Facebook rejects $4Billion valuation
Interesting piece in VentureBeat today claiming that Facebook has rejected a valuation of $4 Billion dollars. The social networking site is the fastest growing social site in terms of numbers – Comscore estimated in January 2009 that it had over 276 Million unique users. In the UK 47% of the online community use Facebook with the fastest growing cohort in the 35-49 year old bracket. It has taken a lot of flak recently on a number of fronts. Firstly it changed the terms and condititions that users subscribe to, essentially turning ownership of all asssets and content (photos, videos, relationships) explicitly to Facebook. They rolled this back after a major online revolt errupted.
Most recently they have changed the user experience trying to make the site more real-time by introducing feeds from friends and subscribed sources. This change results in a lot more information being displayed to users, especially if those friends have active lifestreams connected to their facebook profiles. It is generally agreed that the new changes are good for businesses who want to ensure that fresh content is presented to users as often as possible (to keep their profile in front of as many users as possible) and very active social media participants. These changes have been seen as a play by Facebook to capture the ground stolen by the likes of Twitter, which offers real-time participation and also most recently be the beta version of friendfeed. However, the majority of Facebook users are not power users and consider excessive feed information as pure Noise and have registered their displeasure in droves. In a move to counteract this, Facebook have now made a semblance of reaching out to the public by courting their ideas on changes to the platform. But this has been circumscribed by a time limit and a quorom of 30% of the active Facebook community, which is unlikely to be reached.
That said, it is undoubtedly the big beast in the social networking space in 2009. MySpace figures are dropping – 2% since the start of 2009 accompanied by a lot of organisational distraction. Twitter is the only other site generating the same level of mainstream interest, but in terms of numbers is in around 14Million, which is no mean feat considering it had about 700,000 users this time in 2008.
It will be interestng to watch what Facebook does with its dominant position and likewise it will also be very interesting to see what happens with Twitter. Both of them face monetising issues. Facebook, for its massive user database generated only approx. 350Million dollars in revenue. Not a lot. Twitter still has yet to monetise itself. Most recently a lot attention was paid to the fact that they seemed to have sponsored applications advertised. But they have disabused the market of this saying that it was not the case. So the market looks on and tries to figure out what form of monetisation it will embark on.
