patrick.net

Definitely possible. The Chinese government just needs to come up with a reason to boot facebook off of the country's internets and BLAMMO! RenRen takes center stage.

If it keeps blowing up like this I'd consider shorting.

And on a related note, what gives with all of this social network crap masquerading as ACTUAL tech innovation? They are just sophisticated advertising/marketing companies...

How are the chinese at putting up a lot of personal information online? I'm really not familiar with how they view privacy and/or their own government. If they put up a compromising picture, do they fear retribution? the police? Or is the country so large, that they don't fear the government? I always get the impression that they have to watch what they do. That will really effect how large renren grows I guess.

Also advertising on facebook is making money, but they're charging CPM (or in other words "branding" advertising), while every else charges for CPA or an action needs to be taken. They started off with CPA but the click through rates were so terrible they switched to a CPM model where they simply display an ad and they get paid. If an advertiser gets a click, then awesome, but they shouldn't expect a click. I'm really not sure how well they're going to do in the long term.

The one big benefit to renren, is that advertising in other countries seems to have far higher click through rates (people seem to click on ads in other countries at a much higher rate than in the US/Europe markets).

pkennedy says

How are the chinese at putting up a lot of personal information online? I’m really not familiar with how they view privacy and/or their own government. If they put up a compromising picture, do they fear retribution? the police? Or is the country so large, that they don’t fear the government? I always get the impression that they have to watch what they do. That will really effect how large renren grows I guess.

Good questions, but consider that the Chinese government can probably harvest personal info on any subject at any time with little effort (without the aid of social networking software) - and that the Chinese people are aware of this. Also consider what kind of stupid crap people pile into the social networking sites here, anyhow. Hardly worth monitoring.

It's far harder to shoot yourself in the foot here, unless you're talking about harming others. In the US, free speech is huge and people taunt the government to see how far they can take it. Many other countries prefer to live under the radar, owning cheap cars, not flaunting their money, etc. Creating a social network is just a great way of giving out way too much information.

terriDeaner says

If it keeps blowing up like this I’d consider shorting.
And on a related note, what gives with all of this social network crap masquerading as ACTUAL tech innovation? They are just sophisticated advertising/marketing companies…

This does remind me a lot of the .com bubble too. There isn't that much value to any of those companies, Facebook and LinkedIn does not really do anything all that impressive. I really believe it will crash eventually, I just don't know when.

Linked in has the most potential, it has a huge number of highly paid professionals in there, with a large number using it for jobs, both hiring and being hired. There is a lot of money in that market/business.

Facebook simply has volume that doesn't appear to be slowing down. It just doesn't have much useful volume for anyone. People know what they want and aren't easily distracted by pay services and/or advertising.

Twitter is the only one that could easily go down the tubes. Far less volume, far fewer people using it with far fewer interconnects between people. A couple bad incidents, like well publicised people saying "We're dumping you, this is lame" and a trend could take off.

pkennedy says

Linked in has the most potential, it has a huge number of highly paid professionals in there, with a large number using it for jobs, both hiring and being hired. There is a lot of money in that market/business.

What is so great about LinkedIn? it's basically a very lite version of facebook, very light.

ChrisLA saysWhat is so great about LinkedIn? it’s basically a very lite version of facebook, very light.

The money in LinkedIn is not in the users who rarely log into LinkedIn. Sure they set their career status/history and post their resumes and forget about it. Sure they'd occasionally log in to add colleagues they knew.

But the money comes in from HR. HR personnel uses LinkedIn to recruit people. Companies are willing to pay around $3k for each new hire and up to $30k for higher-level people.

The LinkedIn business is low volume but high margin, whereas Facebook is low margin but super-high volume. It is also stable because it is not likely that a new website will spring up and quickly take their place.

Interesting bit on bloomberg today about LinkedIn:

LinkedIn May Fall to $30 When Insiders Sell: Gamco
http://www.bloomberg.com/news/2011-05-23/linkedin-may-plunge-to-30-a-share-once-insiders-able-to-sell-gamco-says.html

LinkedIn fell 5.2 percent to $88.30 at 4 p.m. in New York today[May 23]. The Standard & Poor’s 500 Index lost 1.2 percent, the most since March 16.

Still a good shorting opportunity?

The company sold 7.84 million shares at $45 apiece on May 18, and the stock surged as high as $122.70 the next day. Insiders and money managers have 85.7 million Class B shares of LinkedIn, based in Mountain View, California, that cannot be sold until 180 days after the IPO, regulatory filings show.

“The supply is going to increase,” [...]

The company’s ability to convert revenue to cash will be curbed by wage increases, Haverty said. LinkedIn is probably able to convert about 40 percent of its sales into cash flow, he said. Based on this valuation, the stock is worth about $30 to $35, he added.

I saw that piece, I don't see any puts being written for LNKD though. Is that normal?