Social networks are just a great foundation for a lot of other businesses. - I don't think so, nobody has come up with a good business model for social networks yet. Ads don't work, and if you try to harness the information held in profiles you get privacy problems. Beacon showed this clearly.
Also, I think that in reality there isn't as much brand loyalty as people think. Three years ago pundits said the same thing about myspace.
My position is that facebook is vastly overvalued - Gartner was just an example to show that even if they become the biggest in the field the income would still not justify their evaluation.
In fact Gartner has a market capitalization of 1.3 billion US$, meaning that facebook should be worth more than 12 times gartner. And Gartner has 4000 employees, 60.000 clients, and offices worldwide.
I think that in reality there isn't as much brand loyalty as people think. Three years ago pundits said the same thing about myspace.
I think that is the key issue. I'll drop Facebook like a rock if it becomes annoying. That's generally true of most websites: they can only be "sticky" if they are a pleasant experience.
Facebook is also easily disseminated. It doesn't really have a "core competency" so to speak. Most things that can be found on facebook can be found better elsewhere on the Internet. Companies that try to be everything to everybody get in BIG trouble (Microsoft).
I think I've mentioned this before here, but (for example) Friendfeed is a nice comparison: it lets people show exactly where and why and how it draws links together. Facebook puts all of this information into the same facebook bubble.
I had the same question. They have a PR problem that's probably cutting into their bottom line, but that's a long way from being unprofitable. If someone wanted to know which company I wanted the keys to, it would be the one that's make money hand over fist, not the one everyone thinks is really cool and is in the red.
What core competency do you perceive facebook has?
No, I'm not a fangirl of facebook. I've logged into my fb account maybe a couple of times in a dozen or so months. Sorry. You want to assault my karma for this? Puh-leeze.
I look at structures: overall structures and value-added structures. Facebook really has none. If you disagree, please tell me why and how you disagree this setup is theoretically "profitable" or more profitable than, say, a random Internet page or a blogger blog. :)
Also, I think that in reality there isn't as much brand loyalty as people think. Three years ago pundits said the same thing about myspace.
My position is that facebook is vastly overvalued - Gartner was just an example to show that even if they become the biggest in the field the income would still not justify their evaluation.
In fact Gartner has a market capitalization of 1.3 billion US$, meaning that facebook should be worth more than 12 times gartner. And Gartner has 4000 employees, 60.000 clients, and offices worldwide.