Why I Agree With Jason Calacanis’ Assessment of Facebook

I Usually Don’t Agree With His Point of View…

But when your right, your right. And Jason Calacanis is dead on with his Facebook Reality Check post. Let’s take a look at his points and why I could not agree more.

1. Facebook Is Not Worth $100 billion - Okay, this is an easy one to agree with. Honestly even a company in the hottest sector of the hottest marketplace in the hottest business climate would not be worth 100 billion on $100 million in revenues and $25 million in profits. Multiples like that just do not exist. Personally, I think Facebook is probably going to cash out for around $3 billion.
2. Facebook Will Crush Google - Yeah and this site is going to crush TechCrunch. Again, this is just so unrealistic. No one is going to crush Google at Google’s own game. The best thing that Facebook could do is work with Google and leverage Google’s search technology inside of Facebook (so you can search the web from within Facebook, making it more of a “life portal” than a social network).
3. Facebook will Crush MySpace - I have been building web properties for a few years now and I can tell you that getting traffic is not easy and at the scale that these two sites are at it is is even more difficult. As Jason points out, Facebook would have to double their traffic in order to catch MySpace. Going from 30 million to over 68 million visitors a month is not going to happen anytime this decade. At best Facebook is a better platform, but I do not think it will eclipse MySpace if for any other reason then the MySpace has had to long of a head start to be caught.
4. Facebook is More Important Than The Graphical User Interface - Facebook is not that important in the grand scheme of things. It is a great platform, but it is not revolutionary. At best Facebook is evolutionary.
5. Top Facebook Applications Are Worth $500 million - If Facebook is realistically valued at 1 to 5 billion, then that means that 10 to 50% of Facebook’s total value is held within applications they do not even own. This math does not work. Given that most Facebook applications are not making money it does not make sense to put that sort of price tag on them.
6. Facebook is An Amazing Product - Yes it is. It is the most usable, flexible and unique of the major social networks. It has tremendous potential and great upside, but it is not the messiah that many make it out to be. Simply put, Facebook is an awesome utility.

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