| Florian Cramer on Thu, 8 Mar 2012 23:44:57 +0100 (CET) |
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| Re: <nettime> The $100bn Facebook question: Will capitalism survive 'value abundance'? |
On Thu, Mar 8, 2012 at 2:21 PM, Mark Andrejevic <[email protected]> wrote: > So, according to Michael's numbers, to live up to its valuation, Facebook will need to quintuple its profits fast -- without alienating users. That will likely be challenging, especially at a time when its aggressive tactics have drawn a lot more attention to its legally suspect strategies (at least according to some recent court decisions). His estimate tracks with others I've seen claiming that Facebook will need to double its profits each year for the next couple of years. A lot of people (or a few people with a lot of money) are going to have to believe targeted advertising is worth the price for that to happen. These are very interesting calculations. But their bottom-line could be that seeking to increase its profits is actually not Facebook's priority. The real concern for the management and current investors of Facebook could be how much it will raise with the IPO, and how much time will be left for divesting into other assets. Facebook is in a comfortable situation because of its market share and the lack of alternatives for investments on the American stock market after classic manufacturing industries, real estate and the financial industry have all become non-options, with the tech industry remaining the strongest part of the economy, and Facebook being the only major tech company to go public and offer investment opportunity. Facebook's IPO is a programmed success regardless the burden of profit that it has to make in the future. The only question concerns the relation of 'smart' and 'stupid' money buying the stocks. But it smells a lot like a Ponzi scheme - the 'new economy' all over again - where those owning the company now can't lose, regardless actual business numbers. Florian # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mx.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: [email protected]