Kripy

A Really Big Number

Alexis Madrigal, reporting for The Atlantic:

So, if tripling the size of the social network to 3,000,000,000 users is not going to be enough to justify its valuation with its current revenue per user, there is only one strategic direction for Facebook to go. It needs to generate more revenue per user. A lot more.

I rinsed this from Marco Arment.

In the last couple of days my Facebook Ad bids have pretty much doubled. I've been doing this long enough now to understand the fluctuations although no patterns have emerged.

There's also the issue of Facebook's click-through rate:

Facebook does not publish its average click-through rate (CTR), but independent analysis from Webtrends on more than 11,000 Facebook campaigns showed that the average CTR for Facebook ads in 2010 was 0.051 percent, which is about half the industry standard CTR of 0.1 percent. The rate, according to the Webtrends report, dropped from 0.063 percent in 2009, which points to a downward trend.

Facebook hints at this in their IPO filling but doesn't really give anything away:

Advertisers may view some of our products, such as sponsored stories and ads with social context, as experimental and unproven. Advertisers will not continue to do business with us, or they will reduce the prices they are willing to pay to advertise with us, if we do not deliver ads and other commercial content in an effective manner, or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives.

As long as all the fish stay in Facebook's pond, they don't really have a problem. They are safe until the next Facebook comes along.