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Dark Days Ahead For Facebook and Google? 215

Posted by timothy
from the feel-free-to-send-me-your-discarded-shares dept.
An anonymous reader writes "Dallas Mavericks owner and media entrepreneur Mark Cuban thinks he knows the reason for Facebook's disappointing IPO; smart money has realized that 'mobile is going to crush Facebook', as the world's population increasingly accesses the Internet mostly through smartphones and tablets. Cuban notes that the limited screen real estate hampers the branding and ad placement that Google and Facebook are accustomed to when serving to desktop browsers, while phone plans typically have strict data limits, so subscribers won't necessarily take kindly to YouTube or other video ads. Forbes' Eric Jackson likewise sees a generational shift to mobile that will produce a new set of winners at the expense of Facebook and Google."
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Dark Days Ahead For Facebook and Google?

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  • Obvious (Score:4, Insightful)

    by Anonymous Coward on Friday May 25, 2012 @06:50PM (#40115061)

    Flame baitin article is flame baitin.

  • by MrEricSir (398214) on Friday May 25, 2012 @06:51PM (#40115079) Homepage

    It's too bad they don't make phone software or something that could help them pick up at least a little market share in that area, amirite?

    • by mangu (126918)

      It's too bad they don't make phone software or something that could help them pick up at least a little market share in that area, amirite?

      Exactly. Google is doing way more to get into the mobile business than mobile companies are doing to enter the search business.

      Search? What search? How, exactly, does one do search in a mobile app, other than googling it?

      • Re: (Score:3, Funny)

        by Anonymous Coward

        It's too bad they don't make phone software or something that could help them pick up at least a little market share in that area, amirite?

        Exactly. Google is doing way more to get into the mobile business than mobile companies are doing to enter the search business.

        Search? What search? How, exactly, does one do search in a mobile app, other than googling it?

        Fuck I don't know. One thing we can all agree on: Facebook can't possibly die fast enough. DIE FACEBOOK DIE. May all its investors and employees weep and march penniless to the nearest welfare line. May Zuckerberg be followed around with a live TV camera everywhere he goes everything he does and i do mean everything. "Oooh he's taking a shit on Channel 3!" He does like his privacy you know. May his wife divorce him for a morbidly obese redneck truck driver after first cheating on him with his best fr

        • Re: (Score:2, Insightful)

          by marcosdumay (620877)

          The funny thing is that Facebook is only having a hard time on mobiles because it choosed to.

          It can't be that hard to create a passable mobile interface for Facebook, even if you take some space for ads. Lots of people do create good interfaces for lots of different stuff, and there is nothing unique on FB about that.

        • by rtb61 (674572)

          'ER' a lot of the insiders have sold already, Zuckerberg has dumped a billion dollars worth on the suckers, Goldman Sachs has sold 50% of it's holdings, M$ has sold, etc. etc.. If fact insider dumping of stock is already severely impacting the price which is why they have 'slowed' down their sales, seeing if it will recover, if not expect another major insider sales driven drop.

          I'd be really suss about the major 'outside' purchases, what really motivated the corporate executives to decide to buy that dog

    • by ShieldW0lf (601553) on Friday May 25, 2012 @06:57PM (#40115171) Journal

      You just don't get it. Mobile is going to hire Steve Ballmer to crush them. With a chair.

    • by Trepidity (597) <.delirium-slashdot. .at. .hackish.org.> on Friday May 25, 2012 @07:04PM (#40115251)

      Also, some of the most popular mobile services. Pretty much the #1 most useful thing about a smartphone is being able to access Google Maps while you're out.

    • Re: (Score:3, Insightful)

      Giving it away for free, but making up for it in volume. That's not a very good business plan.

      • by hkmwbz (531650)
        That sounds a lot like Google's business plan for their search engine. Give it away for free, and make ads dirt cheap. But get enough ads and all those tiny sums turn into huge piles of cash. Why wouldn't that work with Android?
        • That sounds a lot like Google's business plan for their search engine. Give it away for free, and make ads dirt cheap. But get enough ads and all those tiny sums turn into huge piles of cash.

          The point is that even IF Google continues to be the search engine of choice on Mobile (as it will on Android), they still make way less than they do on the desktop. Think of how much space on the desktop Google they devote to ads in the result. Now do a search on a mobile device - there is hardly any space left for a

          • by ThatsMyNick (2004126) on Friday May 25, 2012 @10:28PM (#40117113)

            Now do a search on a mobile device - there is hardly any space left for ads anywhere after you display the results, perhaps one or two...

            So that's an order of magnitude reduction in ad revenue for Facebook and Google, even IF they remain sole search provider...

            This would mean the top spot would pay an order or two more for the placement on mobile. One more flaw in your argument is Google is not paid per ad impression. Google is paid only if the ad is clicked. Google can collect lot more information about you on mobile than desktop, and can accurately determine which ad you are likely to click (in a less sinister way, which ad you would like). So if they work it out right, they might end up make more revenue on mobile than desktop (even considering only search, and ignoring all ad supported apps on the market)

          • by tlhIngan (30335)

            The point is that even IF Google continues to be the search engine of choice on Mobile (as it will on Android), they still make way less than they do on the desktop. Think of how much space on the desktop Google they devote to ads in the result. Now do a search on a mobile device - there is hardly any space left for ads anywhere after you display the results, perhaps one or two...

            Google owns AdMob, THE largest mobile (hence the "Mob" part of their name) advertising network around. The mobile may have less r

    • by slew (2918)

      It's too bad they don't make phone software or something that could help them pick up at least a little market share in that area, amirite?

      Maybe google (or facebook) should just suckit in and buy Twitter...

    • by sribe (304414)

      It's too bad they don't make phone software or something that could help them pick up at least a little market share in that area, amirite?

      Sure, but the point is that it's much harder to slip ads in on a phone, without overly annoying users, than on a larger display, regardless of whether it's via web site or native app.

  • by maroberts (15852)

    ...at the same time mobiles are able to establish higher rate connections, and it would probably make sense for Google to purchase a mobile phone operator or assist an one into providing much larger data limits than currently exists. Then the limits discussed above disappear and Google/Facebook resume letting the good times roll .....

    • Re:But (Score:5, Interesting)

      by TheEyes (1686556) on Friday May 25, 2012 @07:50PM (#40115809)

      I think that was their plan, but they can't now because they own Motorola. One of the US FCC's big firewalls (the only one, it seems, that they care to enforce anymore) is that a carrier cannot manufacture their own phones, essentially to prevent the kind of massive fail we saw in the 70s with AT&T.

      As far as I can tell, Google's plan was to buy up massive amounts of darknet (already done), set themselves up as an ISP (pilot project in Topeka), and gobble up enough spectrum to make themselves a big player in mobile internet (T-mobile would make a good buy, and DT wants to sell). Unfortunately for us, the patent wars forced Google to look for a defensive portfolio, and Motorola leveraged their portfolio into forcing Google to buy them to get their patents (or else they'd all go to Microsoft/Apple; Motorola essentially held themselves hostage), so that dream is dead for now.

      It may be possible for Google to spin the remains of Motorola back off as a separate manufacturer; they certainly don't seem very enamoured with the company, seeing as they're keeping the two businesses entirely separate in terms of management and workers, and aren't really even collaborating with them when making the new version of Android. Maybe they'll just shuck off the phone maker part of Motorola Mobility and continue on their grand plan; they've certainly got the free cash to pull something crazy like that.

  • by million_monkeys (2480792) on Friday May 25, 2012 @06:53PM (#40115105)
    Maybe the smart money recognized hype when they saw it and is starting to think that hype isn't a safe investment?
    • by Sir_Sri (199544) on Friday May 25, 2012 @07:17PM (#40115415)

      Or maybe the facebook guys did a really good job of getting the maximum value for their previous investors.

      If you guess the value of a company as 110 billion dollars, and it turns out it's actually 95 that's a lot closer to reality than if you guess 20 and find out it's really 160. If you look at google, that opened at around 90 immediately jumped to 110 ish, then dropped to 100 not too long after, the next major local minimum is 243, which comes 3 years later, and it's now around 600. Feel free to pick your own preference for what counts as the 'correct' value of google stock, but pretty clearly the answer has been a hell of a lot more than 100 dollars a share for the last 7 years.

      The point of the IPO was in part to get cash so they can build and capitalize on new ideas. I have no idea what those ideas are, but then I wouldn't have anticipated amazon's cloud service (and I have a close person friend who works on it, and was working on developing it). Facebook bought themselves time, with cash, both to get regulators off their back (fairly, you can't have that many shareholders and not be public for long) and to invest in and build new revenue streams. Again, no idea what those are. Mark Cuban clearly doesn't see them either, and he's presumably more credible on the topic than I am, but that doesn't mean Zuck is without a plan to make more money.

      Of course you're right, the whole thing could be hype or stupidity. Zuckerberg might be a naive idealist who's happy to never pay a cent to shareholders and run Facebook like a charity with enough revenue to keep everyone paid and then nothing else. That would be a disaster for facebook stock in the not too distant future, but he does have a chance to make it into a proper greedy profit building enterprise, rather than just an invasive leech on your privacy.

      • by Patch86 (1465427)

        Or maybe the facebook guys did a really good job of getting the maximum value for their previous investors.

        If you guess the value of a company as 110 billion dollars, and it turns out it's actually 95 that's a lot closer to reality than if you guess 20 and find out it's really 160. If you look at google, that opened at around 90 immediately jumped to 110 ish, then dropped to 100 not too long after, the next major local minimum is 243, which comes 3 years later, and it's now around 600. Feel free to pick your own preference for what counts as the 'correct' value of google stock, but pretty clearly the answer has been a hell of a lot more than 100 dollars a share for the last 7 years.

        It's important to remember that whenever someone wins on the stock market, someone else loses. It's a zero sum game; if somebody makes money, somebody must have lost money. An IPO is essentially a competition between the company and the investors; the company wants to extract as much money out of the investors as possible for the amount of ownership they're giving up, while investors want to extract as much company ownership as they can for as little money as possible.

        Facebook appear to have had "a very suc

  • by kheldan (1460303) on Friday May 25, 2012 @06:56PM (#40115145) Journal
    Rememeber MySpace? No? Vaguely, maybe? How about AOL? AOL isn't entirely in the same category but it's close. Facebook will go the way of the dinosaur just like AOL, and MySpace, and LiveJournal, and whatever comes after Facebook will sooner than you think Not Be The New Hotness anymore. What we're seeing with Facebook today is just the opening overture of it's swan-song, and I for one will not miss it.
    • by PCM2 (4486)

      I dunno. I know it's not popular around here to like anything that smells like "social," but I find I like using Facebook far more than I ever liked using MySpace. Even if you assume they're both serving the same market with all of the exact same features (which isn't really true), one piece of software is not identical to everything else in its category. It may be that Facebook succeeds simply because it's better.

    • by geekoid (135745)

      no it won't. It's integrated far more then AOL ever was. It also adapts, something AOL, my space, etc couldn't do.

  • by blind biker (1066130) on Friday May 25, 2012 @06:57PM (#40115177) Journal

    One is the designer and developer of the most popular smartphone + tablet OS. The other has a garish social networking website.

    Now which one do you think is better positioned to take advantage of mobile Internet users?

    • by Mashiki (184564)

      The one making tangible products. FB is another dotbomb in the making, it's akin to the idiots that valued Yahoo's IPO above P&G's stock.

    • by camperdave (969942) on Friday May 25, 2012 @07:11PM (#40115343) Journal

      One is the designer and developer of the most popular smartphone + tablet OS. The other has a garish social networking website.

      Now which one do you think is better positioned to take advantage of mobile Internet users?

      All I know is that I have an Android phone, and I feel taken advantage of.

  • by pokerdad (1124121) on Friday May 25, 2012 @07:06PM (#40115275)
    Smart money knows that no company in the world should be valued at $86 billion when its profits are just $1.8 billion.
    • by geekoid (135745)

      Income Capitalization would disagree with you.
      Keep in mind, that within 2 weeks GOOG was 20% lower the opening. And the seemed to survive that.

      • by ThatsMyNick (2004126) on Friday May 25, 2012 @08:58PM (#40116389)

        Keep in mind, that within 2 weeks GOOG was 20% lower the opening. And the seemed to survive that.

        Yeah keep repeating that, and it might become accepted as truth at some point. Google opening price was $100. It never went below $100 (I think the least was 99.xx). Even more interesting was that the IPO price was $85. It never came close to the IPO price. The initial investors of Google IPO were happy from the begining. Facebook on the other hand, you know.

  • Google has the most popular mobile operating system, and has working HUD glasses, I dont see how life is going to be difficult for them.

  • by v1x (528604) on Friday May 25, 2012 @07:14PM (#40115377) Homepage
    According to this article [eweek.com], Google is estimated to bring in $4 billion in mobile Ad revenue in 2012. Even if these estimates were off by (a generous) 25%, that still sounds like a lot of money. What exactly am I missing here that led the Forbes author to predict Google's demise? I must admit I don't know much about where Facebook stands in this regard.
    • by geekoid (135745)

      That he as a trollish ass that make money from stirring things up.
      As if Google and facebook aren't mobile.

    • It's a lot of money, but it's less than 10% of what Google is currently bringing in. I happen to think that Google will find a way to prosper as the internet changes (not sure how, but I have faith in their flexibility), but a 90% revenue cut certainly would be bad news!

    • by ceoyoyo (59147)

      Maybe he's talking about the 34 billion that Google brings in from things other than mobile ad revenue.

  • Facebook is what people use their Smart Phones for! When Facebook needs a new revenue stream it can extract money from Verizon and AT&T for letting their users access it with mobile devices.
  • Wasn't it obvious? (Score:5, Insightful)

    by Hackysack (21649) on Friday May 25, 2012 @07:22PM (#40115463)

    Simple grade 3 math explained why the shares went down. It's hard to justify that kind of multiple of earnings. Their income growth rate makes it unlikely it'll ever sustain that kind of value. It's got nothing to do with generational shifts to mobile.

    Facebook is different than Google, very different. Facebook is one well developed web app, with remarkable popularity. Google is founded on the strengths of their search engine. Search is key, search is where you start. Search means you're looking for something, and susceptible to being introduced to something else that you might not have been looking for. Facebook is a tool, an application. Ads in applications diminish my experience with my application, ads in my tools make me not use said tool.

  • It's true he invested money into Real networks (anyone use RealPlayer lately? Thought not.)
    Mark is a good example of the write once-read-many kind of things.

    Sadly, everything he's ever touched has ended up on the back end of a donkey.
    Real-networks. Sorry, glad you made your buck back, nobody uses it.
    The Mavericks? Yes, they won... nothing.
    HDnet? That's like the ONLY US HD TV network never to succeed in HD.

    Mark Cuban is the Charlie Brown of kicking a good investment to the... whoops,
    Lucy just pulled it o

    • Re: (Score:2, Informative)

      by Anonymous Coward

      The Mavericks? Yes, they won... nothing.

      Mavs are the defending NBA champions, although they were bounced out of the opening round of the playoffs this year.

      They also made the finals in 2006.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      "In 1995, Cuban and fellow Indiana University alumnus Todd Wagner started [what would become] Broadcast.com. In 1999, during the dot com boom, Broadcast.com was acquired by Yahoo! for $5.9 billion in Yahoo! stock. After the sale of Broadcast.com, Cuban diversified his wealth to avoid exposure to a market crash."

      There is a reason that he is filthy rich.

      http://en.wikipedia.org/wiki/Mark_Cuban [wikipedia.org]

    • by Sique (173459)

      The Mavericks won the championship last season. This is not exactly nothing.

  • by EjectButton (618561) on Friday May 25, 2012 @07:24PM (#40115481)
    Yahoo stupidly paid a couple billion to Cuban for a worthless website at the height of the dot-com boom.

    Since then he has goofed around with sports teams and had a bunch of failed business ventures. Apparently on Slashdot this makes you a technology genius who's every blog post is front page material.
    • Since then he has goofed around with sports teams and had a bunch of failed business ventures. Apparently on Slashdot this makes you a technology genius who's every blog post is front page material.

      No, it's much simpler than that. Slashdot hasn't had a Two Minute Hate yet today, and this article is pure gold for that - it let's Slashdotters both rail at Facebook *and* worship Google in the same post. Shame the editors couldn't find some some tripe somewhere that tied in Microsoft or Apple for the trifecta

  • by Genda (560240) <mariet@nOSpAM.got.net> on Friday May 25, 2012 @07:27PM (#40115529) Journal

    Don't get me wrong, the forces that be, want desperately to make desktops go away... They can't be locked down or locked in the way mobile devices can be, and the people who use them well are unruly, demand their right and freedom, and typically don't play well with service providers walking all over them. So I understand the pundits claiming the PC is dead long live the mobile device!!!

    The problem is that there's this peculiar thing. Its called a DISPLAY, and the one on a COMPUTER is just a wee bit larger than a hamster's cage mirror, sized display that passes for a screen on smartphones. I swear there will in 50 years be an entire generation of blind people dancing to their retro ringtones from devices long abandoned for the health problems. I personally want a great big, huge frigging display. One that won't make every person over 35 squint so hard, they look like they're doing a Clint Eastwood imitation. I want to see what I'm working on without having a microfilm reader's lens welded to my eyes. I like movies and art that fill my field of vision. I like lots of windows up so I can code, and debug, and document, and browse, and email, and edit pictures all at the same friggin time.

    If the price of my great big display is that it sadly that leaves room for greedy clowns to slip advertisement into my field of view, so be it, I have to keep getting more creative to keep the stupid stuff out. This is a request for the world at large. Someone out there. Provide commercial media without commercials and people will gladly pay the premium. I would, in a heart beat!

    • by nurb432 (527695)

      Provide commercial media without commercials and people will gladly pay the premium. I would, in a heart beat!

      Like cable TV promised, then reneged on to raise profits after everyone signed up? ( if you are old enough to remember that time period )

    • If the price of my great big display is that it sadly that leaves room for greedy clowns to slip advertisement into my field of view, so be it, I have to keep getting more creative to keep the stupid stuff out. This is a request for the world at large. Someone out there. Provide commercial media without commercials and people will gladly pay the premium. I would, in a heart beat!

      The problem is that advertising has usurped the role of micropayments - visit a page and the owner gets about a tenth of a cent for each ad displayed. We need a ubiquitous system of micropayments in order to cut out the advertiser middleman on the web because everything is so decentralized that the old subscription model doesn't really fit.

      • No, we need to cut out the "who will pay me" entitlement generation's worldview. The net is free, and we put stuff on it for free so that others can check it out for free, and they will do the same. If someone can't do something without getting paid for it with micropayments they're not needed. If they want to get paid, why don't they mow their neighbour's lawn.
    • by Patch86 (1465427)

      I couldn't agree with you more. I have a smartphone with a smaller screen than most (an X10 Mini Pro), which I like as it needs to dwell in my pocket all day (plus it has a physical keyboard, which is wonderful for me). But for doing actual work, even the 15" screen on my company-issue laptop is unbearably small. The 3" screen on my phone is fine for the odd Google search and checking BBC News, even Sat Nav; but for anything more than that I'd want to slit my wrists. My 15" screen does my head in even for u

  • At least, here I can get a mobile flat data plan for 15€/month. This would make Mark Cuban's point moot.

  • then facebook came along. Where will the crowd head next ? I think that's the problem with facebook; no reason for people not to move on when something shinier and less profligate with privacy comes along in a few years.
  • A smartphone with a REALLY big screen -- http://www.wired.com/gadgetlab/2012/05/80-inch-windows-8-tablets/ [wired.com] . Steve Ballmer thought of it. They are going to release a line of clothing that will allow you to carry it, too - http://www.lockheedmartin.com/us/products/hulc.html [lockheedmartin.com] .
  • I think the entire market is a sham. The smart users block every ad, tracking cookie and other marketing tool they possibly can, and I think everyone else mentally blocks they ads that do get placed on pages. I can't recall a SINGLE WEB AD, although I periodically scan my spam box for funny phishing emails or Nigerian scams.

    Facebook is worth about $12 a share based on FUTURE potential. That is about it. But that is combined with the inherent risk of a product that could literally implode over night like MyS

  • Why would I care one whit if "Facebook and Google" are facing "dark days ahead"?

    Are "Facebook and Google" supposed to be exempt from the overall decline and fall of Western Civilization? I mean, is anyone paying attention?

    On my list of concerns about dark days ahead, Facebook and Google is some ways behind the massive die-off of bees and the Fall TV season.

Facts are stubborn, but statistics are more pliable.

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