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timshea

timshea
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  • Facebook: Bored Teens Surface In Full Force [View article]
    1. FB owns Instagram. (Seems your daughter and her friends have left FB for FB.)

    2. The question for an investor is (a) Is this trend real? (b) If so, does it matter? (c) And, if so, are there offsetting trends that matter just as much or more?

    Those would be logical points to consider. The author presents one survey and some anecdotes for (a). He doesn't quantify (b), other than presenting a vague "domino" theory. He ignores (c) altogether.

    It probably not realistic to expect that any company will have rising engagement across all demographics at all times. FB has come closer than most to that holy grail. Do you know of anyone who has come closer?
    Nov 5 05:57 PM | Likes Like |Link to Comment
  • Why Mobile Monetization Is So Critical For Facebook [View article]
    Actually, I see the opposite on Seeking Alpha.
    Nov 5 05:43 PM | Likes Like |Link to Comment
  • Why Mobile Monetization Is So Critical For Facebook [View article]
    @Brucejfern It may be that ads annoy. Whether ads, or user interface features, Facebook has made numerous mistakes. My friends grouse about them frequently. On Facebook.

    Actually that's one of FB's key strengths. They screw up, but people show up anyway. To me, that suggests there's something compelling there.

    Any "new kid on the block social media company" is going to need revenue, eventually, to survive. Your point seems to be that (a) someone will appear who can provide a better social networking experience, and that they will (b) steal away a significant portion of FB's billion member user base, and (c) will succeed at this with no known source of revenue (i.e. ad free). How will they obtain revenue? Membership fees (see how that's working for $ANGI)? It's possible, of course, but it would be a more convincing argument if there was a viable competitor you could point us to.
    Nov 5 05:42 PM | Likes Like |Link to Comment
  • Facebook: Bored Teens Surface In Full Force [View article]
    Valuation and teen usage are different issues. In writing this article, you put your eggs squarely in the "teens hate facebook so it's doomed" basket. You can't then backpedal to say "Even if I'm wrong on my primary thesis, I still don't like Facebook". Not with much credibility, anyway.

    You might have made a cogent argument around valuation. You didn't.

    Instead we get prescient gems like this: "The overt focus on monetization helps revenues now, but it will undoubtedly cause users to flee." Undoubtedly? According to whom? That argument would be true for any business based on on ad revenue. Google is doomed too, then, by your logic. Twitter also.

    It seems you have collected only that evidence which supports what you already believe, and presented it to us as analysis. #confirmationbias http://bit.ly/LkalQ5
    Nov 5 04:59 PM | Likes Like |Link to Comment
  • Facebook: Bored Teens Surface In Full Force [View article]
    Your prediction is that teens will abandon FB, and it will then collapse. Your arguments for this prediction are:

    1. You aren't making many new friends on Facebook.
    2. You prefer Twitter.
    3. You read a survey about teens on FB from Piper.
    4. You saw a 13 year old girl on CNBC saying Facebook is boring.

    Against this, we have continued and rapid growth, and blowout earnings. I.e. real-world data.

    Anyone can predict. Flip a coin, you’re right half the time. Check out this list of incorrect predictions http://bit.ly/LNgvGh . You’ll find some great company. “There's no chance that the iPhone is going to get any significant market share.” – Steve Ballmer, 2007.

    The question is: Do you have any real insight or alpha for us on FB? You do give DAUs and MAUs for FB, but not Twitter. The FB numbers you show trend upward quite nicely. Not a single hiccup. And FB’s advertising story is just getting started. So those MAUs and DAUs turn into $s at a multiplying rate. (The FB quarterly numbers suggest this.)

    Of course some teenagers don't think FB is cool. It's not. A lot of teens thought MySpace was cool. So were UGG boots. Things change. True value remains. Social connection provides value people want. The company that makes that simplest, and has critical mass, will do great. FB numbers to date support that.

    Yes, MySpace failed. So FB is sure to? Many companies have predecessors that failed. Ford. Boeing. Google. Doesn't mean the successor fails too. (See “association fallacy” http://bit.ly/OmFULO, the principle upon which much of your argument is based.)

    Twitter and FB do different things. So, I can't have a blender and toaster in the same kitchen? Most people I know spend more time socializing on FB than Twitter, simply because it’s more understandable and approachable, and does more of what they want. Twitter is great too, but for different things. Do you want a margarita? Don’t use a toaster.

    Nothing in life is sure. To say you have personally divined how this will pan out – in light of the evidence you present -- is hubris. Sorry. Long FB.
    Nov 5 04:39 PM | Likes Like |Link to Comment
  • Sell Facebook: Eerie Comparisons To Yahoo, Circa 2007 [View article]
    It's true that Google ads are based on my search terms (+ additional criteria the advertiser chooses). And search terms can reveal lot. Like flu trends. Google is a fantastic company with a wonderful business. Long $GOOG.

    On the other hand, Google doesn't know who my friends are, what they like, or what I like about what they like. Google wants to be a social hang out. It isn't. Very few people generate social content on Google directly. On Facebook, that's the point. YouTube, is another story, like Instagram, or Flickr is to Yahoo.

    People do very different things with Google vs. Facebook. Advertisers will find ways to exploit the opportunities on each. FB's value grows not just with # of users, but length of history with the site, and level of engagement. That's interesting in different and (I hope) profitable ways. The Q3 & Q4 numbers bear that out. The bear analyses I see seem to ignore these points. Long $FB.
    Nov 1 11:55 AM | Likes Like |Link to Comment
  • Sell Facebook: Eerie Comparisons To Yahoo, Circa 2007 [View article]
    Dude. That was such a well-written article. You scared even me.

    @henckley, great points, well stated.

    Your analysis leaves out what these products ($FB $YHOO $GOOG) actually do. That matters.

    Your analysis conflates macroeconomic events with company performance. Many equities tanked in the dot com crash. Q: Why didn't Yahoo rise again? A: Google (2004 IPO). Google provided far superior search. A blank screen with a text box. Google segregated ads from search results. So people trusted those results. There are many reasons why Google prevailed, but most have to do with a superior user experience. (See the book "Googled" by Ken Auletta.)

    Yahoo isn't for social connection. Facebook is. Google is about making the world's information accessible. Facebook is about making your friends accessible, but more generally, reversing the decades trend of social mobility and fragmentation. (See the book "Bowling Alone".)

    Recently a friend made a donation through Kiva. Showed up in my Facebook feed. Now I'm receiving payments on a cow from a farmer in Ecuador. Around 2008 I entered "Rickie Lee Jones" as a musician I liked, wondering what Facebook would do with that. 2013 I see an ad in my news feed. She's making a comeback album, is doing a Kickstarter-like thing to fund it. PayPal accepted. I'm there. The more symbiotic advertising becomes, the more effective it becomes. Things like this don't happen to me on Google+ or Yahoo.

    Yahoo or Google may serve me ads that are appropriate, sure. And I'm a fan of both, and use parts of each intensively. But they don't have access to the same depth of information about me and my social network. A body of information that grows every day. That’s the alpha I see in Facebook.

    Many babies have Facebook pages. And an increasing number of my deceased friends and relatives. (Some are still posting status updates.) Everyone on FB has a timeline that goes back to birth. Your analysis fails to take into account the value of accreting information.

    So if "alpha" means something we understand that others don't, you kind of need to include something about the nature of this company's product in your analysis.

    In your previous article (also well written), I posted a link to a chart comparing $FB to $GOOG, IPO+512 days. It provided a contrasting view to your thesis. No reply.

    I also pointed out how you really need to take Metcalfe's Law into account, in terms of potential impact on value (Gotta respect the guy who invented Ethernet). The value of a communication network grows with the square of the nodes. FB is a social communication network (and many within). Not only does Metcalfe's Law apply, but there's also a growing history of communications and relationships over that network that are archived. A very interesting academic study published recently in which researchers predicted which people on FB were couples, and which couples would stay together, and why. How? By analyzing social networks.

    When I see a black (or white) take, and ignoring contrary data, I suspect confirmation bias. You make good points. But there's more to the picture. And you ignore those points. You may be right. The FB bulls may be right. I honestly don't know. Stock prices are driven by many things. But I'm willing to make a long-term bet on FB, as one egg in my basket, based on what I believe is its alpha (above).
    Nov 1 10:28 AM | 2 Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    This is kinda how I see it:

    In the right corner, hailing from Forrester Research, is an online survey. In the left corner, hailing from the real world, aaaand straight from a Round 1 KO in Q3, are the blowout $FB Q4 results.

    Plaaaaace your bets.

    Ding.
    Oct 31 02:15 PM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    That report is based on an online survey of opinion. Not performance. Respondents were asked "How satisfied are you with the business value your company has achieved by using each of the following marketing channels?" (1 = very dissatisfied, 5 = very satisfied). 3 would be neutral.

    Google: 3.62
    Twitter: 3.57
    Facebook: 3.54

    1. Respondents are satisfied in all cases (3.54 > 3). Not sure why that's so damning, but okay.

    2. The difference between Google and Facebook satisfaction is 2.3%. Between Facebook and Twitter, 0.8%. Do those difference strike you as large?

    Not saying FB advertising is great or will even work. I am saying the upside potential is large, if it can be made to work. $FB has the luxury of trying lots of approaches (as do $GOOG and Twitter), because people keep coming to the site anyway. Eventually they will get it right.

    10 years of history about someone's preferences and social activity is very valuable to advertisers. The longer someone's timeline grows, the more that value grows.
    Oct 30 02:05 PM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    1. Most television, radio, and print ads "don't work" by your criterion.

    2. Click through rates are typically < 1%. You'd need a larger sample size to tell much.

    3. Most advertising-based businesses would be out of business without advertising.
    Oct 30 10:40 AM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    @waikikigigi I agree with your points about human connection.

    FB has made many mistakes. People show up anyway. To meet a basic human need (connection). Which gives FB time to eventually get it right.

    Do not underestimate the power of looking up one's old high school flame. Google is similar (benefit = finding information -> background check on said flame).

    For many people, email is becoming a secondary channel for messaging between social connections, with FB becoming primary. Not that everyone doesn't have other email accounts. It's about engagement.

    Another thing Wall Street doesn't understand is when things get bad, FB traffic goes up. War in Syria? Lots of FB traffic. Budget chaos in Washington? More FB traffic. It's like a social VIX.

    Good luck with your nest egg. Stock price is based on sentiment. Nothing's for sure. Hope you've diversified.
    Oct 30 10:32 AM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    hahaha - sorry, didn't realize there would be suggestive ads at the bottom. Should have picked the .png-only version. Anyway, check out the chart.

    The Media tends to cherry-pick for drama. I.e. "100% runup!" vs "up 32% since IPO". Adds to the "social media high flyers" story.

    If stock price is expectation of future growth in value, then expectations for $GOOG were quite high. And correctly so.

    This normalizes for equal "value" at IPO, which probably is not the case.
    Oct 30 09:56 AM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    Earlier in Oct, I looked at $FB vs, $GOOG valuation at IPO+512 days. Here is a chart comparing stock price and p:e.

    http://bit.ly/17rCZwU

    p:e isn't my favorite metric. But it is interesting to compare the changes over time, normalized.
    Oct 29 10:57 PM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    Sorry, typo. It IPOed at 38. Bought $25 and $35 calls when it was in the low 20s. Buying at $17 was a great move. Congrats.
    Oct 29 02:17 PM | Likes Like |Link to Comment
  • Facebook Is No Google: Sell This Overvalued Mega-Cap [View article]
    Sorry typo, $30 should be $38.
    Oct 29 02:05 PM | Likes Like |Link to Comment
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