My friend Kara Swisher at All Things D has some juicy details from a recent all-hands meeting at a theatre near Facebook headquarters in Palo Alto. Apparently the shyness that Scoble remarked on when he met Mark Zuckerberg in Davos must have been a temporary thing, because it sounds like Marky Mark was more than happy to chatter about the dollars flowing through Facebook’s bank account.
Apparently the site is expecting to have revenue of about $150-million for last year, which was widely expected. But Mark said Facebook is looking for twice that this year, if not more. And he’s going to need all that revenue, because he also said capital expenditures are going to be about $200-million. For what? Maybe some more telephone operators to handle all the switchboard calls when they unveil the next Beacon. In any case, as Kara notes that will leave the site in the hole cash-flow wise.
But what does Mark care? He got $300-million or so from Microsoft and Li Ka-shing and people like that, and his company is valued at %15-billion, which means he’s worth a few billion at least. Good times.
One interesting point from Google’s much-discussed quarterly results: Eric Savitz of Barron’s Tech Trader Daily blog notes that the company’s CFO said Google’s â€œsocial networking inventory is not monetizing as well as expected.â€ In other words, the social ads they’ve been running through MySpace and elsewhere? Not so much. That’s apparently why the company’s TAC or “traffic acquisition” costs (otherwise known as marketing) were higher than expected.
As Eric notes, this could make a lot of businesses that are counting on some form of social advertising quite nervous — including Facebook, presumably. I have to say, I don’t think that “social ads” are quite as simple a beast as some companies and marketers are thinking (or hoping) they are. In fact, I’m starting to think that there might even be an inverse relationship: to the extent that they are social, they’re not really ads, and to the extent that they’re ads, they’re not really social.
It must be tough when you just keep beating estimates quarter after quarter, like Google has done ever since it became a public company — until now. Revenues and profits have continued to rise by the mid-double digits pretty much every time the company reports, and along the way plenty of people have become accustomed to the idea that it will continue more or less forever. And most of those people have been selling in the wake of the company’s much-ballyhooed “miss.”
A couple of things: 1) This is partly Google’s own fault for not providing “guidance” to analysts about how its business is doing, the way most companies do (that is, if Larry and Sergey and Eric even care, since they focus on the long-term and aren’t concerned with quarterly results, as they told us in the prospectus). 2) Describing financial results that came in a penny lower than estimates as a “material miss” is overstating things more than a little, I think — and revenues were only 1.7 per cent lower than estimates, which were likely jacked up anyway.
As my friend Paul Kedrosky pointed out to me, the reaction of Google’s stock — which was down by as much as 9 per cent in after-hours trading — is likely as strong as it is because a) this is the first miss in Google’s history and b) it makes people nervous about how much of an effect the weak U.S. economy and advertising market are going to have on the company in the future. Perhaps some of those who said Google was immune to downturns might be regretting their sanguine comments.
At the same time, however, I think calmer heads should remember that Google’s stock has already dropped by about 20 per cent from its recent high, and that after-hours trading is often the province of nervous Nellies who sell at the first whiff of trouble. It sure doesn’t look to me as though Google’s business is coming apart at the seams.
In one of the least-surprising legal moves in recent memory, Swedish authorities have laid charges against The Pirate Bay, one of the largest trackers of BitTorrent downloads in the world (it recently passed the 10 million peers mark), on behalf of several movie studios and record labels. This isn’t surprising for a number of reasons. For one thing, the Swedish authorities have said several times over the past few months that they were going to file charges; and for another thing, the site’s name is The Pirate Bay — I mean, come on 🙂
At first glance, it seems obvious why Swedish prosecutors are suing the company. After all, by going through The Pirate Bay, people can get access to millions of movies, songs, software programs and other digital files, and download them freely without paying for them. The sticky part, however, is that The Pirate Bay doesn’t host any of those files — like Google, the site is nothing but an index of where those files are located. The actual files are hosted on millions of computers around the world, some of which may only have a small part of the original file, thanks to the magic of BitTorrent.
In other words, The Pirate Bay is only pointing Internet users to those files, in the same way that Google and Yahoo and MSN point users to webpages. Is that — or should that be — a crime? In a similar vein, a music search engine called Seeqpod is being sued by the record label EMI because it makes it easy for people to find public mp3 files on the Web (there are half a dozen other services that do the same thing, including Songza and g2p.org). Should that be illegal? G2P.org actually just does a search through Google. If that’s illegal, does that make Google responsible?
Even if The Pirate Bay is successfully sued, it isn’t likely to affect downloading much. The site may have the largest torrent “tracker” in the world, but it isn’t the only one — there are thousands of them. Even if The Pirate Bay is found guilty and goes out of business, the servers that run the site aren’t actually located in Sweden and will likely continue functioning (The Pirate Bay claims to not even know where the servers are). The founders of the service say their tracker will remain operating even if they are found guilty.
I’m having some trouble getting excited about the announcement that Meebo Rooms can now be easily embedded into websites and blog pages (you could embed them before, apparently, but it wasn’t easy). I get the fact that Meebo.com makes it easy to chat, and I know that its Web-based IM service is hugely popular — particularly with people who have instant messaging blocked at work or school, as many of us do.
But the whole “embedded chat room” thing just doesn’t work for me. Maybe it’s because there have been — and are — dozens of companies doing pretty much the same thing, including 3bubbles.com (remember them?), Gabbly, Mobber and a whack of others with equally ridiculous and forgettable names. Heck, my friend Brent Ashley whipped up an Ajax chat room widget back in 2002 called BlogChat. It’s not technically that hard (no offense, Brent), so what is compelling about it?
I guess like Pete Cashmore, who wrote about 3bubbles when it came out, I just don’t get the whole dedicated chat room idea. Most of the chat room apps I’ve tried on various sites (including mine) wind up filled with idiots, or are ghost towns where there hasn’t been a chat message for weeks, and the last one was someone typing “Hi, is anyone here?” I could see it for a dedicated situation such as a conference or some other compelling event, but how many of those could there be?