Over-priced at launch, but is Facebook over-rated?
Around lunch time today, in the US, the Facebook share price dipped to about $29.50 after large volumes of shares were traded on NASDAQ.
That's a big fall from the initial IPO price which valued the company at around $100bn, if only momentarily. Today's price puts the value of Facebook at about $63bn.
But, how much is it really worth, and will it go the same way as MySpace?
Facebook has taken the high-risk route to success, for example, by harvesting excessive amounts of personal information, and by rushing out new features with little consideration for testing, and user feedback. The new Timeline feature is disliked by some, and of course, there is no dislike button!
But, potential serious problems lie with the ways in which personal data is collected and stored, and exactly how the company will stay profitable when all it does to generate income is display advertising - not exactly innovative, and already provided by Google elsewhere.
Facebook must be serving-up huge numbers of pages everyday, to millions of people, including video-playback. All of this, can become very expensive, especially with 900 million users who rarely click on ads, or care for the commercial side of Facebook.
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