That was my response as well, so they generate a slightly less ginomous net revenue and that is a problem how exactly.
Looking at worst case numbers it looks like Facebook will be close to 'accumulating cash' mode at the outset. That is a pretty good thing.
Now it would be nice to get some more visibility into their execution against advertising system changes but this reads more like a 'place' piece where the author hopes that if things go good people will forget they ever read it, and if they go really bad he'll be on record early 'predicting' it and will be able to demand huge consulting fees :-)
Of course I have no idea behind the motivations of the author, I just wondered how he can look at $5B in revenue and not be "well ok, their model is working at least."
The biggest reason Facebook has a 100 Billion valuation is because people expect ad revenue to grow rapidly. If there are signs that's slowing down now, before they even go public, it has a huge impact on their valuation. 100 Billion is a very generous valuation, even if you expect Facebook to have tremendous growth, it's an outrageous valuation if you expect them to stay the same (or shrink).
Well if they do manage to do 5B$ revenue this year 100B would be a 20x multiplier on their revenue. Seems in line with other tech companies. But we'll have to wait until they start pushing out those quarterly reports to be sure.
Looking at worst case numbers it looks like Facebook will be close to 'accumulating cash' mode at the outset. That is a pretty good thing.
Now it would be nice to get some more visibility into their execution against advertising system changes but this reads more like a 'place' piece where the author hopes that if things go good people will forget they ever read it, and if they go really bad he'll be on record early 'predicting' it and will be able to demand huge consulting fees :-)
Of course I have no idea behind the motivations of the author, I just wondered how he can look at $5B in revenue and not be "well ok, their model is working at least."