So how Facebook is worth more than AMD?

[AgaBoogaBoo]

Originally posted by: BrownTown
All I can say is that if Microsoft is claiming to be doing a very strict financial analysis on this trade then the "cost synergies" (omfg the word "synergy" makes me want to gouge my want to kill myself) they are expecting are alot more then the NPV of Facebook, because if you can show me somewhere where Facebook had contracts worth Billions of dollars I will be amazed. IF you want to think of everything your way then I would say that IMO Microsoft vastly overestimates the "cost synergies" associated with this purchase. Only time will tell.

That synergy word throws me off entirely and to be honest, I didn't understand your post. Could you rephrase it without it? I think we both hate that word, and it makes no sense to me at all.

 

[SagaLore]

WHAT?!?! Facebook was bought by MS? R.I.P. facebook.

 

[ponyo]

Anyone remember BlueMountain.com? ExciteAtHome paid like a billion dollars for that worthless greeting card site. That kid and his parents made out like bandits. I think they lived in Utah and ran for the mayor of a city with the new found monopoly money. What about Broadcast.com? Mark Cuban sold that worthless company to Yahoo near the height of the bubble for around 4 billion dollars. You can call Cuban all the name you want but he was no fool. He knew his company was worthless as were all the other dotcom scams and cashed out. He's one of the few who did so he deserves everything he has now. He was paid with Yahoo shares as part of the buyout and couldn't cash out immediately. He knew all this was a game and Yahoo was insanely overvalued so he bought puts on Yahoo as insurance for his Yahoo shares until he could cash out completely. Now he owns the Dallas Mavericks and lives the good life.

 

[AgaBoogaBoo]

Originally posted by: SagaLore
WHAT?!?! Facebook was bought by MS? R.I.P. facebook.

Only a small portion.

 

[Cattlegod]

Originally posted by: AgaBoogaBoo

Originally posted by: BrownTown
All I can say is that if Microsoft is claiming to be doing a very strict financial analysis on this trade then the "cost synergies" (omfg the word "synergy" makes me want to gouge my want to kill myself) they are expecting are alot more then the NPV of Facebook, because if you can show me somewhere where Facebook had contracts worth Billions of dollars I will be amazed. IF you want to think of everything your way then I would say that IMO Microsoft vastly overestimates the "cost synergies" associated with this purchase. Only time will tell.

That synergy word throws me off entirely and to be honest, I didn't understand your post. Could you rephrase it without it? I think we both hate that word, and it makes no sense to me at all.

Here is a quick and dirty example.

Manufacturer A makes cupcakes. Manufacturer B makes candy bars.

Both Mfg A and B sell their products in the same 400 convenience stores in a metro area. They each have 40 trucks to make the deliveries.

Mfg A buys Mfg B and instead of having 80 trucks, they liquidate all but 50 because they deliver to the same stores. Now distribution costs are lower (and overall costs to produce and deliver the goods are lower) because they are able to monopolize on a synergy between the two companies by putting both products on a single truck. This decreases overall costs between the two companies and thus increases profits above what each company is worth individually.

Microsoft has some skeeming plan that they are up to with the purchase of facebook and the bid for yahoo. What that is, only a few execs know, but they feel it is worth a price premium over the value of both facebook and yahoo.

 

[Deeko]

Originally posted by: CasioTech
who makes more money, facebook or myspace?


also, I didn't think anyone was using facebook and it looked like something that myspace raped in terms of sheer users/ad rev.

You didn't think anyone was using Facebook? Where have you been the past 5 years?

As far as who makes more - I would think Facebook. They have more mechanisms to make money built into the site

 

[AgaBoogaBoo]

Originally posted by: Cattlegod

Originally posted by: AgaBoogaBoo

Originally posted by: BrownTown
All I can say is that if Microsoft is claiming to be doing a very strict financial analysis on this trade then the "cost synergies" (omfg the word "synergy" makes me want to gouge my want to kill myself) they are expecting are alot more then the NPV of Facebook, because if you can show me somewhere where Facebook had contracts worth Billions of dollars I will be amazed. IF you want to think of everything your way then I would say that IMO Microsoft vastly overestimates the "cost synergies" associated with this purchase. Only time will tell.

That synergy word throws me off entirely and to be honest, I didn't understand your post. Could you rephrase it without it? I think we both hate that word, and it makes no sense to me at all.

Here is a quick and dirty example.

Manufacturer A makes cupcakes. Manufacturer B makes candy bars.

Both Mfg A and B sell their products in the same 400 convenience stores in a metro area. They each have 40 trucks to make the deliveries.

Mfg A buys Mfg B and instead of having 80 trucks, they liquidate all but 50 because they deliver to the same stores. Now distribution costs are lower (and overall costs to produce and deliver the goods are lower) because they are able to monopolize on a synergy between the two companies. This decreases overall costs between the two companies and thus increases profits above what each company is worth individually.

Microsoft has some skeeming plan that they are up to with the purchase of facebook and the bid for yahoo. What that is, only a few execs know, but they feel it is worth a price premium over the value of both facebook and yahoo.

How is it worth a premium of facebook alone and Yahoo? They placed a 45 billion dollar offer for Yahoo, and I'm sure that if Mark wanted to sell them Facebook entirely, they would have bought it.

All they wanted to capture was the advertising rights and they got that.

 

[AgaBoogaBoo]

Originally posted by: Deeko

Originally posted by: CasioTech
who makes more money, facebook or myspace?


also, I didn't think anyone was using facebook and it looked like something that myspace raped in terms of sheer users/ad rev.

You didn't think anyone was using Facebook? Where have you been the past 5 years?

As far as who makes more - I would think Facebook. They have more mechanisms to make money built into the site

I believe Myspace still beats them by a lot, but could be wrong.

 

[sniperruff]

Originally posted by: Cattlegod

Originally posted by: AgaBoogaBoo

Originally posted by: BrownTown
All I can say is that if Microsoft is claiming to be doing a very strict financial analysis on this trade then the "cost synergies" (omfg the word "synergy" makes me want to gouge my want to kill myself) they are expecting are alot more then the NPV of Facebook, because if you can show me somewhere where Facebook had contracts worth Billions of dollars I will be amazed. IF you want to think of everything your way then I would say that IMO Microsoft vastly overestimates the "cost synergies" associated with this purchase. Only time will tell.

That synergy word throws me off entirely and to be honest, I didn't understand your post. Could you rephrase it without it? I think we both hate that word, and it makes no sense to me at all.

Here is a quick and dirty example.

Manufacturer A makes cupcakes. Manufacturer B makes candy bars.

Both Mfg A and B sell their products in the same 400 convenience stores in a metro area. They each have 40 trucks to make the deliveries.

Mfg A buys Mfg B and instead of having 80 trucks, they liquidate all but 50 because they deliver to the same stores. Now distribution costs are lower (and overall costs to produce and deliver the goods are lower) because they are able to monopolize on a synergy between the two companies by putting both products on a single truck. This decreases overall costs between the two companies and thus increases profits above what each company is worth individually.

Microsoft has some skeeming plan that they are up to with the purchase of facebook and the bid for yahoo. What that is, only a few execs know, but they feel it is worth a price premium over the value of both facebook and yahoo.

well, streamlining wouldn't be their main purpose.. if you look at facebook, it is the second largest social networking site generating a lot of traffic, and yahoo has yahoo maps, hotjobs, yahoo finance, yahoo mail etc etc, none of which msn has major market share (except email)

unfortunately, i feel that the search engine and map wars are already won by google.

 

[Deeko]

Originally posted by: AgaBoogaBoo

Originally posted by: Deeko

Originally posted by: CasioTech
who makes more money, facebook or myspace?


also, I didn't think anyone was using facebook and it looked like something that myspace raped in terms of sheer users/ad rev.

You didn't think anyone was using Facebook? Where have you been the past 5 years?

As far as who makes more - I would think Facebook. They have more mechanisms to make money built into the site

I believe Myspace still beats them by a lot, but could be wrong.

In traffic, I think Myspace still has the lead - but that gap is narrowing. In terms of revenue? Hard to say, but it seems to me that Facebook has more ad options and methods of bringing in income, compared to Myspace.

 

[LeadMagnet]

Originally posted by: yamadakun
You didn't know pics of young females drinking in parties is worth more than circuits and transistors?

You need to look at Google's $165B market cap

 

[her209]

Its all about ad revenue people.

/Capt. Obvious

 

[CasioTech]

myspace is nothing but ads, facebook looks like it barely has anything bringing in revenue.

 

[Deeko]

facebook has a lot of ads, they're just more subtle - they also have the new applications feature which essentially encourages people to click a lot and view even more pages.

 

[sonambulo]

Originally posted by: Cattlegod
Here is a quick and dirty example.

Manufacturer A makes cupcakes. Manufacturer B makes candy bars.

Both Mfg A and B sell their products in the same 400 convenience stores in a metro area. They each have 40 trucks to make the deliveries.

Mfg A buys Mfg B and instead of having 80 trucks, they liquidate all but 50 because they deliver to the same stores. Now distribution costs are lower (and overall costs to produce and deliver the goods are lower) because they are able to monopolize on a synergy between the two companies by putting both products on a single truck. This decreases overall costs between the two companies and thus increases profits above what each company is worth individually.

Microsoft has some skeeming plan that they are up to with the purchase of facebook and the bid for yahoo. What that is, only a few execs know, but they feel it is worth a price premium over the value of both facebook and yahoo.

Considering how freely and easily facebook users give away personal information I could make a few guesses. It won't be long until advertisers bleed every last penny from you.

 

[Sumguy]

Originally posted by: PeteRoy
Recent discussions about AMD in danger and how much it worth and Facebook bought by Microsoft have made me puzzeled about how could a company that makes no money like Facebook worth twice as what AMD is worth.

Ads

 

[MyThirdEye]

Originally posted by: mjuszczak
What?

 

[zerocool1]

facebook isn't owned my MS is it? i thought they were partnering for ads.

 

[0roo0roo]

no, microsoft bought a small fraction of face book at 240million.
they don't "own" it. the hubub is based on the price they paid for the fraction the value of the total company is insane at 15 billion.
240million is more or less chump change to microsoft of course so i don't think they care.

 

[0roo0roo]

Originally posted by: Sumguy

Originally posted by: PeteRoy
Recent discussions about AMD in danger and how much it worth and Facebook bought by Microsoft have made me puzzeled about how could a company that makes no money like Facebook worth twice as what AMD is worth.

Ads

$30 million in profit only
selling ads isn't exactly a new concept or hard to implement these days. face book is probably earning as much as they deserve to earn. which doesn't make them anywhere near that valuable.

 

[n7]

Originally posted by: Special K
I think this video might be appropriate for this thread:

link

Hah, awesome.

 

[xeemzor]

Originally posted by: Special K
I think this video might be appropriate for this thread:

link

Thanks for the laugh:thumbsup:

 

[darkswordsman17]

Originally posted by: 0roo0roo
no, microsoft bought a small fraction of face book at 240million.
they don't "own" it. the hubub is based on the price they paid for the fraction the value of the total company is insane at 15 billion.
240million is more or less chump change to microsoft of course so i don't think they care.

No they don't care about the cost, as they'll turn around and make probably a billion or more on that 240 million by reselling the advertising (basically they buy a lump sum which gives them more exclusive rights, and then they turn it and sell it individually to companies). I don't know if they do any of the ad hosting or anything like that themselves, which may or may not be why they can command such a good price on the resell.

At least I believe that is how they handle it, I could also be very very wrong so don't take my word as gospel.

 

[0roo0roo]

Originally posted by: darkswordsman17

Originally posted by: 0roo0roo
no, microsoft bought a small fraction of face book at 240million.
they don't "own" it. the hubub is based on the price they paid for the fraction the value of the total company is insane at 15 billion.
240million is more or less chump change to microsoft of course so i don't think they care.

No they don't care about the cost, as they'll turn around and make probably a billion or more on that 240 million by reselling the advertising (basically they buy a lump sum which gives them more exclusive rights, and then they turn it and sell it individually to companies). I don't know if they do any of the ad hosting or anything like that themselves, which may or may not be why they can command such a good price on the resell.

At least I believe that is how they handle it, I could also be very very wrong so don't take my word as gospel.

yea but in how long, if facebook by themselves can only make 30 million, i don't think you can shave some costs to get 1billion

 

[50cent1228]

Originally posted by: EGGO
Shot in the dark but maybe more people prefer facebook than people prefer AMD? I'm pretty sure that has to do with something about worth...

ding ding ding we have a winner