Facebook is going to launch an IPO sometime before April 2012. That’s pretty much a given. If you’ve read any financial site in the world this week you’re well aware of that. What most people might not be aware of though is the actual numbers at play here.
The big figure being thrown around is the $50 Billion valuation of facebook by Goldman Sachs. That’s a lot of money, so I wanted to look a little deeper at the figures and see what’s going on here.
In the first 9 months of 2010 Facebook earned $355 million profit on a revenue of $1.2 billion. That’s a great margin percentage, but it’s not a lot of revenue. Based on $1.2 billion in revenue, that means the $50 billion valuation of facebook is almost 50 times higher than Facebook’s revenue.
To put that in perspective, Google (over the same 9 months) made $6 billion in profit on $29.9 billion in revenue – yet Google’s current market value is only $196 Billion. That’s only 7 times it’s revenue, not the 50 times revenue valuation everybody is throwing around for Facebook.
TL;DR: either I’m terrible at basic math or Facebook is very overrated.
I’m actually a bit curious to see what happens when they DO file an IPO. The math alone tells me to stay away from this, but it IS facebook. The pundits (Scoble, Arrington, etc) are all blindly in love with it, and so is the Media. That tells me that this thing has the potential to skyrocket quickly. Whether or not that rocket will blow up and come crashing back down though remains to be seen.
What do you think?
January 7th, 2011
Over the weekend I was working on my newest site: Jersey Foul when I decided to try something different. Rather than use the custom coded platform that I use on Fail Pictures I decided it would be fun to see if I could create an entire site without actually typing one line of code. I restricted myself to only using “off the shelf” components and plugins.
I thought it would be hard, but it turns out that there really is a plugin for everything. I was able to build my entire site, with all the features of a failblog type site, basically just using a mouse. It’s amazing how far the web has gone. I remember hand-coding perl content management systems that stored everything in text files as recently as 1998. I can’t believe how simple it’s become since then. In fact, I almost think it’s too simple now. Having no barrier to entry can sometimes be a bad thing – but that’s an entirely different post.
Anyway, I half wanted to let everybody know about Jersey Foul (which, if you don’t know what a jersey foul is I have an explanation here) and half wanted to give a shout out to some very awesome plugins I found along the way.
Here’s some of the cool wordpress plugins I’m using on the site:
Advanced Random Posts let’s me pull the first image out of a random post and show it on the sidebar with a link back.
GD Star Rating does a great job of ratings and includes several widgets for the sidebar. It’s got a million customization options too.
SEO Title Tag is great for simply adding a different title to posts. I’m not sure I’m going to stick with it though as I like some of the features yoast’s wordpress seo offers – and the two don’t work well together.
WPTouch is probably the best “set it and forget it” way to offer a mobile version for your site. Plus, it even works nicely with adsense.
watermark reloaded is a huge timesaver. I never watermarked images on FailPictures.com because it was a giant pain in the ass. This plugin automatically watermarks all images I upload – and gives me control of how they should look.
Twitter. Can you have a blog without it? I’m using twitter anywhere, Twitoaster for twitter comments, and of course everybody’s favorite TweetMeme
I’m also still experimenting with some email to post plugins, and some auto update facebook ones too. If you’ve got a suggestion for a plugin (or anything else) that would be awesome on JerseyFoul.com let me know – I’d love to try it out.
Implementing this site was so easy (and playing with plugins was kind of fun) that I’m half tempted to redo FailPictures.com or start up another wordpress site just for the hell of it.
January 5th, 2011
