What the Goldman Sachs Facebook investment really means

Posted on January 4, 2011 by Ian Betteridge

Alan Patrick sees through the hype around Facebook being “worth $50 billion”:

“The one sure thing you can tell from this is that Facebook clearly can’t self fund itself enough for what it needs, even on $2bn turnover a year.”

To put it another way: A web site which has 500 million users, 1/8th of the entire population of the Internet, doesn’t have a business model capable of supporting itself.

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  • Anonymous

    Don’t look behind the curtain… Isn’t this the same crap we had from Goldman Sachs and Fannie Mae?

  • http://www.technovia.co.uk Ian Betteridge

    As someone points out on Alan’s post, Goldman’s strategy is just that there will be a sucker along who wants to buy off them for more than they’ve paid…

  • Anonymous

    Not just that they’ll buy off them for more than they’ve paid – also that they’ll rake in the management fees off the SPV they’re creating.

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