Facebook venturing into online gambling

[GFPC]

this really makes me dislike facebook even more. I have stopped using them for over a year now - not even logging in once -and this for sure will stop me from ever logging in - LOL - I just find FB so corny - almost rediculous actually. I cringe when my GF puts pics up of us there - just wanna puke.

[TheGooner]

I don't think it will be a problem at all. The site will just be integrated on facebook, but KYC should be performed right away. Unless they give free bonuses. I find it funny everyone is going on about social marketing more than ever, purely because facebook makes no money at all, and are looking for new ventures as their shares are dying completely.

A big non happening for me.

While I agree with David that I do NOT think that this is a big event - I can't let the incorrect statement that facebook is not profitable go by.

Actually, Facebook generated $3.7b last year and made $1b in NET PROFIT!!
It's been profitable for the last 3 years, making $200m, $600m and now $1,000m ($1b)

Source : http://techcrunch.com/2012/02/01/fac...illion-profit/

That's a huge number, but when Facebook was IPO at $38 - that suggested an overall value of around $100b - or 100x annual profits !! That's a number which cannot really be justified unless profits were climbing exponentially - which they were NOT - they are growing by 30-40% per year.

FB is currently quoted at $22 - sugesting an overall valuation of about 60x on profits - still very high - but if FB doubles profits again this year then it's only 30x - almost acceptable for the internet niche - and for a company that is the undisputed market leader in the field.

Facebook makes money from it's ads, just as YouTube and Google does. But whether it can make money from online gambling ventures - and dominate THAT space - is a completely different question.

[DavidB]

Hi Gooner.

You are entirely correct. I made an overall statement that had to do more with their share value collapsing totally, along with this enormous $16 billion IPO. I just see facebook as way over hyped and bloated.
There, I said it (better). :P

Thanks,

David.

[the_soc]

Hi Gooner.

You are entirely correct. I made an overall statement that had to do more with their share value collapsing totally, along with this enormous $16 billion IPO. I just see facebook as way over hyped and bloated.
There, I said it (better). :P

Thanks,

David.

I'm digging into the past but I think what we're seeing with facebook is similar to what happened with Amazon when they went public: a big splash because it was "high tech" and then the stock tanked for several years until the company figured out how to leverage their software platform.

If I recall correctly they originally sold books at a discounted price and didn't charge for shipping - and no one understood how they could turn a profit with a business model like that.

I think FB's challenge is "ditto": find a fit between a popular software platform and some kind of service that will generate the profit, whether its just through advertising or gambling, or something/s else....

[bboyspyder]

I think that if they do start offering gambling services and do it properly their profit will be much higher. They already have the user base they just need to monetize it with else than ads.

[Harry_IA]

..... the problem of converting players, who are used to free play games on Facebook, to real money players

Not to say you aren't right here, but think about all the FarmVille players that have bought extra grain for their farms.
There are a number of games that are free to play, but offer incentive to spend money.

Why wouldn't a bingo player who's been enjoying a winning week on a free play venture into the real money version?
Facebook is simply facilitating this for operators by giving the millions of players access to a real money version.

[casinoplanet]

I think this finally will be the big financial plus FB is longing for. Their massive memberlist will contain a decent percentage of people willing to play bingo for real money. Once this is started, I guess they will add multi-player poker and blackjack as well. The multiplayer and chat aspects will do the trick, because it perfectly blends in with what FB is all about. So imho it will become huge.

[G_F_Brown]

Not to say you aren't right here, but think about all the FarmVille players that have bought extra grain for their farms.
There are a number of games that are free to play, but offer incentive to spend money.

Why wouldn't a bingo player who's been enjoying a winning week on a free play venture into the real money version?
Facebook is simply facilitating this for operators by giving the millions of players access to a real money version.

I agree there are a lot of Facebook users that spend on the add-on's to existing apps (like farmville) but I think the difference is that it is not essential to spend to take part and even progress in these games giving users the choice. Also the goals are that bit more complex than just winning more money which is what a real money site will come down to.

[TheBoyMitchell]

Thing is that only 2.5% of FB users actually spend money on virtual stuff anyway, at an average on 88p a day.

Now whilst thats a lot of users, I think that for FB to just chase this percentage of its userbase is just.....not worth it really. Concentrate on monetising the other 97.5% chaps

[TennMike]

If/when this happens, I might consider buying some facebook stock. LOL

[Harry_IA]

You should buy Facebook stock before it happens

[lowrisk]

Did my comment get deleted? Perhaps I was too correct in my assumptions?

[DavidB]

While I agree with David that I do NOT think that this is a big event - I can't let the incorrect statement that facebook is not profitable go by.

Actually, Facebook generated $3.7b last year and made $1b in NET PROFIT!!
It's been profitable for the last 3 years, making $200m, $600m and now $1,000m ($1b)

Source : http://techcrunch.com/2012/02/01/fac...illion-profit/

That's a huge number, but when Facebook was IPO at $38 - that suggested an overall value of around $100b - or 100x annual profits !! That's a number which cannot really be justified unless profits were climbing exponentially - which they were NOT - they are growing by 30-40% per year.

FB is currently quoted at $22 - sugesting an overall valuation of about 60x on profits - still very high - but if FB doubles profits again this year then it's only 30x - almost acceptable for the internet niche - and for a company that is the undisputed market leader in the field.

Facebook makes money from it's ads, just as YouTube and Google does. But whether it can make money from online gambling ventures - and dominate THAT space - is a completely different question.

Hey there,

Must say it would be great any gambling affiliate would step in, showing us how his business model/revenues depend on facebook primarily. Strong, ongoing revenues. It's one thing for some to point out ''you just have to be on facebook, otherwise you are really missing out'' - I don't mean people involved in sharing their views here . Revenues are a different thing. Yes, some could also advertise on other monster traffic/portal sites, and if results fail to show up, use the convenient ''good for brand building, branding anyways'' excuse. With the recent developments of how facebook now seem to target online gambling companies with a presence, just a page on facebook, almost forcing them to spend on advertising minimums monthly, in order to keep their ongoing presence on facebook...the free for all aspect is out now.

What sort of returns does any company advertising on facebook get nowadays?

Thanks.

David.