Quote:
Originally Posted by AdmiralAkbar
And here is where people will get stuck up: Google makes massive loads of cash with ad revenue, so why won't Facebook have a similar patern of success? This won't happen because Google is a "portal" (the whole point of going there is to find a path to somewhere else), while Facebook is an "end-point" (you usually don't go to Facebook looking for another site). As far as hosting goes, the cost of a few users is practically zero. But when you are in the business of volume (as you need to be to get profit from ads alone) this number can climb quickly.
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This is the bottom line, and why it is just
that "reporters" in the tech industry are saying Facebook will supplant Google.
Google will make money because they have two ways of generating it from ads, both of them sustainable for the long-haul:
1. When users actively search out information (via Google's search technology), they also receive RELEVANT ads to what they were ACTIVELY looking for. It is basically additional search results. Compare this to Facebook, who has no way of knowing what you are interested in, other than either by the group you belong to (barely accurate), or by data mining (good luck putting a friendly spin on that one, as we've seen from this thread).
2. Google delivers 3rd-party ads to the end-result sites. Someone puts Google's code into their page, Google delivers the ad. Google's revenue doesn't depend on that one site being successful, because if it isn't, 100 others will pop up and take its place. Facebook on the other hand is one site. If ad revenue doesn't work out on their site, they're screwed. They have no other way of making money.
It's extremely obvious what Facebook is trying to do, and that is drum up as much hype as possible to try and overvalue themselves and make a huge cashgrab before completely selling the farm. I can't fault them, it's smart, and will probably work to some extent. I just can't believe there are still companies stupid enough to buy into this (especially with the .com bubble so fresh in everyone's mind).