by tom moodyComments Off on zucker-eyeballs valuation
Those hoping that Facebook might actually die have assumed it would happen because "the kids" moved to another platform, as happened with MySpace. Ten years later, here we all are...
Financial pundit Mark St. Cyr thinks it might happen for a different reason -- advertiser disillusionment. He compares turn-of-the-millennium AOL with present-day Zuckerland and sees many similarities on the ad-oversell front.
Facebook is, for all intents and purposes, an advertising tool for advertisers only. It derives nearly all its revenue from advertisers. i.e., If there’s no advertisers buying on Facebook – there’s no Facebook. Regardless of how many free “users” sign up.
Pretty simple construct, but imperative to truly contemplate because it’s not that FB provides anything that people truly need. It’s just an outlet connecting eyeballs. And it is those “eyeballs” which are the product. And as soon as advertisers begin regarding 2 Billion eyeballs as being not worth more than two-red-cents, because nobody is buying? That’s when $Billion dollar valuations begin to plummet.
"Plummet" is a word that looks nice in proximity to "Facebook." Hey, we can dream, can't we?