nothing. Only a promise of some future of which no one can be certain.
We have almost two decades of web display ads and their effects on building brands. Advertisers are not too impressed. They have waited patiently for something that compares to a magazine ad. And no one has delivered. Maybe solving the context problem might not be so easy. Maybe a website is not a magazine.
Meanwhile people are looking for products and services via the web, with their credit cards in hand. And Google has been there to help advertisers reach them.
That's not some promise of the future, that's the here and now.
Facebook has real power for influence. And some of that can no doubt benefit corporations. But what Google offers is something much more direct and efficient. And it's not a pie-in-the-sky promise, it's proven to have worked year after year.
Facebook has no business model. They only have everyone's curiousity. And that's mainly because the "content" on FB is everyone's friends and family, not the type of packaged, commercialised "entertainment" you get from a magazine. FB is not a magazine. It's a photo-album. More specifically, it's a collection of personal photo albums.
It does have some added "features" to the traditional photo album. It comes with tacky, invasively personal display ads in the margin. And it comes with a team of "engineers" looking over your shoulder to log every photo you look at and every comment you make. And it's exposed to viewing by millions of strangers (this is totally unnecessary). I think we can have photo albums without all that cruft. And I think we will.
Facebook made almost a billion dollars in profit last year on gross margins of around 25%. They obviously have a business model and it's obviously working pretty well. Now--could they fail? Of course, but I don't see any reason now that they must fail, based on what we know now.
I find it kind of funny to see the complaints about Facebook's financial future...I'm old enough to remember when Google was a cool new free technology, but no one knew how the heck such a simple search engine was going to make money.
It really isn't "free" entertainment. There are many companies making lots of money (zynga for instance) selling virtual goods on facebook with FB credits. FB gets 30%. I'm not trying to say it's the same amount of money that google makes, but that alone is in the millions of dollars per month of gross profit.
You appear to be referring to future success. It's like Microsoft talking up "vaporware". It gets people's attention, maybe it convinces some to believe and some to invest, but it offers them nothing. Only a promise of some future of which no one can be certain.
We have almost two decades of web display ads and their effects on building brands. Advertisers are not too impressed. They have waited patiently for something that compares to a magazine ad. And no one has delivered. Maybe solving the context problem might not be so easy. Maybe a website is not a magazine.
Meanwhile people are looking for products and services via the web, with their credit cards in hand. And Google has been there to help advertisers reach them.
That's not some promise of the future, that's the here and now.
Facebook has real power for influence. And some of that can no doubt benefit corporations. But what Google offers is something much more direct and efficient. And it's not a pie-in-the-sky promise, it's proven to have worked year after year.
Facebook has no business model. They only have everyone's curiousity. And that's mainly because the "content" on FB is everyone's friends and family, not the type of packaged, commercialised "entertainment" you get from a magazine. FB is not a magazine. It's a photo-album. More specifically, it's a collection of personal photo albums.
It does have some added "features" to the traditional photo album. It comes with tacky, invasively personal display ads in the margin. And it comes with a team of "engineers" looking over your shoulder to log every photo you look at and every comment you make. And it's exposed to viewing by millions of strangers (this is totally unnecessary). I think we can have photo albums without all that cruft. And I think we will.