Bloomberg News

Facebook Defines Advertising, Methuselah’s Chachas Says: Keene

February 01, 2012

Feb. 1 (Bloomberg) -- Facebook Inc. has come to characterize advertising in the age of the Internet, according to Methuselah Capital Advisors’ John Chachas.

“They have come to define the absolute evolution of advertising, this asset sort of is the Internet,” Chachas, founder and managing parter of Methuselah, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Citing that there are “800 million active users across the globe who are deploying massive amounts of information about themselves into this apparatus, that can then be harnessed for advertising.”

The world’s largest social-networking service chose Morgan Stanley to take the lead on its planned initial public offering, four people with knowledge of the matter said. The filing may come today, people familiar with the matter said.

According to Chachas, Facebook may come out with a valuation of $100 billion. He said there is potential for further growth as the company has barely begun to dig in to its full potential in advertising.

“Remember, today when you turn on your smart phone, you don’t have any ads yet going through your news feed,” Chachas said. “There are a whole bunch of places Facebook can start to deploy advertising that will ramp its revenue up.”

There have been some comparisons between the Facebook public offering and Google’s $1.67 billion offering in August 2004. However, Chachas said the two are “totally different.”

“Google really started its business helping you to go look for things on the Web,” he said. “Facebook has decided it wants to the embodiment of you, your persona, your real person the Web. It’s a completely different instrument.”

According to Chachas, Facebook will use the money raised from the offering to continue its investments and maintain its “dominance” in the social-networking space.

--With assistance from Douglas MacMillan in New York. Editors: Dave Liedtka, Ken Pringle

#<163443.13144.2.1.99.7.25># -0- Feb/01/2012 21:07 GMT

To contact the reporters on this story: Austen Sherman in New York at asherman18@bloomberg.net; Tom Keene in New York at tkeene@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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