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Facebook Social Search: Grasping for that Third Pillar?

On January 15th 2013, Facebook planted it’s so called “third pillar” of it’s social network empire, “social search”.

If Facebook *is* all about social media, and they already had a search function, how is this a big change?

Stack of coins with a magnifying glass on the pennies.
Okay, well that *is* some small change..

 
From what I can tell of the new search feature, it’s an exclusive index of Facebook, powered by Bing. So you get better/different results from the previous search options because it’s been handled by Microsoft’s search methodology.
 
So, you may be wondering, “Why isn’t Bing offering an improved ‘Social Search’ now that they have access to all this Facebook data?”, and you will be amused to note that today Bing indeed announced an improved ‘Social Search’ to users of their services.

In fact, Bing’s social search results are appended to the Facebook search results, and all clicks stay inside Facebook.

Still, what’s really ‘new’ about this search behavior?

Allegedly if I tack on action words to a search like, “visited by friends” or “popular with friends”, it’s supposed to marry the search results with social data from my friends list.

I gave that a whirl, trying to find various searches that would result in ‘approvals’ or ‘likes’ from my friends and I got very poor results.

Could it be that my tech savvy friends have dialed in their Facebook privacy settings to the point where Bing’s assistance is negligible? Possibly. And I wouldn’t blame them for it.

Then I tried some of the same searches in Google, without engaging any ‘social’ tags or features, and viola, I can see restaurants, pubs, and even retail stores that people in my circles have rated. I also know now to never have lunch with Dave, since he loves all the types of restaurants I try to avoid. :)

Plus, thanks to Google’s purchase of Zagat, I have a fallback option for accurate/honest feedback if my friends aren’t reviewing restaurants or pubs that I want to try out or are simply closer to my location.

While I’m not seeing a real improvement, FB is seeing a nice reversal of their stock prices, which were on a steady downfall last year, as we mentioned in our May 22nd, 2012, blog post: FB stock drops as SpaceX soars to success!

How long this will bolster their faltering stock value?

Will ‘Social Search’ mature into a feature that entices disinterested users to revisit Facebook?

Clearly that’s anyone’s guess, but at least they are trying to keep the ship afloat, and search traffic could help bolster ad revenue, as it did for Google.

Time will tell. ;)

SEO news blog post by @ 11:56 am on January 17, 2013


 

The Facebook Exodus

The Facebook IPO in May caused much speculation as to the future of the global social media giant. With a current price of the Facebook stock sitting at 20.69 today, Facebook’s future is still quite dubious.

There was also a lot of speculation that in opening up Facebook to an IPO would result in a talent drain. It seems this is one prediction that is being fulfilled. Facebook has recently lost four of its high-level managers: Ethan Beard, director of platform partnerships; Kate Mitic, platform marketing director; Jonathan Matus, mobile platform marketing manager and Ben Blumenfeld, design manager, have all resigned from the company within the span of one week.

A spokesperson for Facebook declined to comment directly as to why they left but each official spoke about their departure from the company on their Facebook pages (ohh…the irony). In these posts the former employees stated that while they had enjoyed their time at Facebook, that they were moving on to newer, more exciting challenges.

If this is the beginning of a mass exodus from Facebook, one is left to speculate how the social giant will need to react in order to meet this latest challenge in the post-IPO desert.

SEO news blog post by @ 11:28 am on August 15, 2012


 

Gaming The Facebook IPO Game

I like numbers and I like stats.  I suppose that’s what attracts me to SEO and that whole “algorithm thing” so much.  Our regular blog readers will remember my rant on May 18th on the Facebook IPO over-valuation where I compare Facebook’s stock prices vs revenue with Ford, valuing Ford at well over $2 trillion dollar if they got the same kind of multiples as Facebook does.  Unfortunately Ford has to exist in the real world where they’re expected to base their company worth on revenue.  What a novel concept.  But that rants done so on to a fun game …

As I’m sure you can all imagine I’ve been watching Facebook’s share prices regularly (dare I say … hourly).  I definitely feel sorry for investors but there is part of me that feels a bit better about the state of the economy knowing that Facebook’s stock is dropping to perhaps what it should be.  It’s still got a ways to go there though.  That said, watching the stock has revealed some interesting insight that I might even jump on if I had a risk-tolerance high enough to view my capital as Monopoly money.  Because I don’t really understand the stock market and just like playing with numbers however I’m not about to do that, but thought I’d share an interesting bit of data.

Facebook stock is following (generally) a trend, or at least has been for the past week.  Let’s say you like to day trade and you have $10,000 to play with.  If you buy each day at 2PM and sell each day at 3PM it would result in (note: I’m assuming a $0 transaction fee as those vary):

May 31st (start of day – $10,000)
At 2PM you’d buy 370 shares at $27.02 costing $9,997.40
At 3PM you’d sell for $28.20 for $10,434.00

June 1 (start of day – $10,436.70)
At 2PM you’d buy 376 shares at $27.75 costing $10,434.00
At 3PM you’d sell for $27.84 for $10,467.84

June 4 (start of day – $10,863.75)
At 2PM you’d buy 407 shares at $26.67 costing $10,854.69
At 3PM you’d sell for $27.22 for $11,078.54

June 5 (start of day – $11,087.60)
At 2PM you’d buy 419 shares at $26.41 costing $11,065.79
At 3PM you’d sell for $26.17 for $10,965.23

June 6 (start of day – $10,987.04)
At 2PM you’d buy 420 shares at $26.11 costing $10,966.20
At 3PM you’d sell for $26.79 for $11,251.80

 

At the end of the week your investment of $10,000 would have you sitting at $11,272.64.  Not bad – over 11% return in a week.

I noticed this while having a chat with a friend of mine (my WebmasterRadio.fm co-host Jim Hedger) when Facebook had dropped further at around 11am one day and I said it’s a good time to buy as it’ll go up by the end of the day.  I decided to actually look at the trends as my thought was based just on an instinct at what I’d seen without paying attention.  Turns out I’d have been wrong that day and I was muddling my data from casual glances but if you actually look at the flow of value, there is one.  Some days you’ll come out behind but overall – you’ll come out over 11% richer.  had you bought at the lowest and sold at the highest points in a day of course you’d have made more but saying that is like saying drinking water will keep you hydrated.

I have to note this is just a fun analysis and not meant to be taken as any kind of advice.  I’m not buying shares nor do I plan to.  I expect the stock price to fall overall in the coming months and either way, I’m not a stock investor.  I say this so you won’t take this as any type of advice or think, “hey, I’m going to do that”.  Doing so would be akin to taking the advice of an SEO on how to win the Tour de France, I’m sure I could come up with statistical tips for you there to but a knowledgeable trainer is always better so if you’re thinking of investing in Facebook, get the advice of a qualified professional.  If you ask me – as a long term investment it’ll only be good for a loss in your books.

Follow Up:

To see if things progress along the same path, I’ve decided to track that $10,000 through the week after this post.  Each day I will be updating this post with the 2PM buy and 3:00 sell metrics.

June 7 (start of day – $11,272.64)
You’d buy 421 shares at $26.72 costing $11,249.12
At 3PM you’d sell for $27.07 for $11,396.47

June 8 (start of day – $11,419.99)
You’d buy 422 shares at $27.05 costing $11,415.10
At 3PM you’d sell for $27.02 for $11,402.44
* interesting note – last Friday it picked up around 3:15 too but I don’t want to change my numbers for Friday’s so we’ll stick with the 2PM to 3PM strategy as the numbers below continue.

June 11 (start of day – $11,407.33)
You’d buy 411 shares at $27.70 costing $11,384.70
At 3PM you’d sell for $27.30 for $11,220.30

Interesting to note – it appears that the first day of the week Facebook spikes first thing in the morning and then drops through the day.  If I continue monitoring this one after this week is up I may well adjust the numbers to just a buy at 3PM with a sale at 9:30 the following day.  Not quite as slick at the 2PM to 3Pm standard but we’ll see how that works through this week.  :)

June 12 (start of day – $11,242.93)
You’d buy 415 shares at $27.05 costing $11,225.75
At 3PM you’d sell for $27.21 for $11,292.15

June 13 (start of day – $11,309.33)
You’d buy 411 shares at $27.45 costing $11,281.95
At 3PM you’d sell for $27.16 for $11,162.76

So – if you followed my ill-conceived advice you’d have made $1,272.64 in week one.  In week two you’d have lost $109.88.

For the next 5 business days we’re going to go with the same 2 to 3 buy/sell pattern but I’m going to take the leap and say, “It happened twice so it’s a pattern” and on Monday I’ll be tracking the buy at 3PM instead of two and hold on until Tuesday at 9:30.  I’ll then track the buy again on Tuesday at 2 for a sale at 3.

It’s interesting to note that after 2 weeks we’d have a 11.16% gain in revenue.  Had we simple purchased once at 2PM on May 31st (the first day in this example) and sold at 3PM on June 13th you’d have gained 0.05%.

So stay tuned for more bad advice. :)

Week Three:

Because I started monitoring this on the 31st of May (a Thursday) this is the first day of week three.  This week I’m sticking to the 2PM buy and 3PM sell rate I’ve been using thus far with one minor adjustment, on the first day of the week I’ll be buying at 3PM and won’t sell until 9:30AM the next day.  So on the second day of the week there will actually be two sales.

June 14 (start of day – $11,190.33)
You’d buy 403 shares at $27.73 costing $11,175.19
At 3PM you’d sell for $27.71 for $11,167.13

June 15 (start of day – $11,182.27)
You’d buy 386 shares at $28.90 costing $11,155.40
At 3PM you’d sell for $29.21 for $11,275.06

June 18 (start of day – $11,301.93)
You’d buy 357 shares at $31.65 costing $11,299.05
On the 19th at 9:30am you’d sell for $31.53 for $11,256.21.

June 19 (start of buying – $11,259.09)
You’d buy 353 shares at $31.89 costing $11,257.17
At 3PM you’d sell for $31.76 for $11,211.28

I’m going to stop now as here’s what’s clear … you shouldn’t follow my advice on investing.  My insistence on watching trends and keeping a toe-hold in reality makes me ill equipped to be an investor.

Had you invested $11,272.64 on June 7th at 2PM you’d have purchased 421 shares at $26.72.  If you followed my advice that would have turned into $11,213.20 losing you $59.44.  If you just sold at 3PM today you’d have turned that $11,272.64 into $13,370.96.  So in essence, if you’d followed my advice you’d have lost $2,157.76.

And that’s why it’s a better idea to leave things to the experts. :)

SEO news blog post by @ 7:10 am on June 7, 2012

Categories:Facebook,IPO

 

Facebook Losing $2,373,373.37 Per Minute



Today’s post will be a short one, a followup on my rant on May 18th in which I discussed a value comparison of Facebook’s IP vs Ford discussing their Market Cap (total company valuation) based on their real-world earnings.  For our regular blog readers or listeners to my weekly show on Webcology on WebmasterRadio.fm you’ll know that I’m flabbergasted and a bit disgusted by the valuations being flung around for internet companies.  Don’t get me wrong, I think the Internet is an awesome place but to value a company like Facebook at 21.4 times annual revenue is just … not right.  Turns out … investors and I daresay the rest of the world agrees.

So today my good friend Rob Gagnon of Xoomfile asked me via Skype, “So how much per minute is Facebook losing right now?”  That of course got my curiosity up and after a titch of quick math (total loss in Market valuation divided by the number of hours since the IPO went live (333 to the time of this writing) I came up with $2,373,373.37 per hour in lost valuation.  That’s $39,556.22 every second or over $47 billion since May 18th when the IPO began.

While I can sympathize with the losses investors are taking, if we take a step back and look at how we’re valuing companies … this outsider is pretty confident we’ll continue to see additional drops in Facebook and likely other tech companies with valuations this far outside of any reasonable revenue vs valuation multiplier.  Basically, we need toa sk ourselves … what would this company be worth if we didn’t view capital as Monopoly money and instead looked at the numbers as opposed of the hype.

SEO news blog post by @ 8:41 am on June 1, 2012

Categories:Facebook,IPO

 

Facebook going to the Opera?

Fat Lady singing Opera logo

With all that IPO cash in hand Facebook could really have a night on the town, perhaps even watch the fat lady sing?

Given the bad press over their profit reports and legal actions from investors, I’d be tempted to do anything that’s a change of topic from ‘stock prices’.

Why buy Opera?

That’s actually not too hard to answer as a nerd or as an investor.

Shut Up and Take My Money
Opera is real technology and has actual value. Something FB needs to be snatching up.

 
The main reason: Opera has always provided some of the best mobile browser software. My first experience with Opera Mobile (5.1?) was back in 2006 on an HTC Apache (X6700).

I remember installing Opera on my Windows Mobile phone and back then the 1x connection speeds were barely better than dial-up and data prices were just unthinkably bad. Opera Mobile not only pre-compressed the data for me, it would compress data my phone couldn’t render, like simple Flash video/animations and even let me painfully navigate Flash based menus.

That’s right, I was able to interact with Flash based content on a mobile phone before the iPhone was a twinkle in Apple’s.. erm.. eye. That’s how long Opera’s been providing must-have solutions to the mobile market.

Opera is more than just a very popular/powerful mobile browser with unique features… Opera is one of the most complete browsers available on the PC today.

SEO TIP:The turbo feature acts as a proxy to avoid identity issues on most sites.

Unless you are on a secure site or a site that you’ve configured specifically to pass your identity, Opera’s Turbo mode will send requests to Opera’s proxy server instead of the website you are on. The responses come back to Opera, get heavily compressed, and then it’s sent back to you. This means that Opera’s proxy IP is making the requests, not your computer’s IP. Handy dandy!

The IRC client is great and requires almost zero setup/knowledge to jump into discussions with really nerdy (and often brilliant) people.

I used to be a die hard user of mIRC, I even used it to author some scripts to create the first DOS network (SuperKill) myself and my nerdy friends from around the world had ever heard of. Today I happily use Opera’s IRC client because it’s zero hassle and it’s built into a product I already use.

Opera's HTML5 Date Picker
Opera’s HTML5 Date Picker

Opera also has some of the most complete HTML5 implementations of any desktop browser.

It makes sense that if you have to to know how to render/handle HTML5 tags for mobile use, it’s not hard to extend that support to your desktop users.

An input element with a type value of ‘date’ should illicit a date selection box, but of all the major browsers on the market, Opera is the only one that recognizes and supports these elements by default.

Opera’s other features are just as thorough and well developed as it’s core functions. Opera’s application page allows you to turn your Opera browser into a media player/streaming host, file sharing hub, webcam server, private photo shares, web proxy, messenger, etc..

If Opera had been made in Sweden vs. Norway we’d have to dub it the ‘swiss army knife’ of browsers, but for now we’ll have to look at it as the ‘concert of awesome’ for those times when you want one program to do everything.

Why NOT buy Opera?

Price. Plain and simple.

Google is a major partner in Opera, and is the default search engine for the Opera browser. If there’s a bidding war to purchase Opera, Google’s not going to let FB buy it cheap, nor will the other competitors in this arena of mobile/social web dominance.

Right now top financial teams from banks like Norway’s DNB have speculatively estimated Opera at a value of between $1 billion – $1.35 billion.

This is a value based on Opera share prices, and the stock was on a 17.2% rise this morning and hasn’t stopped climbing, with Google finance putting it up at 30.23% currently!

In fact, if you want my personal opinion, at this stage of the game, with FB’s intentions very clear, I’d say the whole deal will hinge on price alone since it’s a sound decision to buy, but only if the value holds.

I’d say you could take that to the bank, but I’m neither rich nor financially skilled, I’m just a nerd that’s been around for a long time. ;)

SEO news blog post by @ 11:54 am on May 29, 2012


 

FB stock drops as SpaceX soars to success!

There were so many interesting technology/internet developments between Friday and now today that I can’t really pick which one to focus on?

Sliding FB stock prices, Google finally taking over what was the mobility division of Motorola, SpaceX reaching the ISS, Wiki-leaks’ social media platform, and the Google Knowledge Graph.. and more!

If we looked at them from an SEO standpoint I would still have to struggle a bit to pick the most interesting/focused story, but it’s a great way to dive in so lets take a look at the weekends headlines from an SEO aspect.

Facepalm – FB IPO = Uh Oh

 
Dave’s nailed this one really well on Friday in this post:
Facebook IPO vs Ford (real world) Valuation Comparison

The image of money flushing down the toilet was very ‘apt’ since that’s exactly where I see the stock price going:
https://www.google.ca/finance?q=NASDAQ%3AFB

The current ‘low’ appears to be $31/share at the moment, with the price currently dancing around $32.50/share as I write this.

Google Mobility

Google already makes some cool hardware for their servers and other projects, but most people I know wouldn’t think of them as a manufacturer.

And yet here we are today, watching history unfold, as the mobile division of one of the worlds best handset manufacturers changes hands with a company that is at the head of the Android software alliance.

Google does a lot of things for free, even at a loss, because they see value in things that others would squander and ignore. Now that they have a hardware division to support this bad habit things are going to get very interesting.

We already know from looking through project glass’s details that Google will be needing a very skilled manufacturer with assets in micro mobility and wireless. HTC has always been very willing to participate with Google’s projects, but they are a vastly successful hardware manufacturer with no visible brand loyalty.

I personally had Android running on a HTC Windows Mobile so why can’t I run Windows Mobile on a Google subsidized Android HTC phone? I probably could, which is why it’d be very silly for Google to subsidize HTC hardware.

If Google can produce the hardware and find ways to keep 90%+ of the owners using Google services, it’s a much safer bet, and it appears to be exactly what they are doing. Heck if they make the hardware they might not even care what OS you use if they are allowed to sniff the data and still learn about users from the data they are using.

The only part of the puzzle that’s missing is deployment of Google owned, Motorola equipped, cell-towers so that Google can offer hardware, software, and services on their terms, in a model that makes sense to them, which would likely mean no caps on network use for Google products?

Yeah I could be dreaming but if I was a competitive cellular provider I’d be strongly considering opening my arms to Google before it’s an arms race against Google. ;)

Google Knowledge Graph

While the bearing on SEO for this news item is rather debatable and curious. The feature itself is incredibly handy and something Google has the unique opportunity to provide.

By taking key points of knowledge and building some hard links to relate that knowledge to other data points Google has developed a Wikipedia of it’s own design.

Knowing the struggles that Wikipedia has faced in terms of moderation and updating content, it will be anyone’s guess how Google is going to maintain it’s knowledge graph without someone manipulating the results, but kudos to Google for trying?

Right now the coverage on this is going to be all the same because the content in Google KG is still being built up, but you can expect further discussion as the service grows.

FoWL – Wiki-Leaks’ Social Media Service

Since this service claims to be private and encrypted, it would be very foul of me to really spend much of your time discussing it.

As it can’t be officially crawled by Google it’s probably going to have a very low effect on SEO and rankings in general. The only real bearing I could see it having is using it as a traffic tool for sites that are in-line with the Wiki-leaks mantra of public information. So if you can pretend that your services are so good the FBI doesn’t want you talking about them..??

SpaceX reaches ISS

This isn’t search engine related at all. I suppose you could point to the success of Google vs. government run indexes, and then point to the success of SpaceX vs. NASA with a bunch of startling similarities, but that’s some serious reaching.

At the same time, posting this on the same day the first private effort has docked with the International Space Station? I am obligated as a nerd to at least tuck this into the tail of the post. It’s pretty cool!

9 Days Left!

 
9 DAYS LEFT!

 

We still have 9 days left in our Beanstalk Minecraft Map Competition! Check it out and even if you’re not entering, please let others know it’s coming to a close and we need all submissions by the 31st!

Good Luck! :)

SEO news blog post by @ 12:01 pm on May 22, 2012


 

Facebook IPO vs Ford (real world) Valuation Comparison

Facebook IPO

About 10 minutes ago (as I start writing this blog post at least) investors were able to buy into Facebook.  At opening the price was estimated at $38/share which gives Facebook an overall value of $107 billion.  Wait … let me say that again.  That’s one hundred and seven BILLION dollars (insert into your brains if you will an image of Dr. Evil laughing).

So, what’s obvious is that money in the real world has no connection to money in the tech realm.  Here’s just a few statistics about Facebook:

Q1 revenue – $1.058 billion
Q1 net earnings – $205 million
Members – 835,525,280

So let’s think about this for just a second.  This means that each member is worth $128.06 if things go Facebook’s way and the value at the end of the day reaches $107 billion.  Now if we look at what they earned from their members in Q1 (and I’m talking about profit here, not revenue) they earned $0.25 off each one in the quarter.  Essentially this means that at the current rate they’ll make roughly $1 off each user per year so simple math tells us that the company is being valued at 128 years of profit.  That’s right … 128 years.

Now let’s take a different approach in valuation and look at it from revenue instead of profit.  You shouldn’t … but lets.  If Facebook’s Q1 earnings hold through the rest of the year that would give them an annual revenue of $4.232 billion but let’s be nice, let’s say that over Q3 and 4 their revenue spikes for the holidays and they earn a cool $5 billion; they’re still being valued at 21.4 years of revenue.  Not profit … revenue.

The Real World

So let’s put this in real world terms.  Let’s look at the valuation of a brick-and-mortar company, a little company called Ford.  Here’s their statistics:

Q1 revenue – $30.5 billion
Q1 net earnings – $1.4 billion
Members – NA

So, with the math noted above on Facebook’s evaluation Ford is worth 2.6108 trillion dollars (note: this is higher than the total US deficit for 2011).

So what is Ford worth?  $38.34 billion.  You heard me … the value of a company that shows over a billion dollars in real-world profit each quarter and generates $30.5 billion in revenue in a single quarter is valued at 1.257 times quarterly revenue or 27.39 times quarterly net earnings.

Let’s Do Some Math

As an SEO I love math so I won’t make you do it.  Let’s look at what Facebook should be valued at if the tech world was ruled by the same general laws of reality that the real world is.

If we base Facebook’s valuation on their Q1 revenue and subscribed to the notion that a company should be valued by some reasonable measure of what they earn (it’s crazy I know) and used Ford as the benchmark they would be valued at $1.33 billion dollars (that’s about $0.48 per share).  If we go the route of valuing them based on net earnings and use Ford again, they would be valued at $5.615 billion, a healthier $2.05 per share.

But Investors Are Apparently Detached …

from reality.  During just the time of my writing this blog post (about 30 minutes) share prices have gone from $38.00 (a low after opening at $45) back up to $41.16 valuing the company at $112.73 billion dollars.

Can anyone else see the pin coming that’s going to pop this bubble?

</rant>

Update: 3 Hours Later …

Poor Facebook, back down at $38.01.  personally I think it’s not dropping below $38 simply because there’s noone who’ll sell for less right now.  Don’t worry, if you want to grab a deal on FB stocks just wait … they will go down once people get beaten down.

Other social media properties have been tanking throughout the day.  Some speculate that’s due to investors pulling their money out to buy Facebook shares.  Zynga (game maker, you’re probably familiar with many of their products … I for one am addicted to Words With Friends) dropped 16.2% as of the time of this writing.  But let’s take a look at their financials:

Q1 revenue – $321 million
Q1 net earnings – $47 million
Members – NA

Their company value is currently $1.425 billion.  If we assume Q1 revenue will continue (which is unlikely – Zynga is likely to increase in revenue in Q3 and Q4) their annual revenue would be $1.284 billion.  So what I’m seeing is investors valuing Facebook at over 21 times yearly revenue and bailing on Zynga to the point where the stock was frozen earlier today based on a multiplier of a virtually 1 to 1 annual revenue vs company valuation.  I think I’ll just go scratch my head and wonder at the state of the economy for a while.  While I’m doing that you can wonder at why companies like Zynga and LinkedIn are tanking.  Groupon is too (down 6.57% as of this writing) but that just makes sense to me as I viewed it as over-valued and then there’s that issue of unusually heavy trading just hours before a favorable earnings announcement (just a titch suspicious – you can read more on that on the Wall street Journal at http://online.wsj.com/article/SB10001424052702303879604577410503063634984.html).  Not so favorable (in my opinion) as to warrant their market value of over $7 billion ($559.3 million in Q1).

Note: I may find it overvalued however I do think their pricing is far more realistic than … say … Facebook.  But then, they actually provide a real-world deliverable so they can’t be worth as much right?

 

SEO news blog post by @ 9:48 am on May 18, 2012

Categories:Facebook,IPO

 

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