Facebook’s IPO is our big topic this week on the GeekWire radio show and podcast. We assess the company’s debut on the NASDAQ and discuss its future outlook with Nat Burgess of Corum Group, a mergers-and-acquisitions specialist who is skeptical about Facebook’s long-term prospects.

Nat Burgess in the KIRO-FM studios. (Erynn Rose photo)

“A lot of people are making the mistake of thinking that Facebook is like Google,” he says. “And, guess what? They’re not. They don’t know how to monetize their traffic, really. Right now they’re generating revenue, but it’s not sustainable long-term.”

Listen above starting at 12:20 for more thoughts from Burgess on that topic.

You may remember Burgess as the person who correctly foreshadowed Microsoft’s partnership with Barnes & Noble long before it happened. We quiz him about that and other topics, including his thoughts on Jeff Bezos and Amazon.com.

That conversation is preceded by our weekly news roundup — in which we discuss Coinstar’s newest kiosk innovations, a new survey about the state of geekdom, the new Windows 8 feature that will give parents a weekly report card on their kids’ computer use, and the debut of the tech-friendly BoltBus providing transportation between Portland and Seattle.

Our App of the Week, StillShot, is a must-have for parents with wiggly kids.

And we’re back with a new installment of our Name that Tech Tune challenge.

Listen to the show above or directly via this MP3 file. 

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  • http://lianza.org/ Tom Lianza

    This point of view makes sense to me (the monetization issue).  Just saw a tweet that summarized it with a funny analogy:

    “We have 11M daily active users, we simply need to monetize them” — Greece

  • Tom from Bothell

    Facebook has done nothing but execute well for eight years, leaving their rivals in the dust. They are making more money today than Google did when they went public. Now Facebook has over sixteen billion dollars in the bank. Even if they stop executing well (highly unlikely) they could coast for years. Why? Low operating costs  in form of a few thousand employees, and what appears to be the world’s most efficient infrastructure. But they won’t stop executing well. They have terrified their largest competitor in the Internet advertising space, Google, into making blunders. Finally, our US-centric myopia neglects that the vast majority of Facebook’s users are not in the USA. They are a truly global company operating in the global marketplace. 

    They are not likely to fail.

    • http://lianza.org/ Tom Lianza

      These are some great points, though I disagree on the myopia issue – Facebook’s oft-cited user count obviously exceeds the population of the US by several multiples.    

      I think the question isn’t whether or not they will fail, but whether or not the stock is going to do well relative to Wall Street’s quarterly expectations (ie. measuring the IPO here, not the company).  

      As you say, they’ve executed exceptionally well for years.  That begs the question, is this the best they can do, profit-wise?  Have they been holding back on revenue by focusing on growth, but now we’re going to see them change their focus?  If they do shift focus toward revenue, will it affect growth by hurting the experience?  There are a bunch of real, interesting questions there. 

  • Guest

    “They don’t know how to monetize their traffic, really. Right now they’re generating revenue, but it’s not sustainable long-term.”

    Is that really fair? Given that they’re profitable, apparently they know how to monetize traffic better than about 99.9% of their 5K+ ad-funded counterparts. Maybe they can’t yet monetize as well as the king of monetizers Google. But at least they’re not losing millions like most, or even billions like some (Bing). Also, they seem to realize this is an area that needs more attention and are trying to address it quickly (unlike Bing, which has spent years trying to improve its seriously deficient RPS and still hasn’t succeeded):


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