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Problem is, when you hit 1 billion users, you've run out of "exponential growth" headroom. All you can do is multiply that by 6.5ish (therefore, linear growth), and even finding new sources of revenue doesn't get you exponential anytime soon.

Certainly, most future growth will come from extracting more cash from the pool of users (or people selling to them), not growing the pool.



I agree that most future growth will come from extracting more cash from their current pool of users, but I can imagine a situation in which new sources of revenue would lead to exponential growth.

The world economy has never seen anything quite like Facebook before -- that's why it's so exciting. They could become Google/Netflix/LinkedIn/Zynga combined. I'm not saying they will, but they've got the prerequisites: 1 billion active users.


They could become Google/Netflix/LinkedIn/Zynga combined

Or they could become the next AOL/Myspace/Friendster/Ning combined... (IMNSHO, that's at least as likely as the former).


Facebook has pretty accurate data on 1 billion people. They have not even scratched the surface of how they can monetize it. Think about the equivalent of Google Adsense, syndicated across the entire world wide web, but targetable by detailed and fairly accurate demographic and psychographic profiles. Now layer in the social elements to help marketeres "earn" impressions.

There is a fairly strong chance they will own an enormous % of market share of ALL online and mobile display advertising in the near future.


I think the telegraph, telephone, and internet where both similar to and far larger than Facebook.


User count is only one dimension of the value that Facebook has. The user connections are arguably the more important dimension.

As Facebook figures out more ways to be a more pervasive force in people's lives, they'll have the ability to multiply the revenue they receive on a per-user basis.


I think there's plenty of opportunity for exponential growth in Revenue. When we start measuring that in users, I think something is broken.


The problem is that Facebook's primary asset is users. They're making money off of them(approximately $1/user in profit and $3.5 in revenue), but it's not clear if they can make exponentially more per user.

They certainly can't expand the user pool by that much, which means that they need to find a way to monetize their existing users more effectively. I think that Facebook can certainly make more/user than they currently are. $5, maybe $10/user is possible. But $100? I don't think so.


Hard to imagine exponential growth in what either users or advertisers are willing to pay. An analogy to FB as a user service might be, say, MMORPGs like WoW. They seem to exhibit early exponential growth due to peer pressure. Yet they are never priced more than $10 - $15/mo. Often they start out as a subscription service and then move to free-to-play.

So then are advertisers willing to increase their FB advertising budgets exponentially? Does FB have something coming down the pike on a regular basis to make that happen?


Virtual goods. It is a proven revenue model for social networks.

http://venturebeat.com/2009/03/19/the-worlds-most-lucrative-...


The link is from 2009, the title is "The world's most lucrative social network? China's Tencent beats $1 billion revenue mark".

That doesn't sound to me like a "proven revenue model" to support a $104B company with exponential growth.


Soo... Facebook Gold? ;)


Netflix makes over $100/user/yr of revenue. Why couldn't Facebook?


Those who are already not on facebook are either too poor to make FB significantly richer or care enough about their privacy that that they have chosen not to use FB.




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