Wednesday, September 29, 2010

Should We Believe the Facebook or DoubleClick Numbers.....

I have a Finance Degree. I analyze stocks all the time because I enjoy it. I can look at the fortune 500 stats for hours and find glee. One purpose Sky Pulse Media serves is to help Clients value the various Advertising and Marketing platforms and channels properly to maximize ROI. Everything has a value.

We also know the last Private Investor in Facebook gave a $23bil value. If Facebook goes public at less than that the investors lose money on paper and in reality. For example if I bought a 10% share in Facebook for $2.3 bil expecting the value of the stock to reach $40bil at IPO and instead it goes public at $11.5bil I lost half my investment.

Some numbers recently have me very perplexed:

A recent Ad Week article cited Facebook having 146mil unique visitors in July, while DoubleClick claims 540mil. Which one is correct? This is HUGE. Because 70% of Facebook users per their Stats Page are not in the US. So either there are 43mil monthly US users or 162mil. Which is it?

Secondly DopubleClick Claims 690Bil Page views in July for Facebook.  Is this possible even if 540mil users are accurate? That comes out to 42 page views per user each day assuming all 540mil log in each day. Since Facebook claims only 200mil+ that means everyone who logs in each day averages over 100 page views per day. That seems absolutely impossible.

Also Facebook claims 55mins per day per user, Nielsen claims 6hrs per user per month!

This means something is either being measured differently for Facebook because of the way the website is structured. Or the measurements are completely untrue. The big issue is Wall Street will see the exact same thing and completely discount the value of Facebook because they won't know what to believe.

One last measure. If you buy Apple stock the cost is $6 per $1 of Apple Revenue. At the same valuation Facebook is worth $9bil. Would you pay $15 per $1 of revenue for Facebook instead of buying Apple. Apple makes Computers, MP3 Players, Tablets, Phones and has revenue streams with ITunes and the APP store. Facebook could go the way of Myspace in 3 years. Do you feel Facebook has the dedicated loyalty Apple has?

Something to think about. My next post will discuss why Traffic Numbers might be (or can be) fudged.

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