'CHRISTMAS WITH FRIENDS'
Parool, The Netherlands]
Financial Times Deutschland, Germany
Will Goldman Sachs
Bring the Downfall of Facebook?
will have to pull off the balancing act of becoming a conglomerate while
remaining innovative. Many other market leaders have failed to do this.
Admittedly, at the moment it's hard to imagine what new idea might bring about
the social network's downfall. … But neither did anyone at Yahoo or AOL."
Translated By Ulf Behncke
January 3, 2010
Germany - Financial Times Deutschland -
Original Article (German)
Slowly but surely, its growth
is getting scary: only six months ago, Facebook was valued at about $26
billion. And now, with Goldman Sachs coming on board, the social network's
value has doubled.
It sounds like the emergence
of a giant Facebook bubble. This suspicion is only partly justified. Certainly,
compared to the revenue of about $2 billion, this record valuation is exaggerated.
Besides, the number of users simply cannot continue to rise at the same rate.
However, unlike many
promising but failed companies that were caught up in the 2000 dot-com bubble,
Facebook has a working business model and makes a profit - through advertising
and revenues from network games. All the while, the site now attracts more
people than Google. A search engine's aim is to speedily send its users to
other sites. The social network, however, was designed for users to linger. And
along the way, user profiles are being built that are far more accurate, and
thus more lucrative, than Google's.
For the time being, this will
only pay off for Goldman Sachs investors. The U.S. Bank offers investors an
opportunity to buy into Facebook, without Facebook having to disclose its
financial data - and for that, Goldman will collect a handsome commission.
In addition, Goldman Sachs can
one day expect to launch the company on the stock market - and the higher its market
value, the higher the fee.
Posted by WORLDMEETS.US
If, however, Facebook is to
realize $50 billion or more, it must provide buyers a sound strategy about how
the company will achieve current investor fantasies. For instance, the
company will have to provide an answer to how it plans to conquer the huge and
still largely-untapped markets of Russia and China. Only such large countries
offer the potential to allow the number of users to continue to grow
Above all, Facebook will have
to pull off the balancing act of becoming a conglomerate while remaining innovative.
Many other market leaders have failed to do this. Admittedly, at the moment it's
hard to imagine what new idea might bring about the social network's downfall.
But neither did anyone at
Yahoo or AOL.
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[Posted by WORLDMEETS.US January 7,