I logged into Facebook this morning to check out what my ‘friends’ had been up to for the last – ooh –17 minutes or so. Someone had bought themselves some kippers for breakfast while another mobile update stated that they were not getting up until later and someone else ‘liked’ that.Not the most riveting interactions with people I went to school with 20 years ago and would avoid in the pub, but the voyeuristic nature of the site (I’m a nosey bugger) is undoubtedly addictive.It is one of the first sites I and indeed most of us go to when we log on, and is the most visited site of 2010 as stated by SE Land.So around the time of the release of the film The Social Network, at the end of which the monetary value of FB was stated as $25bn, there was speculation by many market analysts that you could add another $10 – $15bn on top of that. Goldman Sachs then step in with a valuation of $50bn! These are the top five biggest internet companies by market capitalisation (source: The Times):

This is based on the (projected) income from advertising. There’s little doubt that FB will make their money and make their shareholders happy in the short term, but my issue is whether advertisers, as they test this platform to reach customers, are going to get the ROI they need.With Ads not solely powered by search but a host of information based on age, gender and interests, the argument that this is targeted advertising is not totally flawed. But just because I’m a 33 year old male who has a birthday next week, does not mean I want to see pop-up ads for Go-Karting or Paintball.Searches in FB are done for reasons of inclusion (joining fan pages or clubs) or looking up old friends (or old flames, or enemies). The site’s functionality is not one of information that would necessarily influence a buying decision or purchase, so when I see the valuation nuzzled between Amazon and Ebay I question this judgement. I know Goldman Sachs is an experienced firm and hey – bankers rarely get it wrong (!?)  – but with this vast price tag is it a micro bubble waiting to burst?If Facebook were a country it would be the third largest in the world after China and India and what a weird place it would be. People you used to sit next to in French lessons decades ago would be muttering their every thought and action while you suffer an onslaught of baby photos.The site is here to stay and as I finish this piece I’m aching to get back to see who is taking their dog for a walk or what they are having on toast. Addictive and entertaining, but only time will tell if this is money well spent for its advertisers.

Facebook and the 50 billion bubbleI logged into Facebook this morning to check out what my ‘friends’ had been up to for the last – ooh –17 minutes or so. Someone had bought themselves some kippers for breakfast while another mobile update stated that they were not getting up until later and someone else ‘liked’ that.Not the most riveting interactions with people I went to school with 20 years ago and would avoid in the pub, but the voyeuristic nature of the site (I’m a nosey bugger) is undoubtedly addictive. It is one of the first sites I and indeed most of us go to when we log on, and is the most visited site of 2010 as stated by SE Land. So around the time of the release of the film The Social Network, at the end of which the monetary value of FB was stated as $25bn, there was speculation by many market analysts that you could add another $10 – $15bn on top of that. Goldman Sachs then step in with a valuation of $50bn! These are the top five biggest internet companies by market capitalisation (source: The Times):

This is based on the (projected) income from advertising. There’s little doubt that FB will make their money and make their shareholders happy in the short term, but my issue is whether advertisers, as they test this platform to reach customers, are going to get the ROI they need. With Ads not solely powered by search but a host of information based on age, gender and interests, the argument that this is targeted advertising is not totally flawed. But just because I’m a 33 year old male who has a birthday next week, does not mean I want to see pop-up ads for Go-Karting or Paintball.Searches in FB are done for reasons of inclusion (joining fan pages or clubs) or looking up old friends (or old flames, or enemies). The site’s functionality is not one of information that would necessarily influence a buying decision or purchase, so when I see the valuation nuzzled between Amazon and Ebay I question this judgement. I know Goldman Sachs is an experienced firm and hey – bankers rarely get it wrong (!?)  – but with this vast price tag is it a micro bubble waiting to burst?
If Facebook were a country it would be the third largest in the world after China and India and what a weird place it would be. People you used to sit next to in French lessons decades ago would be muttering their every thought and action while you suffer an onslaught of baby photos. The site is here to stay and as I finish this piece I’m aching to get back to see who is taking their dog for a walk or what they are having on toast. Addictive and entertaining, but only time will tell if this is money well spent for its advertisers.