John Paczkowski

Recent Posts by John Paczkowski

Facebook and the "Duke Nukem Forever" of Business Models

Microsoft (MSFT) must be so proud. The company’s $240 million investment in Facebook, one that implicitly valued the social network at $15 billion, hasn’t yet paid off. But it will.

In three years or so when Facebook finally settles on a business model. Assuming, of course, that it’s a viable one. And that it doesn’t send privacy advocates into paroxysms of angry status updates.

In an interview with Frankfurter Allgemeine Zeitung this week, Facebook CEO Mark Zuckerberg trotted out the old “growth over profits” cliché as explanation for the company’s long-absent business model. “… what every great Internet company has done is to figure out a way to make money that has to match to what they are doing on the site,” Zuckerberg said. “I don’t think social networks can be monetized in the same way that search did. But on both sites people find information valuable. I’m pretty sure that we will find an analogous business model. But we are experimenting already. One group is very focused on targeting; another part is focused on social recommendation from your friends. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today. … Growth is primary, revenue is secondary.”

Yeah. Tell that to the stock market …

[Image Credit: The Onion]


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