Most consumers dont buy from Facebook | Outbound Telemarketing News and Info

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Most consumers dont buy from Facebook | Outbound Telemarketing News and Info

Given that Facebook recently filed to go public (probably in May 2012), this could be a potential problem for investors. They are seeking to raise 5 billion dollars on a valuation of 100 billion dollars, to cash out early investors.

Although Facebook has over 850 million users and they have done a great job in growing the user (consumer) base, they are still having great difficulty in converting those users to buyers of advertiser services. This coming from an outbound telemarketing sales guy.

Let me put this in context. When Google went public they valued the company share price (at 85.00 per share) at 5 times sales, and Amazon went for 2 times sales. Facebook will be going for 25 times sales! Their revenue model is still being figured out. It will be very difficult to justify the valuation of 100 billion dollars. Facebook at this time is struggling to monetize their user base. Which means to generate money on each user.

Let's look at active revenue now for Facebook. For each user they are generating about
$6-7 dollars in revenue. That is lower than what, the online music site gets per user, and slightly above what Zynga, the social gaming site generates. But Facebook's users are massive in comparison.

You would think the time that people spend on Facebook that the dollar spend per user would be higher than Google. Google is at about $16.00 per user. Google has been around longer and has figured out their revenue model. Facebook is still trying to figure it out.

Much of the Facebook IPO is hype, and although they have a lot of potential, they still need to figure out how to covert users to purchasers of advertiser products and services. Because that will drive revenue and the share price.

My assessment is that people go to Facebook to be social and don't pay attention, at least today, to advertisers. Those are they ads that show up on the right of your screen when on Facebook. What this IPO will do, will be to get Google nervous. Because Facebook and Google are are competing for your time, your mind-share and your money.

Next time you go to Facebook look at the ads that show up on the right of your screen to see how you are being targeted by advertisers based on gender, age, professional status and hobbies.

Gilbert Pagan
Lease A Sales Rep - Outbound Telemarketing Experts

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