Brian was criticized at the start of this thread for suggesting not enough thinking went into the critiques of Facebook's IPO. I would add not enough knowledge. For a valuation of $100 billion, at the normal rate accepted by the stockmarket in the US, that means Facebook needs to earn profits of $4-5 bn per year, or something like $20 or $25 per user. It will receive that, plus whatever running Facebook costs, I presume, from a combination of inputs, such as money spent by users on games on it, the pages it sells to brands, and the "targeted" ad sales that people are so upset about. Conceivably, it could also start charging a modest subscription fee, but I doubt that it will, since that would reduce membership. Also, the "aggressive monetization" that Mark A. proposes would reduce membership if not handled very carefully. If for instance ads become more annoying, that would have an immediate negative effect. So would ads that too aggressively make use of individual information.
Users making posts that potentially get them the attention of their "friends" and, perhaps, through those friends' sharing, of others as well will remain the chief attribute of Facebook if it is to succeed. That is why the main result has to be understood as an enlargement of the attention economy, and not the money economy. It has been argued that it is advertising that has led to our "consumer society," but that is simply a conjecture, essentially impossible to verify. An alternative conjecture, probably equally unverifiable but for which considerable evidence is available, is that the sheer numbers of different varieties of goods — both material and otherwise — that could be bought and sold increased consumerism. You can read about the love of shopping in Jane Austen's description in her first novel, "Northanger Abbey," of Bath when capitalism was in its infancy and there was extremely little advertising beyond shop signs. Marx famously began "Capital" with an acknowledgement of the "immense accumulation of commodities" when advertising still was limited. "Born to shop" is a description some easily adopt for themselves, whereas "born to heed advertising" is not. Also of significance is "keeping up with the Joneses." I don't recall seeing many bottled-water ads, and perhaps this is just my own blindness to them, but I certainly have noted that huge numbers of people adopted carrying around the fluid in those plastic bottles. Roughly 2-3% of GDP has been the ratio devoted to advertising in the US for a century, though it was more like 3 in the 1920's and less ever since. But in addition to the production of the ads themselves, that sum includes the media supported by those ads and of course all the payments to those who are involved in producing those media and who thereby get attention. http://www.galbithink.org/ad-spending.htm As GDP goes up, so do ads, more or less, but there is nothing to indicate that ads cause the rise in GDP, rather than the reverse. Advertisers have a much greater potential market in those who already buy their competitors' versions of something, as a rule, than in creating a general desire for a whole category of good where there was none before, and it wouldn't seem to be in the interest of any particular advertiser to create a market for any potential competitor as well as itself. Btw, I forget who it was on this thread who insisted that the vast majority of ads even on the Internet are for material goods such as cars and clothes, etc., but of course ads are for all sorts of intangibles ranging from education to bank accounts to medical care, etc. The majority of GDP is not manufactures, and that is true world wide. Would it be so terrible if people made a slight effort to obtain data and consider their meaning before making assertions? Best, Michael Best, Michael On Mar 6, 2012, at 10:57 PM, Mark Andrejevic wrote: > Facebook's biggest problem, at the moment, is to live up to its reported $100 > billion valuation -- a big challenge for a company whose material assets and > actual revenues fall far short of warranting such a big number. So brace > yourself Facebookers, for increasingly aggressive forms of "monetization"! > # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mx.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: [email protected]
