hyperkik - 10:16 pm on Jan 8, 2011 (gmt 0)

Facebook are in a position to totally reinvent search, leveraging their user data. Not just results based on friends' listed interests but based on friends' (and extended networks') clickstreams. i.e. Google personalised x1000. They could accurately personalise results for stuff you've never searched for before and didn't know you wanted. Then add an ad program.

The thing is, that only work when they have enough information about a user to create a meaningful data set. I'll grant that, combined with other factors, data may allow for improving ads served to its members, but let's just say they do a terrible job with their on-profile ads for me. (Have you ever clicked one?) It's difficult for me to imagine that they have something up their sleeve that will beat contextual advertising, as if the product is what they're using now it's not even effective for low-use (i.e., most) subscribers.

I recognize that over the years many companies have enjoyed high valuations based upon vaporware, and that many people can afford gambling on Facebook being the exception, but we know how most of those stories end.

Charging for commercial fan pages won't generate the type of revenue Facebook needs to justify the GS valuation or anything close (assuming we should even regard the GS $50 billion as an attempt at an accurate valuation).