SAN FRANCISCO (KCBS) – Facebook says it has 843 million monthly active users, but getting a read on how many people actually visit Facebook’s site every day is considerably more complicated. Ultimately, some experts have said that that could mean the company is over-valued.
Facebook considers anyone who uses the site’s infrastructure or software an active user. That means if you’re reading an article online and you click on that story’s “like” button then Facebook considers you a user for that day.
“This is a company that has a substantial reach, a huge infrastructure and a lot of regular users. It’s just that when they toss around numbers like 843 million, I think that really overstates it,” said Barry Ritholtz, chief executive and director for equity research at Fusion IQ.
KCBS’ Susan Leigh Taylor Reports:
He said that you have to consider what this means in terms of monetizing their daily users. Facebook’s user base is only $4 to $5 dollars per user, per year.
“If you’re on some website and you read a story you like and click “like,” there really is no way that Facebook can advertise to you or market to you. They’re not selling you anything, so it’s really hard for them to monetize that. That’s why that number is so low compared to some other tech companies,” said Ritholtz.
All this leaves Ritholtz wondering if Facebook’s humongous IPO is really worth it.
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