Comments on: Roundup: LinkedIn, Facebook, Wherifone, Google’s weather, and video consolidation?

By: Gene

Gene — Wed, 27 Dec 2006 21:33:26 +0000

Well,
obviously this is a Darwinian time for social networks. Some will die, but some of them may evolve by adding various features that may be make them more valuable and perform somewhat like a personal portal (yahoo?). They are trying to diversify income sources and i.e. MySpace added classifieds similar to Creigslist. In my opinion MySpace as of now is worth well more than $2b. Dating (heard a lot of stories there), classifieds, music/movie distribution, etc.. Only google deal is worth about $1 bil.

Facebook is a different story, but getting there.. $1 billion is a reasonable price, imho.

Gene

By: Scott Smith

Scott Smith — Wed, 27 Dec 2006 21:29:36 +0000

I think Link’n will have a tough time getting that kind of money in this current market. Now that there competitor Jobster looks like it has hit the skids…..Time will tell

By: Matt Marshall

Matt Marshall — Fri, 22 Dec 2006 17:58:09 +0000

E-Train,

You’re right. True spirit of my exercise obviously didn’t come across. Was supposed to show that even my assumptions for $4B were outrageous.

By: e-train

e-train — Fri, 22 Dec 2006 16:06:58 +0000

I think that it’s an insult to venturebeat to post numbers that even imply a $4 billion valuation for Facebook. I understand that your goal was to say that $8 billion is way out of line, but I think that a $580 million valuation is high.

First, remember that myspace users are not all high schoolers (I’ve seen statistics that indicate that a solid percentage are 35+).

Second, you have to look at the company that acquires Facebook. News Corp could value its customer base at $21/user (Intermix got a raw deal, by the way) because they are able to use it as a content distribution channel for their various media properties. If they were to go public, it would be more difficult to realize these revenue numbers as they would be slowed down by negotiations with media companies. Furthermore, the value would be questionable as there is no shortage of digital media distribution channels these days.

Third, I think that Facebook’s growth potential (even after opening up to geographic regions) is limited. I’d be interested to see uptake rates outside of the college population.

Fourth, just because college students are considered valuable customers, it doesn’t mean that they’re not also fickle customers. What is the cost of customer retention?

Of the two PayPal vets you discuss, it seems like Reid Hoffman makes a lot more sense than Peter Thiel. My bet is that career (LinkedIn), restaurants (Yelp) and self-expression (MySpace) end up consuming more of the post-college Facebook user’s time and Facebook has trouble breaking out of the college crowd niche.

Realistic valuation: $450 million ($50/user)
Generous valuation: $800 million
Bubble valuation: $1.5 billion
Trying-to-be-kind-to-Peter-Thiel-in-your-blog valuation: $4 billion
Drinking your own kool aid valuation: $8 billion