Farmville is getting a little frothy
May 8, 2011 8:10 PM   Subscribe

Recent venture capital fund raising rounds have placed very high valuations on social media sites such as Facebook, Zynga and Groupon. The valuations continue to soar at an exponential pace, some placing Facebook at 75 billion and Zynga at 10 billion. Many experts have gone on record claiming this is a bubble including Eric Schmidt, Alisher Usmanov, the Russian magnate behind much of the venture capital in soical media and the Economist from last year.

As with all bubbles, things are of course different this time. The template response to these claim is a questioning of the fundamentals. In this case, there are genuine differences with other bubbles, notably the role of secondary trading markets such as second market (noted here previously) in boosting valuations and the idea that this tech bubble is not contributing to technical innovation as previous ones have, but instead "The best minds of my generation are thinking about how to make people click ads."
posted by FuturisticDragon (96 comments total) 7 users marked this as a favorite
 
Things ain't right when Zynga/Farmville is theoretically worth twice as much as EA.
posted by furtive at 8:20 PM on May 8, 2011 [6 favorites]


These are valuations based on future performance and reasoning (from Facebook and Zynga) about the possibilities of future growth. I imagine whatever venture firms are still trying to get into social media now are trying to do so at a substantially discounted rate. For all we know, Facebook may be seeking those funds in order to make ends meet before it is able to prove the viability of its advertising revenue.
posted by parmanparman at 8:26 PM on May 8, 2011 [1 favorite]


Just for reference, a $75 million market cap for Facebook makes it bigger than TD Bank, UPS, Caterpillar, Comcast, Honda(!), Mitsubishi, and 3M, among others.
posted by ferdinand.bardamu at 8:26 PM on May 8, 2011 [7 favorites]


I don't see much reason to expect Facebook is going anywhere soon. Maybe the value is too high, but it's a sound company with an amazingly massive base of eyeballs for ads.

It's not Pets.com. It's an Amazon or Google. It's not a piece of real estate with a bullshit mortgage.

Cheesy games though? Anyone can make them. The next massive one will look more like WoW than Farmville though, so I hope they aren't resting on their current tech.
posted by furiousxgeorge at 8:27 PM on May 8, 2011 [2 favorites]


The next massive one will look more like WoW than Farmville

Oh. Dear. God.

Just imaging the role playing and gaming-with-your-buddies aspects of WoW combined with the worry-stone appointment gaming of Farmville makes me a bit nauseous. I'm not even a gamer, and I can easily see how that would end up being crack cocaine, heroin, that brain recorder from Strange Days, and some other dystopian addictive substance rolled into one.

On the upside, maybe a few people will end up vacating the job market due to falling in and not coming out, and so we'll be able to get a few people off the jobless roles.
posted by hippybear at 8:41 PM on May 8, 2011 [8 favorites]


Anyone can make cheesy games. Almost no one can make money off of them. Zynga can. That's pretty valuable.
posted by chasing at 8:48 PM on May 8, 2011 [2 favorites]


It's fun to watch a pump and dump scam on such a grand scale isn't it?
posted by Grimgrin at 8:50 PM on May 8, 2011 [19 favorites]


"The best minds of my generation are thinking about how to make people click ads."

I saw the best minds of my generation destroyed by ad-ness, clicking hysterical naked,

dragging themselves through Facebook streets at dawn looking for an angry post,

socialheaded hipsters burning for the new-forged heavenly connection to the Like-ed dynamo in the internet of night,

who friended and taggéd and hollow-eyed and high sat up Farming in the supernatural darkness of basement-dwelling desks floating across the links for strangers contemplating cats....
posted by hippybear at 8:51 PM on May 8, 2011 [50 favorites]


If its a bubble, its a small one. FB is probably closest to its number.

Groupon is a fad. It will always be a part of advertising, but not a backbone and easily competed with. FB buy in by consumers is a reach few can exceed.
posted by Ironmouth at 8:54 PM on May 8, 2011 [1 favorite]


I have not seen a TV commercial break without a Facebook icon in one of the ads for over a year.
posted by danb at 9:01 PM on May 8, 2011


What the hell is a Zynga?
posted by indubitable at 9:02 PM on May 8, 2011 [3 favorites]


The next massive one will look more like WoW than Farmville

Glitch, from Tiny Speck (the former co-founders of Flickr), you heard it here first. A friend of mine just started working there and having tried the beta says the real world becomes unappealing and just makes you itching to go "back in". Said friend also predicts these guys will be stinkin rich (er, moreso than they already are).
posted by PercussivePaul at 9:03 PM on May 8, 2011 [3 favorites]


I think the whole thing with Farmville/Cityville/etc is that they aren't at all like WoW. They're simple to get into and maintain, run on anything, and offer cute, clean graphics for simple flash and/or javascript games.

Adding more gameplay complexity/better graphics misses the point. You might be able to tap into new markets that way. For example, Backyard Monsters tries to mix the tower defense genre with Facebook games, but I feel like that market already goes off facebook to regular flash game sites like Kongregate for that, or just plays regular games on the PC or a console. But you're not going to win over Zynga's customers with that strategy, and that market is what made Zynga huge.
posted by mccarty.tim at 9:07 PM on May 8, 2011 [1 favorite]


With so many of the social media companies not yet taken public, is the bubble even a concern? Not saying it shouldn't be, just asking more knowledgeable folks.
posted by vidur at 9:09 PM on May 8, 2011


What the hell is a Zynga?

If it lasts more than 4 hours, see a doctor. That's all I know.
posted by vidur at 9:09 PM on May 8, 2011 [2 favorites]


from Tiny Speck (the former co-founders of Flickr)

Speaking of which, do they still own the IP for Game Neverending? I'd totally play GNE on Facebook. I guess I'll have to wait for Glitch.
posted by mhum at 9:12 PM on May 8, 2011


Apparently, Facebook and Goldman Saches are working on some sort of investment vehicle to let investors buy into Facebook without Facebook divulging too much about their assets to the SEC.

That inspires confidence. But at least they aren't making securities, so much as offering a shadowy and mysterious orifice for people to put money in in hopes that it squirts more money back at them later. That's how I understand an investment vehicle to work.
posted by mccarty.tim at 9:13 PM on May 8, 2011 [12 favorites]


But will these people deliver pet food?
posted by pompomtom at 9:14 PM on May 8, 2011 [1 favorite]


Just imaging the role playing and gaming-with-your-buddies aspects of WoW combined with the worry-stone appointment gaming of Farmville makes me a bit nauseous.

cstross has been there and done that.
posted by b1tr0t at 9:18 PM on May 8, 2011


Glitch, from Tiny Speck

I have friends who are completely addicted to that already. I'm staying away because I'd like to do something productive with my summer.
posted by immlass at 9:18 PM on May 8, 2011


indubitable: “What the hell is a Zynga?”

The company responsible for the most popular video game of all time.
posted by koeselitz at 9:24 PM on May 8, 2011 [1 favorite]


With so many of the social media companies not yet taken public, is the bubble even a concern?

With everything private, the only way to get involved in the bubble is if you are officially rich enough to invest in unregulated investment companies (ie, hedge funds, VC funds, etc.) or are a developer.
posted by b1tr0t at 9:25 PM on May 8, 2011


I spend more time on Facebook than on anything else in my life. I don't think you can value it too highly.
Then again, I used to be like that with MySpace.
posted by Lovecraft In Brooklyn at 9:25 PM on May 8, 2011


Seek professional help.
posted by pompomtom at 9:26 PM on May 8, 2011 [7 favorites]


All I want to know is, when this bubble bursts, who gets hurt, and how can I minimise my exposure to indirect consequences?
posted by -harlequin- at 9:26 PM on May 8, 2011


The weird thing to me with these huge valuations is how few people these companies employ. The money (real or virtual) is enormous, but the direct societal benefit of people taking home salaries is very small. I don't know if that is a good thing, a bad thing, or just neutral, but I do find it interesting.
posted by Forktine at 9:27 PM on May 8, 2011 [2 favorites]


Glitch, from Tiny Speck (the former co-founders of Flickr), you heard it here first. A friend of mine just started working there and having tried the beta says the real world becomes unappealing and just makes you itching to go "back in". Said friend also predicts these guys will be stinkin rich (er, moreso than they already are).

Why do they have SO MANY EYES?
Pretty sure every videogame has that effect. I'm itching to head home so I can clear out the zombie infested mall of Dead Rising. Doesn't mean I'll still be playing it in a month.

Seek professional help.

I'm sure my shrink will tell me to cut myself off from all my friends. It sounds healthy!
posted by Lovecraft In Brooklyn at 9:28 PM on May 8, 2011


I shouldn't have watched that Glitch trailer. I WANT TO PLAY IT SO BAD.
posted by liquorice at 9:31 PM on May 8, 2011


I'm sure my shrink will tell me to cut myself off from all my friends.

You know what a false dichotomy is, right?
posted by pompomtom at 9:31 PM on May 8, 2011 [1 favorite]


I shouldn't have watched that Glitch trailer. I WANT TO PLAY IT SO BAD.

I'm not a gamer, and flee electronic things which seek to addict me, so it had exactly the same effect on me. It has a giant STAY AWAY field set up around it in my mind from now on.
posted by hippybear at 9:32 PM on May 8, 2011


It wouldn't surprise me if Facebook actually hit a $75g market cap at some point. Apple is worth $319 billion, and Google is worth $172.11. If face-book can get people to buy 1/4th on FB as apple can get people to buy in iTunes/AppStore they could hit that target.

The company responsible for the most popular video game of all time.

I've heard that Happy Farm was actually more popular then farmville. also not sure if the "Of all time" thing is really accurate either. I would imagine that more people have played Mario 1 around the world then farmville.
posted by delmoi at 9:33 PM on May 8, 2011 [1 favorite]


Fakebook is worth more than Google. Insurers, lenders, retailers, and everyone else who wants a personal profile to target their services with will buy it from the company (because those privacy controls will prevent them looking it up, right?). Google knows far less. Like they say, if something is free, then we are the product.
posted by Brian B. at 9:34 PM on May 8, 2011 [4 favorites]


Glitch seems to send me the same emotion as when I saw the GABBO GABBO GABBO episode of The Simpsons the first time and didn't know what Gabbo was yet.

I was filled with so much hope and fear.

Then it turned out to be a Howdy Doodey tribute.

That said, I would like to get in on the Beta. Aside from Gabbo, I'm also getting a Homestuck vibe, so I guess that's... good?
posted by mccarty.tim at 9:35 PM on May 8, 2011


Facebook serves one third of online ads in the US.

You know what they say about you being the product? Well Facebook knows more about you than google can hope to know. Google is running scared right now, introducing the +1, the re-org, tying company wide bonuses to social initiatives, offering absurd money to engineers to keep people from leave for Facebook.

My take? We are leaving the era of the web as wild wild west. Algorithmic search is dead, content discovery will happen through social curation. Facebook wants to bring all desirable content inside it's walls, google is just struggling to keep up.
posted by Ad hominem at 9:36 PM on May 8, 2011 [3 favorites]


I don't really understand how Facebook, or any advertising-funded internet companies expect to last long-term. I figured the ads are only ever seen because most people don't realize they can block them - at some point, won't that knowledge be universal? Are they counting on out-teching adblockers, or on internet users volunteering to see them, just to keep the thing afloat? Neither seems likely, to me. Maybe it's a separate issue, but I'm on Facebook all the time (mostly posting stuff I learn here!), and have yet to see an ad. That's more rare an experience than I assumed?
posted by relooreloo at 9:37 PM on May 8, 2011


Glitch, from Tiny Speck (the former co-founders of Flickr), you heard it here first.

I watched the trailer and that game seems incredibly boring and tedious to me.
posted by delmoi at 9:37 PM on May 8, 2011 [4 favorites]


That Glitch game looks terrifying and seems to represent everything that is wrong in the world today.

To me anyways.
posted by mephisjo at 9:43 PM on May 8, 2011 [2 favorites]


I watched the trailer and that game seems incredibly boring and tedious to me.

It looks anything but boring to me, but it does look like it fell into a deep vat of high-fructose cute and was unable to pull itself out.
posted by Kraftmatic Adjustable Cheese at 9:48 PM on May 8, 2011 [1 favorite]


Also, I don't think I noticed a clear point to that game other than "Do stuff that gets points and get badges or something. Because, Giants!"

But I do like classic Maxis games, and they had little to no point.

Come to think of it, why aren't there good sim facebook games, for things other than farming? It could work if it were forced to run in realtime instead of the superfast sim time you usually see.
posted by mccarty.tim at 9:51 PM on May 8, 2011


This is a game. It's a game for investors who want to realize large multiples on their investments. It's about making the general public *believe* something. VC's and other investors - and the founders - will make substantial sweat equity and capital returns based on the hype generated.

MySpace is still around. I think Facebook will stick around too, and end up as relevant to the next big thing as My Space is, now. A lot of people will make a lot of money. Lots (100's of millions) of Facebook members will keep giving their identity details away. Really, who needs universal surveillance by the CIA, when all the latter has to do is jack into Facebook.
posted by Vibrissae at 9:53 PM on May 8, 2011 [1 favorite]


Well Facebook knows more about you than google can hope to know.

I uploaded some party photos last weekend and Facebook automatically tagged a bunch of faces. 99% of them were correct.

Facebook knows what my friends and I look like.
posted by Lovecraft In Brooklyn at 9:55 PM on May 8, 2011 [2 favorites]


My take? We are leaving the era of the web as wild wild west. Algorithmic search is dead, content discovery will happen through social curation. Facebook wants to bring all desirable content inside it's walls, google is just struggling to keep up.
I know people say that but it just seems like something people with no grip on reality say to sound provocative. Yeah people will discover links through facebook, but how does that replace search? "social" isn't a substitute for "search" at all, they serve completely different needs. One is for on demand information, the other is for distraction and entertainment.

And beyond that, who is going to be serving the ads on all those pages that people link too? The majority will probably have Google adsense.

I think perhaps people are confusing the role of the user with the roll of the "publisher" (i.e. SEO spammer). The "publisher" needs to figure out a way to get users to share stuff on FB as well as doing SEO spamming in order to get people to read their stuff. Mostly that seems to involve plastering their pages with "Share this!" links and "Like" buttons everywhere.

But that has nothing to do with how users use search/facebook and how advertisers do keyword advertisement. People doing SEO are not google's customers, they are not google's "product" (i.e. the users) they are just leaches trying to game the system.


Think about it this way. Say you're a middle aged man and you want some Viagra. Are you going to use Google or are you going to post to your FB wall asking for recommendations on where to get it? In terms of things you can post to your wall, how many people are going to post a question and then wait hours for people to respond instead of just googling it? I think most people, if they do use FB to get questions answered will only be asking things that they can't figure out using google.
posted by delmoi at 9:55 PM on May 8, 2011 [8 favorites]


I uploaded some party photos last weekend and Facebook automatically tagged a bunch of faces. 99% of them were correct.

Facebook knows what my friends and I look like.
Actually, google probably knows this too. You know Google Goggles, their visual search engine? You take a picture with your phone and it tells you what it is. They had the tech to do faces but decided not to include it, because they thought it might weird people out. Probably a good idea.
It looks anything but boring to me, but it does look like it fell into a deep vat of high-fructose cute and was unable to pull itself out.
Actually it reminds me of an ad for ADD medication or something - the 'climax' seemed to be a bunch of forms and datasheets and what looked like work piling up in an incoherent mess of responsibility.
posted by delmoi at 10:05 PM on May 8, 2011 [1 favorite]


I don't really understand how Facebook, or any advertising-funded internet companies expect to last long-term. I figured the ads are only ever seen because most people don't realize they can block them - at some point, won't that knowledge be universal? Are they counting on out-teching adblockers, or on internet users volunteering to see them, just to keep the thing afloat? Neither seems likely, to me. Maybe it's a separate issue, but I'm on Facebook all the time (mostly posting stuff I learn here!), and have yet to see an ad. That's more rare an experience than I assumed?

Nobody cares. The ads don't get in the way and everyone ignores them. But also, they work.
posted by furiousxgeorge at 10:07 PM on May 8, 2011 [1 favorite]


Facebook serves one third of online ads in the US.

Facebook ads are ineffective for advertisers and generate pathetic CPCs/CPMs.

Your argument is basically that because McDonald's serves a third of the beef in the US that steak houses will go out of business. No, they will not.

Nobody cares. The ads don't get in the way and everyone ignores them. But also, they work.

There is a vast difference between display/content ads (AdSense for Content, Facebook, Yahoo's Display Network, etc) and search ads in terms of effectiveness and revenue generation.
posted by GuyZero at 10:11 PM on May 8, 2011


I know people say that but it just seems like something people with no grip on reality say to sound provocative. Yeah people will discover links through facebook, but how does that replace search?

I didn't say search is being replaced, I'm saying PageRank is going to be increasingly marginalized. There will still be search but increasingly rankings will be determined by facebook likes, or Google +1. It is pretty clear that google has lost some faith in it's algorithms, once it let people tinker with the results via blacklisting or +1 they let the genie out of the bottle.
posted by Ad hominem at 10:13 PM on May 8, 2011


But also, they work.

This is the part I'm curious about. I just spent a few minutes trying to research this and didn't come up with anything. Do Facebook ads work? How do we know? "If they didn't work people wouldn't buy them" carries some weight, but isn't totally convincing; since people pay good money for all kinds of things that don't work.
posted by escabeche at 10:18 PM on May 8, 2011 [1 favorite]


Think about it this way. Say you're a middle aged man and you want some Viagra. Are you going to use Google or are you going to post to your FB wall asking for recommendations on where to get it? In terms of things you can post to your wall, how many people are going to post a question and then wait hours for people to respond instead of just googling it? I think most people, if they do use FB to get questions answered will only be asking things that they can't figure out using google.

I post lots of questions that are subjective, or the sort of thing I'd use AskMe for. 'What's the best mobile broadband provider?' 'What should I do tonight?'
posted by Lovecraft In Brooklyn at 10:22 PM on May 8, 2011


"I uploaded some party photos last weekend and Facebook automatically tagged a bunch of faces. 99% of them were correct.

Facebook knows what my friends and I look like."


Cree-pee.
posted by ferdinand.bardamu at 10:23 PM on May 8, 2011 [2 favorites]


I'm not a Facebook member, but I don't have any ad blocker installed on my computer.

I can pretty much say, I can't think of a single instance where I wasn't looking directly for information about a product I wanted to buy where I feel my life was affected by any online advertising. Banner ads, AdSense, or other.

Are Facebook ads so much more intrusive that they could not be tuned out as effectively as other ads?
posted by hippybear at 10:24 PM on May 8, 2011


Facebook ads are ineffective for advertisers and generate pathetic CPCs/CPMs.

I can pretty much say, I can't think of a single instance where I wasn't looking directly for information about a product

I agree with both of those, I think Facebook, as well as google have to be looking past banner ads. How about this scenario, Facebook sees a friend has switched status to engaged so it slips links for clothing stores and travel sites into your feed. How about 5 of your friends like a music track so it offers you a download, payable in facebook credits. Facebook sees someone set up an event to see a movie, they offer you a link to buy tickets.
posted by Ad hominem at 10:34 PM on May 8, 2011



I agree with both of those, I think Facebook, as well as google have to be looking past banner ads. How about this scenario, Facebook sees a friend has switched status to engaged so it slips links for clothing stores and travel sites into your feed. How about 5 of your friends like a music track so it offers you a download, payable in facebook credits. Facebook sees someone set up an event to see a movie, they offer you a link to buy tickets.


I'm pretty sure they already do that.
posted by Lovecraft In Brooklyn at 10:41 PM on May 8, 2011


Facebook wants to bring all desirable content inside it's walls, google is just struggling to keep up.

As far as locking in users to serve the real customers — telcos — Google is working hard on this problem by locking out competitors. They seem to be doing a good job, so far.
posted by Blazecock Pileon at 10:42 PM on May 8, 2011


Glitch is not the next Farmville. It's cute, but too niche by a whole and not really very much fun. I quit the Beta maybe just 2 weeks in.

For all of you going LOL ANYONE CAN MAKE FARMVILLE the answer is: No, they can't. It's an unbelievably well engineered game. It's the Minotaur's Labyrinth of games and Zygna are the Daedalus of the form. From a design standpoint, it's a tremendous piece of work. Is it fun? I don't think so. Is it a game? Not really. But is it easy to make? No way.
posted by GilloD at 10:46 PM on May 8, 2011


I didn't say search is being replaced, I'm saying PageRank is going to be increasingly marginalized.
Actually you said "Algorithmic search is dead"
I didn't say search is being replaced, I'm saying PageRank is going to be increasingly marginalized. There will still be search but increasingly rankings will be determined by facebook likes, or Google +1.
Well, that's still algorithmic search, it's just using a different set of data inputs. Like I said, this is a concern for web publishers but it's totally irrelevant for users and advertisers. In fact SEO spammers are probably a net negative for google. The irony is that while Google's algorithms get better and better, the quality of material on the web just keeps dropping, which is why google wants metrics that are less susceptible to getting gamed.
I post lots of questions that are subjective, or the sort of thing I'd use AskMe for. 'What's the best mobile broadband provider?' 'What should I do tonight?'
And google serves askme's ads :P
Are Facebook ads so much more intrusive that they could not be tuned out as effectively as other ads?
Nope, facebooks ads are very non-invasive compared to most of the stuff on the web. They're a lot like Google's text ads but with a small static image.
As far as locking in users to serve the real customers — telcos — Google is working hard on this problem by locking out competitors. They seem to be doing a good job, so far.
*rolls eyes* Apparently Blazecock is on a hair trigger that demands he badmouth android at every opportunity regardless of it's applicability to the thread. The NYT article is about potential hardball in a deal with Motorola to provide position data on their handsets. It has nothing to do with 'users choice' or anything like that (the users would be stuck with whoever Motorola chose, and it would be largely transparent in any case)

It also has nothing to do with this thread.
posted by delmoi at 10:53 PM on May 8, 2011 [2 favorites]


I'm pretty sure they already do that.

They can pin stuff to the top of the feed right? But it's still just random crap?
posted by Ad hominem at 10:53 PM on May 8, 2011


It's inevitable that the black swan is going to visit Facebook at some point. Just as FB has displaced MySpace, something will displace FB. I think it will be Diaspora or something Diaspora-like. It will take some kind of shitstorm for this to happen, ie, the masses will get wise to the drawbacks of sharing their personal information indiscriminately with an entity that broke it's promises. This already happened with the Beacon experiment and it will happen again. I'm not confident these guys actually know what they are doing or what the consequences will be. The rules haven't been written so they are just making it up as they go along. I picture a not-to-distant future where the next generation of online users scratches their heads and says, "You shared what with who? What were you all thinking?".
posted by quadog at 10:54 PM on May 8, 2011


-harlequin- All I want to know is, when this bubble bursts, who gets hurt,
People who were long on the stock.

and how can I minimise my exposure to indirect consequences?
Short the stock.
posted by aeschenkarnos at 10:57 PM on May 8, 2011


The NYT article is about potential hardball in a deal with Motorola to provide position data on their handsets

Um, if you actually read the article, it's about where the map data comes from and what revenue Google can bring in from that data:

The results of the field testing convinced Mr. Lee that Google had a good story to tell. The danger, he noted, was that companies might flock to Skyhook after the Motorola and Samsung deals.

“That would be awful for Google,” Mr. Lee wrote, “because it will cut off our ability to continue collecting data to maintain and improve our location database.”

Location data is becoming increasingly important for smartphone applications — like meeting up with friends nearby or finding restaurants and shops in a neighborhood. And advertisements focused by location bring premium rates.


What companies can charge for ads is most certainly related to valuation of sites like Facebook, Google, etc.
posted by Blazecock Pileon at 10:58 PM on May 8, 2011


I think the best analogue for Farmville is not WoW, it's Everquest. It's the trailblazer that will get everyone into the genre, and it does a good job of being addictive. However, it isn't really fun, and eventually someone will figure out how to reproduce their formula while making it worthwhile as an experience. When this happens, they are doomed.

I don't know how long Facebook will remain dominant, honestly. Eventually two things are going to happen - workplaces will ban it for reasons of productivity and bandwidth, and the negative consequences of putting your entire life in the public eye will become common knowledge. These might undermine the popularity.
posted by Mitrovarr at 10:58 PM on May 8, 2011 [1 favorite]


Actually FarmVille has already been surpassed by another Zynga game: CityVille. Which is a dumbed down city building game, but more complex then farmville, apparently. It also has a really redundant name.

Will FB get displayed by something else? I hope so but I wonder whether or not anything new will be able to surpass FB in terms of getting people's parents and grandparents. You might be able to get a tech-savvy group on board, I'm not really sure people will switch unless there's a really clear and obvious benefit. With myspace, people left because the site was butt ugly. If MySpace had been able to fix their layout stuff they still might be as popular as facebook.
posted by delmoi at 11:09 PM on May 8, 2011


Will FB get displayed by something else? I hope so but I wonder whether or not anything new will be able to surpass FB in terms of getting people's parents and grandparents. You might be able to get a tech-savvy group on board, I'm not really sure people will switch unless there's a really clear and obvious benefit. With myspace, people left because the site was butt ugly. If MySpace had been able to fix their layout stuff they still might be as popular as facebook.

The problem is that Facebook makes it harder to share music than MySpace does. You need to kludge around with RootMusic and BandPages. Now it looks like MySpace is only letting you listen to full songs if you're logged in.
Facebook needs a MySpace style interface for music. I can't count how many bands I've seen because of MySpace.
posted by Lovecraft In Brooklyn at 11:17 PM on May 8, 2011


Like they say, if something is free, then we are the product.

Man, I'm so sick of this truism; made doubly so by the knowledge I'm going to be hearing it thousands of times more before it dies. It's simplistic and patronising, and doesn't say anything interesting about people, social media, or advertising.

If we are the product for facebook, then we are just as much the product for - gasp! - television, or papers, or hundreds of advertising platforms throughout history. We are the product, in the facile sense this means, for all advertising. Amazingly, the world hasn't ended, and there's nothing especially tricky or underhanded going on here, any more so than the entire edifice of advertising itself, which is basically built upon subterfuge. Gah. Social media... lawns... punks....

There are interesting conversations and insights to be had about social media and advertising, but this "wake up sheeple!" catch phrase doesn't belong with them.
posted by smoke at 11:18 PM on May 8, 2011 [6 favorites]


Glitch looks very interesting. I like the depiction of the "giants" in the trailer - psychedelic and fractal, in a visual category with machine elves, Evangelion angels, schizophrenic art, mandalas, and suchlike. Things that look and move as though they are 3D cross-sections of objects in 4 or more spatial dimensions.

Further reading here.
posted by aeschenkarnos at 11:54 PM on May 8, 2011


and how can I minimise my exposure to indirect consequences?
Short the stock.


This is horrible advice. Anyone shorting a Facebook IPO will get annihilated. Whatever its long-term future may hold, a savvy company like Facebook teaming up with Golman Sachs equals huge returns at the outset. This will at least continue for several months as all the insiders slowly liquidate and walk away like kings. Only then should you even begin to think of going short. However, it's quite easy to avoid the pain of a potential Facebook faceplant (i.e. Either don't buy it or buy at the IPO and get out while the money is easy) and there are innumerable better things to do with one's money than selling a high-beta mo-mo media darling play.
posted by ferdinand.bardamu at 12:15 AM on May 9, 2011 [2 favorites]


Facebook has tons of problems. The current valuations are nuts and the company will be the AOL of the '10s before the decade is out.
posted by eeeeeez at 12:33 AM on May 9, 2011 [2 favorites]


ferdinand.bardamu This is horrible advice. Anyone shorting a Facebook IPO will get annihilated.
Well yes, if you did it right now you will. Harlequin was asking about what to do when the bubble bursts, in which case, if you're then short on the stock, you'll minimize your losses.

Of course, picking exactly when that will be, that's the trick. :D
posted by aeschenkarnos at 12:58 AM on May 9, 2011


Facebok is making enourmous sums of real money. That's a bit of a change from the last bubble. They've gone from 0 to billions in an incredibly short time. That's a bit different from the dot com bubble. They also seem less interested in going public. Why wold try when they have big cashflows and growth.
posted by humanfont at 2:25 AM on May 9, 2011


I've been playing Glitch for over a year now, and I can confirm its fabulousness. It's fun and whimsical, with gorgeous art and hilarious writing. And yeah, fairly addictive! I've seen it described as Farmville meets Eve Online if directed by Salvidor Dali on acid, which seems about right so far.

It's true that it can get a bit open-ended after a while, but that's not necessarily a bad thing, as there's plenty of room for self-directed quests, with players already creating games, art installations like butterfly pavilions, businesses (with one so far even one based on disruptive acts to the ecosystem!), throwing parties, joining mass 'conga lines', and collaborating on projects to gather resources and craft materials to further expand the world.

And while some criticisms are currently valid, such as a relative lack of Purpose to the game or the vaguely grindy nature of some gameplay elements, keep in mind that the game still has a lot of development in the works. They've spent the past year getting the infrastructure right and doing a lot of work to optimize performance as the game scales up, but there is much, much more to come, including, yes, backstory! And beta has only been open for three weeks, so GilloD, if you really quit a week ago, fair enough, but if you might have quit during alpha, I'd urge you to give it another try to see what's new.

The giants in the trailer are fairly creepy, it's true, but there has been no visual evidence yet in-game of any creepy-eyed being, so don't let that put you off. And finally, if you are interested in playing, sign up and watch their twitter feed, as they often open up a 'queue jumping' link when tests are open. They have also recently allowed players to invite their Facebook friends who have already put their name on the waitlist, and a similar feature for people with friends with email adddresses on the waitlist will be coming later, so there will definitely be opportunities soon to get in on the fun!

More links:

Social MMO Glitch to Monetize Through Android, iOS Apps
L015: Flickr Founders' Farmville Finisher; Glitch in Beta
Official blog
Previous metafilter discussion
The work of (staff artist) Kukubee, a god among men
Player-created wiki (Warning! Spoilers!)
posted by KatlaDragon at 2:49 AM on May 9, 2011 [1 favorite]


Any thoughts from the hive mind of the huge valuations and five-fold or even ten-fold jumps in value in Chinese internet stocks like BIDU, YOKU, SOHU, SINA, etc.? As a casual observer of the stock market, it's really interesting to see it play out. Sure, it's possible that these stocks comprise the next bubble. It's possible that Goldman has been manipulating the market to allow original investors to sell at extremely inflated positions. It's possible that the companies are not releasing accurate financial statements. But the stocks just keep going up and up because if those scenarios aren't true, and if one you are invested in one of the companies that does end up breaking out of the pack, then you've hit a jackpot, because for a relatively low entry point you are now a shareholder in a company with billions of customers.
posted by (Arsenio) Hall and (Warren) Oates at 4:32 AM on May 9, 2011


It also has a really redundant name.

Which ties it to an incredibly* popular product. One reason Zynga has done so well is they grok marketing. Actually, I believe that's reasons 1-102.


* I use this word both in it's conventional and literal sense.
posted by eriko at 5:57 AM on May 9, 2011


Glitch = Habitat

Do you think they even know that they're just duplicating a 20+ year old game?
posted by empath at 5:59 AM on May 9, 2011


I wouldn't invest a dime into Groupon. Maybe their deals are more compelling elsewhere though. Anyway, they are ripe for poaching. Facebook, on the other hand, looks well established and will be hard to displace, but $75 billion? Irrational exuberance.
posted by caddis at 6:28 AM on May 9, 2011


Google is running scared right now

Yes. In regards to social apps generally, and Facebook in particular. Google's current strategy is to pull engineers off stable, popular products (e.g. gmail) and reassign them to do "social stuff". What is social stuff? I'm not sure, but I recall company-wide emails asking for suggestions...
posted by ryanrs at 6:32 AM on May 9, 2011


One problem with the idea of Glitch is that it may be too fantastic for some people. Outside of the Harry Potter books most of the biggest authors write in pretty mundane settings: From Wikipedia's list of best selling fiction authors of those who are still alive we have Danielle Steel, J. K. Rowling, Jackie Collins, R. L. Stine, Dean Koontz, Stephen King, Janet Dailey and Nora Roberts (romance authors) John Grisham, etc. They write about mostly pretty mundane topics set in the real world. The only real exception is JK Rowling, but Harry Potter's world is nothing as odd as the world of glitch.

So, ultimately I don't think the average FarmVille player is going to be interested in such an unusual world.
posted by delmoi at 6:39 AM on May 9, 2011


Google's biggest problem with Facebook is probably retaining top talent.
posted by delmoi at 6:39 AM on May 9, 2011


It was made known that if you left Google for Facebook, but then changed your mind, you'd be welcomed back.

(I should mention that my info may be out of date. I do not work for Google.)
posted by ryanrs at 6:45 AM on May 9, 2011


I was afraid that Niven's wireheads would become a reality, but the truth is that we don't need to have a wire implanted in the pleasure centres of our brains in order to behave like Skinner rats. That's the most frightening discovery of the last 20 years.

We just need a dopamine-triggering reward connected to a slightly randomized task. It's gambling but not with money (which you can run out of) but with time -- which you have an infinite supply of.

Until you die, with dishes piled in the sink, lawn unmowed, dirty laundry everywhere and your pets slowly starving until they decide to eat your corpse. Watching the trailer for Glitch made me itch & squirm in my seat with a repressed need to get-the-fuck-away.

I might have mentioned before that there will probably be a bunch of humans who do this "clicking" stuff most of their lives, never really living, and everyone else will have a rather emptier planet on which to enjoy the sunshine and fresh air and live music and fucking.
posted by seanmpuckett at 7:29 AM on May 9, 2011 [3 favorites]


> Recent venture capital fund raising rounds have placed very high valuations...

This strikes me as less a case of the thing being valued becoming more valuable and more a case of the unit of valuation shrinking. Dollar increasingly transformed into a kind of peso, valuations denominated in dollars go through the roof, duh. Which works the other way around also: if FB's market cap turns out to be 75 billion of these peso-ified dollars after their IPO, that will directly contribute to a Big Mac costing you 15000 of the same units.

But then I also think the cake is a lie and the princess isn't in any of the castles.
posted by jfuller at 7:34 AM on May 9, 2011 [1 favorite]


I might have mentioned before that there will probably be a bunch of humans who do this "clicking" stuff most of their lives, never really living, and everyone else will have a rather emptier planet on which to enjoy the sunshine and fresh air and live music and fucking.
Well, how much worse is that then just sitting on a couch watching TV hour after hour, day after day?
posted by delmoi at 7:36 AM on May 9, 2011 [1 favorite]


more a case of the unit of valuation shrinking. Dollar increasingly transformed into a kind of peso, valuations denominated in dollars go through the roof, duh.
Just out of curiosity, do you know what the actual inflation rate is right now? Because I keep hearing this "The dollar is getting debased!!" stuff from random people and it's all very weird. The reality is the inflation rate is very low right now and has been for a while. $1 in 2000, for example is worth just $1.25 compared to 2010. A $77 billion dollar valuation would be equivalent to a $60 billion valuation in the dot-com bubble.
posted by delmoi at 7:40 AM on May 9, 2011 [1 favorite]


What companies can charge for ads is most certainly related to valuation of sites like Facebook, Google, etc.

This is perfectly backward - the valuations of advertising-based companies is related to how much they can charge for ads. And how many ads they can display.

At any rate, to the original point, yes, these valuations are getting frothy. Zynga, love them or hate them, does have a pretty strong business model. I think the company has some reasonable fundamentals, but there's too much money chasing too few investment opportunities for people who want to be part of the next Google. Ergo, soaring valuations. I personally think part of the problem is people who can't tell the next Facebook from the next MySpace.
posted by GuyZero at 7:54 AM on May 9, 2011


I might have mentioned before that there will probably be a bunch of humans who do this "clicking" stuff most of their lives, never really living, and everyone else will have a rather emptier planet on which to enjoy the sunshine and fresh air and live music and fucking.

I've never been fond of this line of thinking; perhaps I'm biased because of my childhood being littered with mandatory "take a break from what you enjoy doing to spend time outside! This is for your own good, don't come back in until you're enlightened and normal like the other kids! happy!" It made me extremely bitter as a teen, considering that dealing with other people in meatspace made me want to kill myself. I admit it's a personal bugaboo, but when people denigrate the advent and advances of computing and online social interaction that gave me (and continues to give me) an environment wherein I wasn't so alien as "not really living" it makes me kind of want to scream.

But I like to think that the modern age can provide satisfaction for all parties: I'll stay here with my device from the future, tethered to the font of all recorded human knowledge, as a conduit through which I can efficiently navigate the world around me, and while I'm exchanging ideas with other humans all over the planet via SMS and being drip fed a constant stream of awareness, other people can sit in the woods, poke at things with sticks, and feel good about themselves by telling me how much I'm "missing"
posted by Uther Bentrazor at 7:58 AM on May 9, 2011 [3 favorites]


more a case of the unit of valuation shrinking. Dollar increasingly transformed into a kind of peso, valuations denominated in dollars go through the roof, duh

This is not an issue of dollar depreciation. As pointed out in the very first comment, Zynga, a 3 year old company with a workforce of ~2K that deals in web based virtual goods is now valued at twice that of EA, a ~30 year old company with ~8K employees and FY2010 revenue of ~3.7 billion. Regardless of the underlying swings in the currency, we can clearly spot an overly aggressive valuation by comparing companies in similar sectors.

With so many of the social media companies not yet taken public, is the bubble even a concern?

Normally, I would say yes -- however, in this case, we have employees of these companies selling privately held stock via second market. The trouble here is this is unregulated and is not a level playing field. Just because one employee sells x shares at a price of y$, this does not mean the remaining stock will fetch this price nor does it provide a valuation for the company as a whole (as much as some sellers would like you to believe).

Normally, the end of a bubble (i.e. pump and dump) is when the madness cascades to the general public via an IPO. This bubble may be unique in that the valuations deflate before Joe Six-Pack ever gets a chance to buy a slice of the social media pie. We can only hope this is the case.
posted by FuturisticDragon at 7:59 AM on May 9, 2011


Uther Bentrazor, I'm that awkward kid too. Yet, as someone who lives in cyberspace (what a trite term that seems now) most of the time, that maybe 75% of my life satisfaction comes from things I do outside of it. Anecdata and all, but meatspace is really, really nice. And I worry.
posted by seanmpuckett at 8:32 AM on May 9, 2011


Madness. And how do we know, without public filings, that Facebook is really making any real money? I mean I am sure the static "Fios" ad I am looking at cost a little coin, but is there really that much ad money in "getting ripped" ads, etc? Also, I would note that that is probably the first time I have looked at an ad for more than a second and most of my FB time is spent on my iPhone- where there are no ads. AOLs of the 10's indeed.
posted by T10B at 8:41 AM on May 9, 2011


I feel the same way you do, except the exact opposite, worries and all.
posted by Uther Bentrazor at 8:47 AM on May 9, 2011


hi GilloD -

For all of you going LOL ANYONE CAN MAKE FARMVILLE the answer is: No, they can't. It's an unbelievably well engineered game

I'm interested, can you elaborate on this?
posted by eeeeeez at 9:12 AM on May 9, 2011


I'm still trying to figure out which is more valuable: Facebook as a communication instrument to socially engage my peers OR my special snowflake value in-aggregate to Facebook.

I don't think FB will be crying when I leave but it'll make it harder for me to find out what music events are happening.
posted by wcfields at 9:34 AM on May 9, 2011


For all of you going LOL ANYONE CAN MAKE FARMVILLE the answer is: No, they can't. It's an unbelievably well engineered game

I'm interested, can you elaborate on this?


Jonathan Blow talked about this in one of his lectures. They constantly use A/B testing to split the player base into different segments where they try out changes to the interface, game rules, pricing, etc, anything that generates more revenue stays in the game.

The Zynga designers are actually playing a much more interesting and profitable game than the players are. The players are just tokens to them that they extract money out of.
posted by empath at 9:41 AM on May 9, 2011


Zynga's development method.
posted by empath at 9:44 AM on May 9, 2011


I personally think part of the problem is people who can't tell the next Facebook from the next MySpace.

You mean everybody? Or do you think Facebook has broken through, and is now entrenched like eBay and ... Well, by my reasoning eBay is head and shoulders more entrenched than any other internet company ... Let's say like eBay, Amazon and Google.
posted by Chuckles at 9:59 AM on May 9, 2011


Back of envelope calculations, using half-remembered and probably wrong stats...

Number of Facebook users.... say 500m.

Average profit per user pa.... finger-in-the-air guess... maybe $5.

Profit pa... $2.5bn

Likely growth rate... who knows?

10 year profit... $25 - $50bn+?

Supposed Facebook valuation: $75bn.

Well, that is not so obviously and ludicrously over-valued as we saw during the dot com bubble. On the other hand one of the characteristics of the bubble is to value most every company as if it's going to be a mega-success, when by definition only a few of them can be.
posted by philipy at 10:38 AM on May 9, 2011


> This is not an issue of dollar depreciation.

Exactly. The value of the dollar, quote unquote, embraces considerably more than what a beancounter will count at any given moment; and letting the market decide, via an IPO, that the Latest Virtual Online Epiphenomenon is worth more dollars that there are stars in the sky and sands on the beach just leads to mentally pidgeonholing dollars in with the other forms of dust and dustbunnies. Beancounters will see measurable effects in due course.


But, inflation having been brought up...

> do you know what the actual inflation rate is

For consumers? For producers? Commodities buyers? Gold bugs? Folks buying yuan with dollars? If you're Ben Bernanke? If you're Paul Krugman? tl;dr answer, yeah, pretty much.

> right now?

More to the point, do I care what the instantaneous first derivative of any time series curve is? Not real much. I tend to take a rather longer view.

In the longer view inflation is in the interest of all governments ever, left or right, so it's going to happen and smart people count on it. When I was 18 they gave me a white Corvette. It cost $7000. You might like a pretty closely comparable Corvette today? You can still get white! Plan on spending about $70,000. Even if you have no interest in 'vettes, even if you think 'vettes are evil, if you are a young person busting your ass to try to save something--anything--for the future it might influence your planning to be aware that the dollar you put away today will be worth about a dime when one of your grandkids asks for college help or business start-up help or medical help. That's actually one of the things that might tempt you to buy a piece of FB at the IPO, to hope you can invest well enough to preserve the value of your savings maybe as fast as inflation destroys it over your lifetime.

That's what I mean when I say peso-ification.

(N.b before anybody squawks "The CRB only started up in 1957, how can you chart it back to 1450?" it's a chart of blended time-series data with the non-CRB sources for 1956 and before listed. Considered entirely valid by everyone including me when historical climatologists do it and then label their graphs "global temperature.")
posted by jfuller at 10:47 AM on May 9, 2011 [1 favorite]


If facebook was really valued at the rates discussed I doubt they would have sought a round of investment last year. It would be more prudent to borrow money than to sell its stock.
posted by dgran at 11:15 AM on May 11, 2011


If facebook was really valued at the rates discussed I doubt they would have sought a round of investment last year.

A stock's valuation is its last sale price multiplied by the number of shares. Banks don't lend you money at your valuation, certainly not for private companies.
posted by b1tr0t at 6:19 PM on May 12, 2011


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