Will Facebook become one of the most profitable companies in the world?(namesake.com)
namesake.com
Will Facebook become one of the most profitable companies in the world?
http://namesake.com/conversation/9b3fe6d6-54ae-11e0-ae74-12313f014066
8 comments
Shorm-term, may be. Mid-term, may be. Long-term, I hope not.
Yes -- when a single organization owns the connections, interests and geographical data of 600 million people -- it's inevitable.
No other entity has amassed this amount of data before.
No other entity has amassed this amount of data before.
Why is it inevitable? They already run an ad network and their revenue's are nowhere near, for example, Google's. How else can they monetize this data?
They've barely scratched the surface. And it's not just an ad network...
- virtual currency - daily deals - search integrated directly into the experience
and that's just off the top of my head
- virtual currency - daily deals - search integrated directly into the experience
and that's just off the top of my head
Even with those three products, I still find it hard to believe they'd be one of the most profitable companies in the world. If you look at the top 50, it's filled with mainly oil companies, banks, and hardware producers (Microsoft being an exception). Google crept in at 47 due to AdSense, which I think Facebook could overtake.
I'm not saying Facebook cannot be wildly profitable, I just don't think it'll come close to the top 10 (what I'd consider to be "the most profitable companies in the world").
I'm not saying Facebook cannot be wildly profitable, I just don't think it'll come close to the top 10 (what I'd consider to be "the most profitable companies in the world").
How many of those 600M monthly active users are fake accounts created by webcam and dating site spammers, and mafia wars addicts?
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No.
It is unlikely they will ever get close to energy (oil) companies. and by the way they need to IPO so that we can know what their revenue and expenses are.
One of the most profitable, perhaps...but I predict that if Dropbox stays independent - it will easily become the most profitable.
Dropbox adds little value to my life. Unless the company or technology evolves in ways I can't foresee, I would never pay for it.
Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.
Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.
Dropbox is a killer application if you have multiple computers or don't want to care about keeping backups. It's completely removed my need for flash drives, caring about which computer I have documents on, and so forth. I wouldn't underestimate that; I recall hearing that they've hit $100M/year in profits[1], and I expect that they've got quite a ways to grow. However, saying that they'll be the most profitable company in the world doesn't make sense to me - that would just take too much growth to be realistic.
For some context, the most profitable company in the world in 2010 was Gazprom[1], the largest exporter of natural gas in the world, with 24,555.7 million.
EDIT: Gazprom was the most profitable in 2009, not 2010, as pointed out below.
[1] http://www.businessinsider.com/dropbox-revenue-2011-3
[2] http://money.cnn.com/magazines/fortune/global500/2010/perfor...
For some context, the most profitable company in the world in 2010 was Gazprom[1], the largest exporter of natural gas in the world, with 24,555.7 million.
EDIT: Gazprom was the most profitable in 2009, not 2010, as pointed out below.
[1] http://www.businessinsider.com/dropbox-revenue-2011-3
[2] http://money.cnn.com/magazines/fortune/global500/2010/perfor...
This is not something that will happen over night. You meant to say that Gazprom was the most profitable in 2009.
Exxon did $30B profit in 2010. - http://www.google.com/finance?q=NYSE:XOM&fstype=ii
Exxon did $30B profit on $375B revenues. Net profit margins of less than 10%.
Of course we won't know until Dropbox releases their financials, but I strongly believe that they will be a bombshell when they are released. Nothing like anything we have ever witnessed.
I would not be surprised if their Net Profit margins are 30% - 50%.
At those rates, all it takes is for them to be doing revenues of $100B to exceed Exxon's profit take in 2010.
I know it seems a bit far fetched now, but so did every other technology giant when they were in the budding phases.
I think it would be foolhardy to bet against them.
Exxon did $30B profit in 2010. - http://www.google.com/finance?q=NYSE:XOM&fstype=ii
Exxon did $30B profit on $375B revenues. Net profit margins of less than 10%.
Of course we won't know until Dropbox releases their financials, but I strongly believe that they will be a bombshell when they are released. Nothing like anything we have ever witnessed.
I would not be surprised if their Net Profit margins are 30% - 50%.
At those rates, all it takes is for them to be doing revenues of $100B to exceed Exxon's profit take in 2010.
I know it seems a bit far fetched now, but so did every other technology giant when they were in the budding phases.
I think it would be foolhardy to bet against them.
Hmm. There are about 2 billion internet users, and Dropbox's cheapest paying plan is $99/year. Assuming 50% profit or so, and that no one buys the more expensive plan, it would take a billion paying customers to hit $100B/year, 50% of everyone with internet access. It would definitely be a gradual progression, but probably doable, especially if they branch out into other areas - though I can't think of anything obvious, other than licensing the technology to big businesses for internal stuff. Of course, they can certainly afford to experiment.
Well there are 2 billion internet users - i.e. individuals. But each individual has multiple functions.
E.g. I have a dropbox account at home, and had one for work. So did my boss, and some other coworkers.
So while there are 2 billion internet users, there are many organiztions - profit, non-profit, ngo, etc - which makes the pie even bigger.
E.g. I have a dropbox account at home, and had one for work. So did my boss, and some other coworkers.
So while there are 2 billion internet users, there are many organiztions - profit, non-profit, ngo, etc - which makes the pie even bigger.
In the tech industry, maybe, but in the world?
Oh absolutely. Dropbox is reaching the point where now my father and mother use it. It hasn't reached Facebook levels yet (by that I mean, my grandmother ;)), but it is getting there.
But with each incremental user, Dropbox's value increases in an e^x fashion.
For more on why I think so, here is a more detailed breakdown: http://marcgayle.com/how-dropbox-is-printing-money
There is no reason that Dropbox's growth will slow any time soon. It is a fabulous product, and has the referral system built-in.
It's the closest elixir to magic I have seen in recent times.
But with each incremental user, Dropbox's value increases in an e^x fashion.
For more on why I think so, here is a more detailed breakdown: http://marcgayle.com/how-dropbox-is-printing-money
There is no reason that Dropbox's growth will slow any time soon. It is a fabulous product, and has the referral system built-in.
It's the closest elixir to magic I have seen in recent times.
I don't think your parents are typical, honestly.
I bet if I surveyed my office, nobody here would have any clue what it was. Honestly, the only reason I use dropbox is that it makes getting photos off of my iPhone easy.
I bet if I surveyed my office, nobody here would have any clue what it was. Honestly, the only reason I use dropbox is that it makes getting photos off of my iPhone easy.
Well they aren't especially tech-savvy, but I share files with them so they have it installed because of me.
My point is that at the rate at which it is growing, it literally is just a matter of time before all your coworkers and parents are using it.
It provides a peace of mind knowing that you can easily access your files - that is difficult to find elsewhere.
As technology continues to proliferate and more lives move online, people will likely use dropbox.
The more people that use Dropbox, is the more profitable they will be.
That is to say, their profit margins increase with the number of users they use - and that's not just because their unit costs decrease.
It's much more than that.
My point is that at the rate at which it is growing, it literally is just a matter of time before all your coworkers and parents are using it.
It provides a peace of mind knowing that you can easily access your files - that is difficult to find elsewhere.
As technology continues to proliferate and more lives move online, people will likely use dropbox.
The more people that use Dropbox, is the more profitable they will be.
That is to say, their profit margins increase with the number of users they use - and that's not just because their unit costs decrease.
It's much more than that.
Oil's pretty magical too!
Seriously, Dropbox need >200 million users paying $9.99/month to match the top oil companies even if their costs per user were zero. That's more people paying for Dropbox than using spectacularly good mature free services like Gmail.
Not that I'd be too downhearted by Dropbox's reported $100 million revenues if I held their stock.
Seriously, Dropbox need >200 million users paying $9.99/month to match the top oil companies even if their costs per user were zero. That's more people paying for Dropbox than using spectacularly good mature free services like Gmail.
Not that I'd be too downhearted by Dropbox's reported $100 million revenues if I held their stock.
Ah hah! This is why it is so brilliant. It's easy to assume that's the only way they can reach those figures.
They have already started to diversify their revenue lines: https://www.dropbox.com/team_create
$795/year for a team of 5.
Besides, in a day and age when a social network has 650M users, I don't see why it is conceivable that in 5 - 10 years Dropbox could have 200M paying users.
Apple just announced that it has ~200M credit cards on file. The largest stash anywhere.
In 5 - 10 years, that will look small in comparison to everybody else.
The more internet connected devices come out, is the more Dropbox's value proposition increases.
They have already started to diversify their revenue lines: https://www.dropbox.com/team_create
$795/year for a team of 5.
Besides, in a day and age when a social network has 650M users, I don't see why it is conceivable that in 5 - 10 years Dropbox could have 200M paying users.
Apple just announced that it has ~200M credit cards on file. The largest stash anywhere.
In 5 - 10 years, that will look small in comparison to everybody else.
The more internet connected devices come out, is the more Dropbox's value proposition increases.
I hope it does like you say, it's an awesome product.
if their ARPU has as much potential for growth as mentioned in the first comment of the conversation, they could easily surpass Google.
They have to figure out how to monetize a lot more $ per user to be very profitable in the long term.