Facebook Schmacebook

Sahar sends link:

http://www.readwriteweb.com/archives/is_facebook_worth_the_hype.php

"This is really a good, telling article, especially the numbers. Note you have more visitors than they do, less overhead, longer track record, and I'm quite sure you make few cents more then they do :)

Sahar"

***FS*** Thanks sincerely for the link and compliment Sahar..  These folks have something else that you and I do not have..  a branded center..  I suppose we could create that by branding our landers as one core identity or renaming, but I'm not sure that's what our visitors want.. and it's not even necessarily that easy.  People 'seek out' the Facebook brand and I will concede that this does have value. However, I agree with you that the dichotomy between the perceived value of Facebook at 8 billion"ish" and a large portfolio of domains is striking and unbalanced..  this line in particularly resonated with me:

Quote: ""Facebook might have another problem: how to make money. In March, Valleywag reported that Facebook ads performed dismally for a number of media buyers, averaging a terrible 0.04% click-through rate. "Facebook was consistently the worst performing site on just about every campaign we ever ran with them," complained an anonymous advertiser to the gossip blog. Last week Reach Students confirmed the low 0.04% click-through rate (at least for flyer ads).""

8 billion for that!?  Yeah,  I want my grandmother in 'that' stock. :- /  ..  also poignant:

Quote: ""The Washington Post published an interesting article last fall shortly after Facebook opened up about a mini-exodus that was occurring from MySpace to Facebook among young users. ""

Exactly who is going to use Facebook when they aren't cool anymore is unclear at the moment.  Nobody NEEDS Facebook.. We need Google, we need email, we need domains..  Facebook..  not so much.

Chris Ward ads color:

""Regarding CTR's - Facebook is proving to perform just like FORUMS.

Anyone who has run a Forum for any length of time recognizes that the CTR from their dedicated users is almost nil. The ad revenue comes from looky-loo's who stumble upon the site looking for information.

Many (or is it all?) of Facebook's areas are not accessible to the casual non-registered public.  Therefore, most of the people strolling around the facebook.com estates become banner blind.  They are locals. They are there to "network" - "link" - "get noticed".  This type of focused user is usually Internet savvy - and exactly the type of user who is least likely to click on a "Refinance My Mortgage!" ad.""

Comments

[Jeff]

hard to beat that they pretty much have every college student in the u.s. as a member.....and millons of high school students

***FS*** They definitelty have the class of 07.. lets see if the calss of 08 and 09 still thinks they're cool.

[Chris W.]

Regarding CTR's - Facebook is proving to perform just like FORUMS.

Anyone who has run a Forum for any length of time recognizes that the CTR from their dedicated users is almost nil. The ad revenue comes from looky-loo's who stumble upon the site looking for information.

Many (or is it all?) of Facebook's areas are not accessible to the casual non-registered public. Therefore, most of the people strolling around the facebook.com estates become banner blind. They are locals. They are there to "network" - "link" - "get noticed". This type of focused user is usually Internet savvy - and exactly the type of user who is least likely to click on a "Refinance My Mortgage!" ad.

[Josh/Swerve]

We need Google, we need email, we need domains.. 

Facebook..  not so much.

=======

Josh:

Don't forget that facebook is really facebook.com, a domain/ website/ pizza pie in the sky.

My guess is you don't use facebook. Neither do i.

But, i've spoken to people who do, and they are pretty gaga about it. They find it stimulating and useful.
I'm from Toronto, and supposedly my town has the highest concentration of facebook signer uppers. Something like 630,000 here have signed up. Yikes.

At some point, my guess is a large number of people will likely get tired of migrating between social networks. The network/site that provides core/critical functionality, and is a place where most of your friends and work peers have accounts, is likely to retain a significant portion of people that signed up.

Is it facebook? I dunno. But it could be.

Facebook might be the ipod of social networks.

Or not.

:)

If it is becoming the ipod of social networks, then maybe 8 billion is reasonable or even cheap.

I will now duck.

[IPTV]

""Exactly who is going to use Facebook when they aren't cool anymore is unclear at the moment. Nobody NEEDS Facebook.. We need Google, we need email, we need domains.. Facebook.. not so much.""

We only need 2 out of the 4.

We need Google?

This is and has been the common perception of most everyone in the world.

But, The truth and reality of Internet Search is... Google needs domain & website owners to even exist at all.

How would google currently exist without 'using' the assets of others?

When you SEO a website and get that website indexed in google...no matter if it ranks #1 or # 1001...

Your still NOT 'using' Google...Google is 'using' you.

Let me ask a hypothetical question...

If there was currently no known way to index a website...yet all the websites in the world still existed...would we still "need" Google?

BTW: In my opinion...lol

Frank,

Thanks to your blog...I can try and express my views, hopefully to spark more than just a little thought. Much appreciated on my part.

We may 'need' google today...just not tomorrow.

I will stick with this subject (domains & Internet search)...do not even want to get me started on Facebook and Myspace....LOL

I will just say though...banks.com ~ frank.com ~ coke.com will never be 'uncool'....facebook.com, myspace.com...will not always be 'cool'

Peace to all,
Dan

[Paul Drago]

I need email for work it is true-- but as far as social interaction via the web is concerned, as part of facebooks target demographic (err..well I was until last year), most of my personal communication happens via social networks/IM clients in a lot of ways we don't "need" email. At least not for personal interaction-- and to write off facebook for not having a solid revenue model in place would be the same folly people commited with Google when they didn't have a decent revenue model in place. While, at present, their valuation is a bit high-- I don't see any reason why they can't grow into that valuation with one brilliant idea. (Where would google be without adwords/adsense?)

[owen frager]

Facebook will not survive. It's all about trendy like the Boca that Sahar also so loves that is waning in popularity to the new Lobster Chops. South Beach is full of such abandoned once proud clubs.

What will survive is the better Facebook, the one with a business plan: dotMAC rebranded and released to the masses ala Google. Stay tuned.

[Edwin Hayward]

A thought experiment, if you like...

One approach might be to find a second tier search engine that gives excellent, relevant results (some of the meta search engines are very good) and then partner with them to deliver search results.

Then pick a world-beatingly-fantastic generic as the core "brand" that you're trying to build repeat traffic around, and make every other (generic) domain essentially a "feeder" which triggers that particular search on your branded search engine.

For example, you call your fantastic search engine "great.com"

You feed traffic from lifeinsurance.com so that it does a search on great.com for "life insurance".

You feed traffic from "redleatherboots.com" so that it does a search on great.com for "red leather boots".

Repeat for all generic names (you could also auto-correct generic typos that you own to the corresponding non-typo search result).

The great thing about second-tier search engines is that they're pretty much unknown to the "general public" so there's little chance they've come across such "fantastic" search results before. Bingo, you're starting to build a super-strong search brand.

Repeat the above times a few million uniques a month, and you're doing three things:

A) Ensuring that great.com has significant traffic out of the starting line (which can be exposed to PPC ads nestled next to regular results) thus getting around the biggest chicken-and-egg problem facing any up and coming search engine: no traffic.

B) Branding great.com in the mind of every visitor exposed to its superior, Google-beating search results

C) Building recurring revenue streams by e.g. offering a search toolbar download which triggers more great.com searches (and more PPC ads) each time it's used.

NOTE: Great.com probably isn't a "great enough" domain - I was simply using it as an example.

***FS*** That's a good idea Edwin.. thanks.. *percolating*

[IPTV]

Hi Edwin,

Good post...as far as I know you and I are the only members here that have Frank "percolating* on this subject...LOL

I do not know if this is good or bad...but I am going to try and "percolate" right along until the pot boils over...LOL

This is my feeling right now...

The current perception of Google right now is that its a 'first tier' search engine and meta search and so called "2nd tier" search engines are...well 2nd tier.

In my reality right now...Google is 'already' a 2nd tier search engine and the rest are 3rd tier and below.

Take the very words 'Internet search'...this was fine 5-10 years ago...but its 2007 now. Who wants to feel like they need to "search" every time they want to find a product,service or specific information online?

A better way to describe what people really want or need from a 'starting point' on the Internet is: 'Internet navigation help'
All they want is the fastest, most direct assistance to help them locate something specifically for their needs at any given moment in time.

Google...does not come close to accomplishing this task well enough. Maybe 6 years ago it did...not now.

Doing a 'search' on Google now is like walking into a 'Target store' and asking a Target employee with a bad attitude that's only worked there for 2 days...were something is located, and they tell you aisle 1....and in reality what your looking for is on aisle 12...halfway on the other side of the store.

Lets try and look at it like this:

Take 'type in" traffic...(direct navigation) the cleanest, best, fast way to find exactly what your looking for, if the domain address is being use correctly and has information,products and services corresponding to the domain address.

Why is 'Internet search' currently so far away from what direct navigation offers?

Take a domain portfolio owner that owns 1000 domain address assets of 'loan' domains. Out of these 1000 domains he has one domain loans.com which he considers his best domain address asset. He builds a very high quality website on this domain asset. Out of the remaining 999 domain assets 499 of them get direct quality traffic from people looking for quality information on loan information,products and services. So, he redirects this traffic to his main domain asset loans.com.

Say with just these 500 domains they are making him $5 million a year....because of direct navigation.

Now, he has 500 quality loan domain assets that do not have any direct navigation traffic to them...what is he to do? Only half his portfolio is making him money...the searches done in Google for the remaining 500 domains could boost his income to over $15 Million a year. But how is he ever going to get them all ranked in the number 1-3 spots on Google to ever be able to extract maximum dollars out of these remaining 500 domain address assets....answer...his not.

And what about the 500 direct navigation domains that are making $5 Million a year? Is he going to be able to get these indexed in Google in the 1-3 spots to get the maximum income out of them?...answer...no

$5 Million sure would be nice...yet its still just a 'fraction' of the value being extracted from this domain portfolio.

This is not a very effective way of claiming what is yours. Its 'settling' for what you think is all you can get, because google specifically and Internet search in general has set up very arbitrary rules for 'Internet search". And not only are they currently dening you at least 100% more income from your domain address assets...they are making billions of dollars themselves off those same assets (in Googles case over 3 billion, every 3 months)

This just does not seem quite right to me. (sarcasm included free of charge)

The only ones I know of who are 1st tier anything...is domain address asset holders.

If you were playing poker and you just won the biggest pot of the night with a royal flush..beating a pair of 2's. And the pot was $1000

You would not just reach in the pot and take $30 dollars out and leave the rest on the table?

That's what is happening and has been happening for the last 10 years of this Internet search poker game. We (domain asset holders) all get dealt royal flushes on every hand, when Google and the rest of the players keep getting one pair. We win every pot...but somehow we only take a fraction of every pot we win...when the whole pot is ours to take.

I am saying this all can change pretty fast, if a couple of 'forward thinking' folks seat down and really examine what is and has been going on. It does and should not bee this way...its only this way now, because Google had a pretty good idea 'at the time'...that was 10 years ago...and I have a news flash...it was NEVER a good idea for us (domain asset holders) and its no longer a good idea...especially for The People! who use the Internet...still a pretty good idea for google and google only.

Enough we the analogies already...lol

Best,
Dan

[Andrew Johnson]

Facebook's CTRs are mentioned here -- but thats only the beginning. How does the traffic that clicks through actually perform.

I have never advertised directly on Facebook, but my friends have. The numbers are bad. Horrificly bad. One friend ran a campaign giving away free Superbowl tickets. No one entered the contest. Another advertised his *free* dating site. Out of 2000 clicks a single person signed up. In comparison, a free dating site being driven targeted traffic should mint 1 new member for every 15 or less visitors.

Markus Frind (http://plentyoffish.wordpress.com/2007/07/12/more-facebook-monetization-drama/) ran the numbers on this, if Facebook recieved $15 CPM it would amount to roughly $37.50 per click. Who is going to pay that? A more realistic number is a 5 cent CPM which amounts to 12.5 cents a click. I wouldn't even pay that much, but there actually is a advertiser market that would.

Facebook is banking on two things -- corporate buyers spending like drunks in Vegas. The other option is more intrusive & invasive advertising methods.

For alternate view, take a look at Myspace. The bulk of the banner ads are going to the "Win Free iPod" type of incentivized offer. This is bottom of the barrel ad inventory. Adsense advertisers which can be seen in Myspace's footer often go to PPC arbitrage sites. Occasionally there will be a "legit" business advertising which typical means the advertiser is not watching their ROI or content bids. I have had my Adwords advertising campaigns syndicate through Myspace and the performance is horrible for Myspace *search* traffic.

All of that without mentioning Myspace's big spam problem. Without a overhaul of the way Myspace works this is not going away.

The bottom line, both Facebook and Myspace are vastly over rated. That isn't always a bad thing, distractions are useful for the well positioned.