The gist of his column: Facebook says it has 845 million monthly active users, but “active users” doesn’t necessarily mean a user is coming to Facebook.com.
Facebook counts as “active” users who go to its Web site or its mobile site. But it also counts an entire other category of people who don’t click on facebook.com as “active users.” According to the company, a user is considered active if he or she “took an action to share content or activity with his or her Facebook friends or connections via a third-party Web site that is integrated with Facebook.”
And this is supposedly a problem because:
“Think of what this means in terms of monetizing their ‘daily users,’ ” Barry Ritholtz, the chief executive and director for equity research for Fusion IQ, wrote on his blog. “If they click a ‘like’ button but do not go to Facebook that day, they cannot be marketed to, they do not see any advertising, they cannot be sold any goods or services. All they did was take advantage of FB’s extensive infrastructure to tell their FB friends (who may or may not see what they did) that they liked something online. Period.”
But, maybe it’s not a problem? Later on, Sorkin debunks himself and Ritholtz:
In fact, Facebook’s “Like” button on third-party sites or through “Facebook Connect” — its platform allowing users of other Web sites to sign in through Facebook and share information — is valuable, even if it isn’t easily monetized.
All of those “Likes” help Facebook create a treasure trove of data that should make its ability to target advertising to its users all the more valuable. (Of course, some people will be unnerved by how much Facebook knows about them.)
To recap: Facebook’s active users aren’t visiting the site everyday, so there’s no way Facebook can monetise them. Except, actually, it’s still capturing super valuable data that will be monetized down the road.
For a thorough takedown of Sorkin, check out Eric Eldon at TechCrunch >