Facebook's Big Announcement Doesn't Justify A $30 Price

SEEKING ALPHA - Jan 17 - Since dropping below $20, Facebook stock has rallied and is currently trading ~ $30 per share. Facebook launched a new product on January 15th: the "Social Graph" which, will allow users to find people and things that they might be interested in based on their own social network and those of their friends. The user-focused company never answered how this service will benefit shareholders, but the tech media had a few ideas.

• It's a social marketing tool that lets users discover and use the same businesses and products as their friends- like Yelp  or Angie's List, only social. As a result it's easy to see Facebook creating value from this use of Social Graph.
• It's a recruiting tool, competitive with Linkedin Corporation. LinkedIn is barely profitable and while revenue growth has been very high we suspect that it might be overvalued as well.
• It's a free dating site. It's extremely difficult to imagine such a business being worth half that figure even under the Facebook banner.

by Matt Doiron
See full article at Seeking Alpha

This post also appears on SocialNetworkingWatch.