Facebook face-off

As founder of online networking phenomenon Facebook, the improbably youthful Mark Zuckerberg, squares up in court today to a trio of disgruntled former college mates who say he pinched their idea, once again we see the unrivalled power of the internet at work.

Last Updated: 06 Nov 2012

The power to generate buzz, that is. The vast amounts of comment and attention devoted to the new Web 2.0 darlings like Facebook, MySpace and YouTube - and the widespread indifference to their profitability or otherwise - is all uncomfortably reminiscent of the old dotcom hysteria of the late 90s, when clicks, eyeballs and ebitda briefly took over from pounds, shillings and pence as the City's favourite measures of the bottom line. Here at MT we recall ebitda - earnings before interest, taxation, depreciation and amortisation - particularly fondly, as a touchingly optimistic way of making debt-laden dot-bombs trying to sell dogfood online look like they might actually be profitable, given half a chance.

Meanwhile, one of the handful of survivors of the early days of Web 1.0, Amazon.com, is actually doing pretty well. Its results for the traditionally-quiet second quarter, show a tripling of proper net profit from last year, up to $78m from $22m. That's well ahead of expectations, and shares rose 10% as a result. And although that doesn't look quite so good when you realise that it was on sales of nearly $3bn, margins - always a tricky subject for Amazon - are up too, to around 4% from just over 2%.

All of which just goes to show that technologies may change but it doesn't get any easier to make money on the web. Zuckerberg will probably win his court case, but may yet come to regret turning down Yahoo!'s offer nonetheless.

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