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Ty J. Young Wealth Management CEO Ty Young on why Facebook’s revenue outlook is a concern for investors.
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Investors -- young says.
You good bet that that is what's happening here and worse yet this is a bubble already in slow motion implosion here.
-- obviously not a fantasy explode but more -- -- not a fan of of the way investors are behaving here right.
You know really not Neal thanks for having me back you start to look like 99 did not 1999 to be it looks like.
On the dotcom bubble -- point oh setting up because what we have is.
Astronomically high PE ratios and no one seems they care people are buying stocks because they have a website now certainly FaceBook.
They have social networking -- 900 million people all on there and there's value to social networking but.
What are they really do what they produce the -- sell advertising and -- click through advertising which is proving to be a bit disappointing and that's why as you pointed out.
I'm GM is pulling out so back in 1999 we had irrational exuberance according to Alan Greenspan and it looks that say way to me right now.
You know I was reviewing for getting ready for Smart guys are -- that's and I have to dip but I was reviewing.
The initial response and the naysayers.
Two to Google.
And NC eBay and Amazon.com.
And while the stories are -- a little bit in the valuations in the when he -- to make money doing very little bit.
Com.
It was similar.
-- those guys are -- they were one of the and among the few survivors of the Internet bubble.
Could this -- Oh I think I think certainly that the FaceBook survive much Mark Zuckerberg is a household name FaceBook -- a household name and made a movie about them.
900 million people are on our FaceBook but the real question is.
Is social networking a sustainable model to generate revenue and to build a portfolio around -- at this point as I look at and I'm not so sure.
You don't know the rule of thumb drives or do is tell me is can you make money.
-- and leverage off that brand in their cases you said.
You know almost a billion users.
That's a great deal -- -- leverage -- event and there are a lot of companies that not only do business on their side and brought bibles to decide.
This did the trouble is when they advertise.
And you have a choice as the user to point and click conceive what that heads about on outside GM said not too many were doing that -- -- that I could be reported GM.
And people they GM.
Does Ford is sticking to -- but you do hear a lot of those kind of stories and I'm wondering if whether that's why.
Couple would would report Citi insiders could sell out sooner than we thought an early investors could -- out.
Earlier than we thought whether it's it's sort like the perfect storm.
-- -- certainly as you look at point and click advertising results have been have been -- disappointing.
Why GM's pullout -- hasn't the jury's still out but.
The reality is looking forward as well as we look at the -- -- in social networking that's here to stay.
The question is can be monetize and monetize -- effectively through through leverage and did you -- -- to grow execute upon prosper and and justified PE ratios of -- hundred that's an awful high PE ratio to justify -- -- do think people make money on the on the IPO you can get stock -- certainly the first day of my double or triple.
But -- -- long term play I'm not quite certain.
All right so the people say you know you get -- to magnitudes insisting his share.
You're you're all of a sudden talking about a valuation that is more realistic down to work that is not a -- -- for a company like this to -- -- long we've been doing.
But but another words that they could grow winds of these valuations you -- -- doubts.
I do have my doubts I think it might take a long time -- and again their biggest source of revenue is the is the click -- they do other things certainly with the click through advertising.
And you know 232 TV spots are dramatically more effective research say.
-- that until they find something that is as effective as the 32 TV spot or the other radio 62 radio spot.
Then that it may be in question what their long term outlook is more like a 32 TV spot on Fox Business up market.
That's are doing great idea -- are all right -- TV.
This is the answer it tae young thank you very much -- -- about it.
