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Facebook is a Ponzi Scheme

Facebook is a Ponzi Scheme


This is an interesting article. I haven't seen good response from my Facebook adverts, but I haven't done a lot of them, nor am I able to get the statistics I need to decide if it was really successfull.

Facebook publishes how many advertisers they have, but it is an ever-increasing number. A better metric would be the "7-day active" statistic. That is, the people that have advertised, and continue to do so. Other companies (the big G, for example) puts a bigger importance on 7-day active, 30-day active, etc. because those are real useful numbers.

Any time you see a startup not publishing their 7-day active stats, either they are hiding something or they are truly ignorant of what they should be really measuring.

Of course, I'm biased. Never listen to criticism of a company by someone that works for the competition. :-)

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Are you kidding me? I can't think of more useful quarters for criticism than from a competitor.

From what I gather, the "logic" that Facebook is a Ponzi scheme is:

1) they post huge revenues
2) their revenue model isn't sustainable because it doesn't work (based on the author's 1st-hand experience and lots of 2nd-hand experiences the author got from others, but no actual hard numbers other than feelings).
3) "Facebook promises big returns on ad spending, but delivers nothing."

So...any fashion fad is also a Ponzi scheme? And Fashion Week is a haven for the Ponzi schemes this year?

Oh, and #3 is any scam, not just a Ponzi scheme, and I doubt that Facebook actually "promises" big returns, because then they'd have lawsuits up the wazoo. Very likely they just post data that says what they want it to say, because that's what most companies do to make money.

Also, the author says "Now, it is possible that some extremely niche businesses have found limited utility from ads (say, BustedTees and social games may be the only ones)."

But....that's the most appropriate ads for Facebook, the ones that anyone would guess would get the most click-through, because most people come to facebook to connect and play social games with people......

So basically the author is saying "eventually Facebook will stop getting HUGE revenues and will have to change their pricing model.....don't be fooled by averages." Except he got fooled by the averages, so now he's bitter.

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