Tags: Times | Facebook | Visitation | Numbers

NY Times: Facebook Pumping Up Visitation Numbers

Wednesday, 08 February 2012 08:08 AM

Facebook is going public but is the company claiming its subscribers are viewing the famed social network site more than they really are? It looks that way.

In its initial public offering prospectus, Facebook claims to have 854 million "active" users, which are those that go to the site.

However, even a person not clicking onto Facebook.com is considered to be an active user if he or she "took an action to share content or activity with his or her Facebook friends or connections via a third-party Web site that is integrated with Facebook," the New York Times reports.

In other words, every time you press the "Like" button on NFL.com, for example, you’re an "active user" of Facebook.

"Think of what this means in terms of monetizing their 'daily users,'" Barry Ritholtz, the chief executive and director for equity research for Fusion IQ, writes in his blog, according to the New York Times.

"If they click a 'like' button but do not go to Facebook that day, they cannot be marketed to, they do not see any advertising, they cannot be sold any goods or services. All they did was take advantage of FB’s extensive infrastructure to tell their FB friends (who may or may not see what they did) that they liked something online. Period."

Facebook plans to raise $5 billion in capital through an initial public offering that values the company between $75 billion and $100 billion, dwarfing big-time Internet IPOs in the past like Google.

The company needs to convince investors people are flocking to its site.

"The $100 billion valuation that’s being tossed around just puts it at a level we’ve never seen," says Jeffrey Sica, chief investment officer of Morristown, New Jersey-based Sica Wealth Management, according to Bloomberg.

"They have to be able to show that not only do they deserve to be at that level, but they have multiple channels to create new revenue."

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Wednesday, 08 February 2012 08:08 AM
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