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Comment by jitbit | Hacker News Reader

$1.4 billion, mates. $1.4 billion for a business with manufacturing plants, complicated global logistics... Now let me remind you that Facebook is valued 85 (!) times more.. o_O

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Stock market valuations are almost useless... unless you work with stocks.

If Facebook disappeared tomorrow, nothing of value would be lost and another web site would take its place.

Not really, what disappears is the Facebook "potential" to make money, and the valuation is done thinking at this possibility. Now if you look at it in this way, billions of people using Facebook can be monetized probably much better in the long run compared to selling a new HD from time to time to millions.

What amazes me is that people actually think this is the right way to look at things...

Its the market...

What's the market? The way people look at things. ....

Meh. It's an opt-in system.

If somebody is more concerned with something else there's nobody forcing them to focus on making money.

Actually, it's not purely opt-in. Remember when our tax money "rescued" the banks because of their reckless lending/investments less than two years ago?

Ouch. Valid point.

That potential will be translated in quarter results sooner or later. I think the gap expressed in potential and real stock value between customizers who use your product and non paying users who consume your product is too big nowadays and will be narrowed abruptly.

"""billions of people using Facebook can be monetized probably much better in the long run compared to selling a new HD from time to time to millions."""

As if this has worked well in the past for other hyper-valued web crap...

(Which reminds me, anybody remembers that ole VA Linux company? Where are they now?)

Long story short: http://en.wikipedia.org/wiki/Geeknet

VA Linux is now Geeknet and is basically ThinkGeek and a few other minor properties (/., sourceforge, freecode). They've shed all of their other business lines, hardware, consulting, Animation Factory, etc.

Virtually all of their business news for years has been ThinkGeek related (which is doing pretty awesome), and various corporate level failings such that all of their other properties have always been a drag on the company, frequently throwing it into the red despite having an extremely profitable e-commerce division.

> Now let me remind you that Facebook is valued 85 (!) times more.

They aced the swimsuit competition in the Keynesian beauty contest. http://en.wikipedia.org/wiki/Keynesian_beauty_contest#Overvi...

... until the next babe comes along.

Facebook is the largest seller of online display advertising in the world (bigger than Google), and they've still got a relatively immature advertising platform.

Hard drives are also commodities, which means they sell near cost. If Samsung charges $10 more, people buy from another maker. Facebook is almost the exact opposite: its userbase means that, right now, there is no homologous replacement (including Google+, because they don't have the users).

Which doesn't mean FB is "worth" what it's worth—to me it seems overvalued, but then again no one is holding a gun to my head and forcing me to buy its stock. The nice thing about markets is that we can bet with our money, or not.

On the other hand, online user bases are notoriously mercurial. Facebook's valuation implies an assumption that Facebook won't fall victim to the forces that have claimed every social site to come before it.

That's a pretty gutsy assumption, considering Facebook could plausibly be seriously damaged by something as simple as kids deciding they don't want to hang out at the same place their parents do.

You do realize you could say the same thing about pretty much every company in existence. No-one ever stays on top forever, it's a question of how long you can stay on top for and how much profit you can generate over that period.

Further problems with the hard drive market:

1) SSDs are taking over the market, and that favors flash suppliers like Samsung. 2) All the research dollars to increase sizes just drive the prices down. 3) At some point soon, there will be no need for further drive size increases. Unless someone comes up with a more space-hungry format than 1080p video.

In reference to #3, there are 2k and 4k video formats that will likely make the jump to consumer level soon. Saw an 80" LCD TV the other day that looked pixellated - higher res would help.

A company that makes really crappy disk drives. I've RMA'd so many of the newer Samsung's I've lost count. At this point, certain models fail so much that I toss them when they fail, and I only ever use them in mirrored arrays (with other non-Samsung's!).

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