Will GOOG Woes Push Facebook's Zuckerberg Out As CEO?
By Tom Foremski - January 31, 2008
In a conference call with financial analysts following its Q4 financial report, Google said it is having problems monetizing social network sites.
Google earnings miss Wall Street estimates By Elinor Mills News.com
... the company had trouble making money off ads on social networking sites, including News Corp.'s MySpace, Google executives said. Under the MySpace deal, Google is committed to paying revenue even if advertisers don't click on ads.
"We have found that social networking inventory is not monetizing as well as expected," said Chief Financial Officer George Reyes.
This increases the challenge for Facebook as it searches for a way to monetize its service without alienating its users. Microsoft's recent investment in Facebook values it at $15bn, raised the pressure on management to justify that valuation.
This is a challenging situation for any CEO of a large media business, especially a 23 year old with no prior experience. Figuring out a sustainable business model that meets Facebook's $15bn-plus valuation is a top priority for Facebook's investors.
They will likely seek to bring in a new CEO with more experience in the same way Eric Schmidt was brought in to Google.
Technorati Tags: facebook developer
Share with Bit.ly
January 31, 2008 | Permalink | Comment | Category: | Subscribe to SVW
- Top Stories:
- Socialbrite: Helping Non-Profits Master Social Tools For Social Change
- The Pressure Is On When Every Company Is Now A Media Company...
- Vinod Khosla: How To Succeed In Silicon Valley By Bumbling And Failing...
- Saturday Post: If You Are In The Path Of A Disruptive Technology You Are Toast - Goodbye Newspaper Companies
- SDForum Garden Party Notes: Vinod Khosla is the Antichrist; Jim Clark has a size problem; Silicon Valley Trophies - Hot women and large yachts...
- Traveling Geeks Trip Next Week ... Join Us In London!
- Bitten and Smitten: Why Journalism Is Like Falling For The Wrong Person
- Year One: The Lessons Of The Intel Insider Media Advisory Program
- UberCEO Survey: CEOs Of Fortune 100 Snub Social Media - None Blog, Only 2 Twitter
- From Big Blue To Big Brown - IBM Launches Green Services In Smart Sewage And Beyond
- Keeping It Real: PR's Real-Time Web Challenge
- A Saturday Post: The Internet Devalues Everything It Touches, Anything That Can Be Digitized
Comments (2)
"pressure on management to justify that valuation"
This continues to be the main issue. Does social activity really equate to business/corporate valuation? The approach of Facebook to generate users with the "revenue will come" perspective seems to replicate the failed attempts of start-ups past.
Posted: February 23, 2008 10:01 PM
Scott: You make a fair point... But because they are all startups, they all build something on the hope that "revenue will come." What other strategy can they have? MSFT determined that that valuation was fair because it made its own estimates of how much future value Facebook could generate. However, such a strategy could also be used to raise the bar for Facebook... I'm not saying that MSFT intended to do this for any nefarious reasons, but a small investment at a high valuation could set up any company for a performance expectation that increases its risk of failure.
Posted: February 24, 2008 11:32 AM