Re-writing The Rules

“Late last year Mark Zuckerberg, the 24-year-old CEO of social-networking phenomenon Facebook, got onstage before a Madison Avenue crowd and declared that he was leading a once-in-a-century media revolution. Long story short: The revolution hasn't panned out. Six months later, advertisers could be forgiven for mistaking Facebook for a smaller MySpace or a much larger Friendster (remember them?). And far from changing media as we know it, the virtual home of Superpokes, Funwalls, and other such time wasters is showing cracks in its foundation…

“Facebook's biggest concern has to be the blasé attitude that media buyers have toward the company. Microsoft paid $240 million for 1.6% of Facebook, giving the startup an eye-popping valuation of $15 billion; according to media reports, as of early May the Redmond crew has been exploring ways to buy Facebook outright. But Microsoft's ardor obscures the fact that Facebook generated only $145 million in revenue last year, according to eMarketer, much of it from an ad deal with Microsoft. MySpace, by contrast, had $510 million in revenue. Facebook ads can sell for as little as 15 cents per 1,000 impressions (CPM) -- compared with the estimated $13 on Yahoo properties. And even at those bargain prices, marketers are reluctant to spend money on a venue where users aren't paying attention. Jeff Ratner, a managing partner at WPP's MindShare Interaction, whose clients include Motorola and Unilever, spends less on Facebook than he did six months ago... ‘Facebook doesn't look that different,’ Ratner says. ‘It just becomes another buy, and there are cheaper, more efficient ways to reach eyes.’”

(“Finding Cracks in Facebook.” Jessi Hempel. Fortune: May 26, 2008. pg. 37)

WE ARE DIFFERENT. The (old) rules don't apply to us. We are re-defining the rules of the game. We are re-defining the industry. Old calculations don't apply to us. We are introducing a new calculus.

It will be different this time.

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