CurtPalme.com Home Theater Forum

**Curt Palme**

..saw The Social Network last night, the movie that everyone is faving about. With a pretty much no name cast, and Justin Timberlake, a film about Facebook appealed to me as I read an article in Rolling Stone last year I think that was pretty fascinating, but I really wasn't expecting too much from the flick.

Go see it! I put this movie in my top 10, OK, maybe top 20, and will definitely buy it. As an entrepreneur and having been self employed for 25+ years, this movie really hit home as a little guy done good. Timberlake can actually act ( Shocked

), and was well cast for the part he played. Thoroughly enjoyable.

Now.. here's my question that even my g/f who is employed in the IT industry couldn't explain:

At the end of the movie, they said that the owner of Facebook is worth $25 BILLION dollars. Damn! However...they have no customers, and sell no product.

the movie shows that investors floated Facebook, but now that it's up and running, where's the return on investment, let alone the capital to float the 100s (?) of staff they must have at this point? I know they run ads, but I've never clicked on one.

I know Kal gets small residuals from the ads on this website to offset the cost of running the site, but does a company the size of Facebook get $5.00 per click instead of a penny or two? Do the clicks really add up to the amount of funds needed to float the Facebook payroll? Would anyone really pay 1 Billion, let alone $25 Billion for Facebook today?

As someone that has never dealt with large corporation dollars, this befuddles me...

greg_mitch · Joined: 03 May 2006 Posts: 5198

It's ads.

http://www.businessinsider.com/how-does-facebook-make-money-2010-5

http://www.insidefacebook.com/2010/03/02/facebook-made-up-to-700-million-in-2009-on-track-towards-1-1-billion-in-2010/

And a very small portion from facebook gifts, etc.

**kal** · Posted: Mon Oct 04, 2010 1:52 am Post subject:

I would imaging that Facebook sells advertising space directly to whomever wants to advertising. They don't use Google Ads or anything where they subscribe for the service. This means it goes to whomever is willing to pay.

So yes, they do make 100% of their money off ads, and because of the volume of traffic they get, people are willing to pay big bucks. Just like Greg mentioned.

But why the big $$ numbers? It's all about the number of eyeballs.

When you're a member of facebook, just about any action you take is all about notifying everyone else you know on facebook that "something happened" which then makes your 500+ friends go look at what happened. That's what it's all about. It's all about getting you back constantly. Someone had a birthday. You get an email. Someone wrote on your wall? Gotta go look. You've been invited to such and such event... go read about it. I bet some people load up facebook hundreds of times a day, either through a computer, mobile apps, phones, whatever. That's a lof of eyes.

Look here at Facebook statistics: http://www.facebook.com/press/info.php?statistics

Some of the numbers are mind-boggling:

emdawgz1 · Joined: 14 Mar 2006 Posts: 7304

I've seen the preview for this film 3 times.... i Swear...I almost fall asleep every time.

Good director, Great writer.... i have ZERO interest.

Tom.W · Joined: 09 Mar 2006 Posts: 6368

The Facebook mom filter. Only $3.99 from SNL ... Wink

http://www.hulu.com/collections/511/184577

WanMan · Joined: 19 Mar 2006 Posts: 9668

Curt, the Facebook business model is no insane than the ringtone craze of that freaking frog/troll a couple of years ago. You have to remember who the target customer is, and then remember to think low on intelligence.

ert85 · Joined: 12 Nov 2010 Posts: 7

It's also about how much the site as a whole is worth... not necessarily its revenues. Up until a year or two ago, Facebook was not profitable. With even its outreach to 500 million + members, which a lot of people might dispute how unique those 500m might be, Facebook ads network isn't really that appealing to most... still a lot of businesses do rely on Facebook API... which allow them to tap into or use Facebook as a member base.

huggy · Posted: Tue Dec 21, 2010 11:24 pm Post subject:

Facebook had some appeal personally which I got over very quickly,I cancelled my account recently and sometimes watch the status updates from my wifes FB account.
This is pretty much it;

Bored housewife--I'm cooking pasta tonight....yippeeeeeeee!

user1- you go girlfriend Smile

user2- don't over cook the pasta Smile

user3- I'm cooking Lasagne....yippeee for me too!

user4(me)--go f*ck yourselves!

So on and so forth.......

Dave

HogPilot · Posted: Wed Dec 22, 2010 12:44 am Post subject:

huggy · Posted: Wed Dec 22, 2010 2:38 am Post subject:

ChrisWiggles · Posted: Mon Jan 24, 2011 3:27 am Post subject:

It's also huge because it is a GOLDMINE for advertisers because there is nothing more valuable than targeted advertisements. Talk about being able to target any market sector you want with pinpoint accuracy, Facebook basically OWNS the personal life of anyone on FB, all their interests, friends, associations, all of it.

Businesses pay fortunes for access to databases like this. Right now they're raking it in purely (AFAIK) with ads. But wait until they start selling information about their users.

Scary for me to think about, actually.

**Curt Palme** · Posted: Mon Jan 24, 2011 3:31 am Post subject:

Good point, but I don't know about you guys, I have never clicked on any ad that I see on any web page, unless I've accidentally moved my cursor on it. I do that more on my toolbar, I keep getting some site on South America when I actually want to go to Craigslist.

The only exception is spam in my inbox. I'm actually going to order an LED light from China due to spam from them, but that's the only one in 10 years.

**AnalogRocks** · Posted: Mon Jan 24, 2011 3:40 am Post subject:

Shame on you for paying the spammers Curt!

Yahoo mail went all to hell a couple of years back when the added...er....add's I called them and told them in no uncertain terms that it would be a cold day on Mars when I would click on a single god damned add they put in my mail box and that they should get the adds god damned gone! And I never have.

F*ck assbook! I have curtpalme.com Laughing

ChrisWiggles · Posted: Mon Jan 24, 2011 8:44 am Post subject:

HogPilot · Posted: Mon Jan 24, 2011 1:01 pm Post subject:

joshe · Joined: 11 May 2011 Posts: 2 Location: Palmdale

You do not have to click on the advertisements for them to pay out. They pay to be there are they are investing to be there. Unconsciously, those advertisements really work. You may not be part of the group who would really take the time to read and notice those, but people do. I think that corporate people, who are really mindful of their money, would not invest to something that would not work.

**AnalogRocks** · Posted: Thu May 12, 2011 3:18 pm Post subject: