What is facebook stock worth?

[disneysteve]

FB has a lot of momentum--ie a lot of folks already signed up and using it. Maybe it's not a fully formed commercial venture, but I think there is still a lot of potential.

I think that's true. Since I started using FB, I've definitely seen it grow and mature and expand as far as how it is being used. Remember, it started as a way for college students to connect. It really took off when they opened it up to everyone. Us 40-somethings have lost touch with a lot more people than an 18-year-old has. I find it to be a great tool for connecting with people. I can't tell you how many people I've used FB to contact when I didn't know their e-mail address.

I certainly wouldn't write them off quite yet. As they find more and more ways to use the service and connect with other companies, I think the income will develop.

[Slug]

This really baffles me. Do companies really find that advertising on sites like this accomplishes anything? Are there that many users who buy things as a result of seeing them advertised on facebook or other sites? I barely even notice the ads and would certainly never click on one.

WSJ did a really nice piece on this. Here's the link. Not sure if you can read it if you aren't a subscriber.

[bjl584]

I certainly wouldn't write them off quite yet. As they find more and more ways to use the service and connect with other companies, I think the income will develop.

The issue that I see is that Facebook has the feel of something that is a fad. Even if Facebook figures out how to develop better revenue generating methods with its advertisers, the whole premise still depends on the number of users. If Facebook loses its cool factor the way that Myspace and the countless other defunct or fledgling social contact sites, then advertising won't matter. People will have found something better and cooler to do online, and Facebook will go to the graveyard of long gone and forgotten web sites.

[BigTimeTrader]

poor management

Facebook is getting a lot of complaints right now about the "timeline" format. It's gonna be interesting when they get replaced by a new company. I had a feeling their stock would plumit like that. Way too overvalued IMO.

[dontgopoor]

The value of Facebook is in the user data and the ability for companies to target ads based on the characteristics of both the user profile and the activity profile as captured by browser cookies. I've covered this in recent writings. I've also posted about a few recent stories on this subject in G+ and twitter. The tween to 25 year old crowd receives a lot of attention from marketers because that group is still forming brand loyalties. Hence, that's why advertisers like fb at this point. Of course, they'll need to convert eyeballs into sales. But online sales keep growing. Mobile device penetration keeps growing. Smartphone and tablet use keeps growing. Will be interesting to see. I've read that the largest tranche of stock with sales limits can be sold in November - will be interesting to see the price then.

[disneysteve]

The issue that I see is that Facebook has the feel of something that is a fad. Even if Facebook figures out how to develop better revenue generating methods with its advertisers, the whole premise still depends on the number of users. If Facebook loses its cool factor the way that Myspace and the countless other defunct or fledgling social contact sites, then advertising won't matter.

MySpace certainly never caught on the way FB has. Everyone I know, from teens to senior citizens, has a FB account and most of them use it regularly - daily in fact. I think it has moved beyond "fad" or "cool factor". It has become a staple, a part of their daily routines, as much as checking their e-mail. That doesn't mean it won't fade away and be replaced by something else - it probably will at some point - but I still think it is very possible for FB to click and figure out how to monetize the service successfully.

[Nika]

I bought 200 shares today.

I think it has potential. I was not interested at the IPO, but now the price is not bad. It is part of existence for majority of population and right now it does not have any competitors.

[Chart_oasis_man]

Hi,
You mentioned almost all risks that could cause FB price falling. Here are some more:
*September is coming and stocks usually do not perform well in September...
*Rate of mobile users is rising. This means that less and less users can be targeted by ads.
*It is quite hard to increase the number of ‘quality users’. Almost every potential user in USA and Europe have Facebook account. China does not allow FB.
Yet there are things that can support FB price:
*The average of fair price told by analysts is far above current levels. (Ok, I don’t believe them either...)
*The price is already halved. It may be ‘oversold’. Some correction may come in short term.
*FB has a lot of valuable information. Maybe they just need time to turn that into money. (OK, they already had 8 years for that...)

[disneysteve]

*Rate of mobile users is rising. This means that less and less users can be targeted by ads.

That's an interesting point. I don't frequently access FB on my iPhone because it is old and slow but my wife does it all the time and my daughter does it on her iPod Touch. Currently, there is no advertising on the mobile version of the software, though it wouldn't be hard to add it. Plenty of apps have advertising. For now though, you're right. The mobile version is ad-free.

[Chart_oasis_man]

I am not an internet marketing guru but I think mobile advertising is not an easy topic.
I am sure that FB's mobile version does not contain ads because of a reason and not because 'they accidentally forgot to implement it'.
I think advertisers did not get used to the mobile media.
*Small display and small banners makes it harder to compose well-readable message.
*Landing pages are not mobile optimized in many cases.
*If the ad is OK, and you want to buy something, you may be unable to complete the buying process of small web-shop on a mobile device. You have to remember the site and order on PC. There's a lot of technologies that do not work on iPhone / iPad / Android, too.
*There are wares I would not buy on a mobile device.
This is rather a problem with advertisers than a problem with Facebook...