Whats in a name? Cash lots and lots of cash that’s what.

 Alot or at least it seems that way. Tech Crunch reported that Facebook is looking to get funding using a value of $2bn. Lets just dwell on that point. $2bn for what? A company that has not turned profit yet? $2bn for the potential to make money from the reported 200m users??

Image representing Facebook as depicted in Cru...
Image via CrunchBase

 Having that many users is a great achievement but no revenue streams have been found that are strong enough to bring Facebook back into the black. According to Tech Crunch Facebook is burning $20m a month in cash so that $2bn Valuation must be based on the the brand and its potential. $2bn for a name, thats a little excessive.

 Five years on, not one cent in profit and over $500m in investment. The future may not be that rosy unless Facebook can find how to monetize their offering. There are a number of different approaches Facebook could take from a self driven advertising based model, advertising tie ups with someone like Google, charge for the service or become a platform and let others use the service to sell applications or products and take a small percentage. The jury is out but the clock is ticking. A company can only survive so long burning $20m a month.

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Whats in a name? Cash lots and lots of cash that’s what.

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Dansette