Bro dan agan

In 2007 Microsoft bought into Facebook with a cash injection of US $240 million and preferred stock options. Other investors followed, with up to $500 million in total being injected into Facebook over the last couple of years. It prompted the analysis that Facebook was valued at US $15 billion. But since the Financial crisis, $15 billion appears to be a significant overvaluation.

It all comes down to ongoing costs. If there is a market for advertising on Facebook, then there is no doubt that it will survive. But there is a query about its bank balance if the financial crisis continues. Because the massive growth in users costs money.

And if the revenue isnt there over the next few years, how do they balance the books? Hard to do when you keep going back to the banks to borrow money. Heading off to an IPO in this climate may not be a successful strategy either.

Long term advertising success also depends on the users. How much advertising will users accept as reasonable, without adversely affecting their positive Facebook experience? Its a delicate mix and one where Facebook developers have to be extremely careful.

Facebook users have shown that they want more control over the site. They react badly to poor development changes. And they are the first to query the site when they feel their privacy is at risk. The more advertising Facebook put on their site, the less likely some users are to go there.

If Facebook cant prove that they will have a long term future with advertising, the only options are to charge users to access the site, or shut it down. Where would Facebook users go then