Is Facebook The Next Real Estate Bubble?

 

Ah Ireland.

The Celtic Tiger

Now the Celtic basket case - along wth Greece, Italy, Spain, Portugal, Iceland.. you name it...

Borrow vast sums of money to build houses.  How could this go wrong?

Real estate prices always go up, right?

And Ireland (Spain! Portugal! Italy! Greece!)

Who wouldn't want a house there?

Or a shopping center"

Or a whole village?

How could an investment like that go wrong?

In retrospect it all looks pretty obvious.  

But not then.

Then it looked as good a tulip bulbs.

Better.

Because you can always live in a house.

Which is something you can't do with Facebook.

Neither can you eat it (which you could do with tulip bulbs, worst case scenario).

Facebook - you can't live in it, you can't eat it, you can't wear it, you can't drive it to work.

It is fun, however.

And very popular.

But is popularity a business?  Or is it another housing bubble?

Facebook has 900 million users. Very impressive.

In 2011 it showed $3.8 billion in revenue and $1.5 billion in profit.

Very reasonable, until you divide them into one another.

Then, not so impressive.

Facebook generates an average of $4.22 from each of its users per year.  Or just over 1 cent per day per user.

But wait, it's worse.

We spend cumulatively 700 billion hours per month on Facebook.

Talk about time wasted.

Facebooks gross revenue is $316 million per month.

or.... ready?  $.0004 per person per hour.

Or... 4/1000th of a dollar per person per hour.

is that even a number?

That's what Facebook, for its valuation of $100 billion is able to generate from each of us.

As a business, it makes housing estates in Ireland look good. 

sort of.