Facebook revenues are expected to come in around 200M for 2008 and facebook app revenues are well over 100M. There are several facebook apps earning millions a year and some over 10M a year. I’ve been pitched by some of the companies monetizing some of these things and the money is insane.
So what is facebook going to do when the apps revenue surprasses their own revenue? At that point will facebook become a Application Service Provider and will get the valuation of one?
December 31, 2008 at 7:04 pm |
what is an Application Service Provider? – are there any around?
my 2 cents is that as long as they generate money, for themselves or for others, it’s not too bad…
December 31, 2008 at 7:30 pm |
Can you provide sources for your data Marcus? Particularly for the Facebook revenue numbers, as I haven’t seen anything like that before.
I’m not discounting your credibility, just looking for more info.
Facebook is already starting to exact a price from App developers with the ‘licensed app’ initiative, though I think it remains to be seen if this will be successful.
From my understanding, Facebook shot themselves in the foot with the new design as apps are now hidden from most users. Connect could make up for this in the coming year. I am curious if Facebook apps saw a significant decline in installs and revenue since the launch of the Facebook redesign.
December 31, 2008 at 9:39 pm |
“Application Service Provider”?
That is funny. An Internet Service Provider charges for the “Internet Service”. Does Facebook charge the developers for a fraction of the revenue? Can Facebook legally or technically able to get a “tithe” out of the facebook Apps?(Sorry for using the religious word) Until Facebook sets up a system to get a royalty from App Developers like the Apple App Store(30%), the third party revenue shouldn’t be considered at all for Facebook valuation.
I am still eagerly waiting for next round of Facebook financing. The longer they wait, the lower the valuation will be. Right now I would be pleasantly surprised if they managed to raise more money at 2 Billion dollar valuation.(40 times their proposed 50 Million dollar EBITA in 2009)
Markus, your data is correct, but you miss the other side of perspective. 200 Million revenue is great, but if it costs you 250 Million dollars to make 200 Million revenue, it is no longer a viable business model.
January 1, 2009 at 4:57 pm |
Hear hear TS!! I think 2009 will see an unusual attribute being applied to social networks and other free sites – that is:
PROFIT
At first, social networks and other free sites were about landgrab – get as many users as possible to monetise.
Large sites like Facebook must have enormous infrastructure and staff costs – it’s very difficult to be genuinely profitable just from advertising. Revenue is great, but most of these sites have big costs.
I’d love to know what costs PoF has for their infrastructure.
Take a look at http://www.techcrunch.com/2008/12/20/diggs-sorry-revenue-stream-and-rumors-of-an-experimental-ad-product/
“So Business Week gets their hands on Digg’s financials and reports that the company had 2007 revenues of $4.8 million and losses of $2.8 million. The first three quarters of 2008 Digg had revenues of $6.4 million and losses of $4 million. That implies total 2008 revenue of $8.5 million, with $5.3 million in losses.”
How long can businesses like this survive in 2009?
January 9, 2009 at 2:37 am |
Marcus, I don’t believe those revenue numbers for a minute. I think they are making much less than they are letting on.