Jay Yarow Speaks About The Shortcomings of Facebook Commerce

Cherry peddler in Bucharest, around 1869.
Image via Wikipedia

Facebook is reportedly looking for a $100 billion valuation when it IPOs. But, its current business doesn’t support that valuation. If you believe it’s going to be worth $100 billion, and eventually much more, you have to believe it’s going to make money from more than just ads.

The theory is that companies will come to depend on Facebook’s huge
user base, then Facebook will figure out how to “tax”, or make money off
those companies. Zynga,
for instance, built a huge business, and then one day Facebook said,
give us 30%. In theory, F-commerce, or Facebook Commerce was going to be
another taxable business. It isn’t.

Why is f-commerce a flop? Chris Dixon, CEO of Hunch, explains it pretty succinctly on Twitter: “Facebook is like Starbucks where everyone hangs out but no one ever buys anything.”

via Facebook Commerce Has Been A Big Flop.

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