18 Jan

Joseph Perla – Facebook is a Ponzi Scheme

People go to Facebook to interact with their friends. It is fundamentally different from the ad platform that is Google. People go to Google to find something they need, possibly ready to buy, which a good percentage of the time can in fact be solved by someone’s ad. Facebook ads, on the other hand, annoy users. They yield no real value, and thus no profits.

Eventually, though, and this might take a long time, but it is finite, everyone will have tried Facebook ads and know that they are useless. Eventually, after 10 million businesses have invested $1000 each, and Facebook has earned $10 billion in revenue in total, then they will have run out of new customers and their revenue will dry up. A useless product is never sustainable. I wish I could short Facebook.

via Joseph Perla – Facebook is a Ponzi Scheme. Never thought of Facebook that way but it makes a fair amount of sense. However, this question as to whether this idea is true depends on Facebook and every other advertising platform (especially web based) informing the public of the rate at which new advertisers drop out.