And The Bubble Rolls On... Facebook Wants $2 Billion

from the blowing-money-flavored-big-league-chew dept

Business Week's acting like it's got a scoop that social-networking site Facebook is holding out to sell for $2 billion. Facebook's been in play for a while, though, and apparently people are having a hard time justifying the valuation and figuring out exactly why they should buy the company. Does this sound familiar? It's exactly what happened with Skype. A company with unknown financials -- but huge buzz, a hard-to-quantify metric -- starts getting talked about in a faux bidding war through the press, with a price tag of $1 billion, then $3 billion, then ends up selling for as much as $4.1 billion despite legal uncertainties and the lack of an apparent, cohesive strategy. Facebook's social-networking cohort Myspace sold for $580 million, despite questions about its real value, and it gets roughly four times the monthly page views of Facebook. Still, it wouldn't be surprising to see somebody dump the $2 billion for Facebook because they don't know any better, don't understand it and because they're afraid of missing out on this whole social-networking thing, even though the signs are gathering that these sites are little more than fads.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    farlane, Mar 28th, 2006 @ 10:53am

    If I Had $2 Billion

    I think I'd buy 230,000,000 pounds of aged white cheddar before buying Facebook.

    With a site like MySpace/Facebook, you're basically buying their user base + a realistic shot at their demographic. It may be that a Viacom would believe in their 5.5 billion page views, but I'll stick with the cheese, Monty.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Seth Brundle, Mar 28th, 2006 @ 11:15am

    enough bubble references

    I get really tired of people referencing 'the bubble' whenever a large web property is being sold or goes public.

    The web is part of our economy now, and there are thousands of profitable web businesses, and yes some are worth billions.

    'The bubble' was not some sort of permanent lesson that web properties in fact have no value. It was just a long-expected market correction in the learning curve of a major new investment sector. Move on...

     

    reply to this | link to this | view in chronology ]

    •  
      identicon
      Anonymous Coward, Mar 28th, 2006 @ 12:03pm

      Re: enough bubble references

      I get really tired of people referencing 'the bubble' whenever a large web property is being sold or goes public.


      I get really tired of the fairly recent phenomena of people whining on Techdirt. If you want to whine about the site and/or content please feel free to head over to slashdot.

       

      reply to this | link to this | view in chronology ]

      •  
        identicon
        Andrew, Mar 28th, 2006 @ 12:19pm

        Re: Re: enough bubble references

        I get really tired....

        Yeah, me too... what's the deal with that?

         

        reply to this | link to this | view in chronology ]

        •  
          identicon
          Anonymous Coward, Mar 28th, 2006 @ 12:59pm

          Re: Re: Re: enough bubble references

          Your complaining about someont else complaining, good job. I like facebook but I don't see how it is justifiable to spend 2 billion on a site full of mostly underclassmen undergrads with the majority living off mom and dad having little money of there own to spend on whatever products the buyer of the site might want to serve up.

           

          reply to this | link to this | view in chronology ]

          •  
            identicon
            Lalit Sarna, Mar 29th, 2006 @ 4:24pm

            Re: Re: Re: Re: enough bubble references

            And what about the correlation between education and spending power ?

            Why does CPA pricing models for advertisement have a much higher price than CPC model ?

            Simple better rate of conversion.

            Contention being that marketers would have a higher interest in Facebook due to the correlation between spending power and education.

            Its simple more efficient targeting as compared to some of the larger players.

             

            reply to this | link to this | view in chronology ]

  •  
    identicon
    dani, Mar 28th, 2006 @ 11:24am

    Look at the price of domains

    Onabudget.com...I thought of some pretty big things I could do with that domain name.

    The domain name is vacant, but the going price is $2500 right now...thats just for a name so I imagine an already profitable business could sell for quite a bit.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Anonymous Coward, Mar 28th, 2006 @ 1:05pm

    Re: Re: Re: enough bubble references

    I'm getting tired of people pointing out that other people are whining about people whining.

     

    reply to this | link to this | view in chronology ]

    •  
      identicon
      dj_krztoff, Mar 28th, 2006 @ 1:18pm

      Re: Re: Re: Re: enough bubble references

      "I'm getting tired of people pointing out that other people are whining about people whining."

      God I hate when people post nonsense like this. Quit whining about people that point out people that whine about whiners; enough is enough!

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    hola, Mar 28th, 2006 @ 1:13pm

    Facebook may not be worth $2 billion, but it's certainly worth more than myspace, even with fewer pageviews.

    Why? Because whereas myspace's main userbase is uneducated high school kids (with many exceptions, of course), facebook caters to college students with much, much more earning potential. Everyone (and I mean everyone) I know at a major college uses facebook daily. It has replaced IM for generally keeping track of friends. If Myspace is worth half a billion, facebook is worth at least $1billion. Assuming the benchmark is valid.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    David Kane, Mar 28th, 2006 @ 1:20pm

    The value of Facebook is that the advertiser can target a specific age group unlike MySpace, this means better directed advertising that reduces the risk of over exposure, very valuable in this day with a more sophisticated and cynical consumer.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    David Kane, Mar 28th, 2006 @ 1:22pm

    The value of Facebook is that the advertiser can target a specific age group unlike MySpace, this means better directed advertising that reduces the risk of over exposure, very valuable in this day with a more sophisticated and cynical consumer.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Random Schmuck, Mar 28th, 2006 @ 9:36pm

    Re:

    facebook caters to college students with much, much more earning potential.


    Especially since a sizeable portion of these college students now have credit cards of their own and little experience at managing money. Some of these students will invariably spend with reckless abandon.

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Sohrab, Mar 29th, 2006 @ 1:42am

    is this a joke....$2 Billion?

    1st im on myspace and facebook. their both retarded but if anything, atleast anybody can join myspace while facebook is so closed doors.

    again, $2 Billion? wtf

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Matt, Mar 29th, 2006 @ 1:33pm

    I'd buy it for $2 billion if it came with sharks that had laser beams attached to their heads... (puts pinky to side of mouth)

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    hey, Sep 7th, 2006 @ 9:24pm

    facebook

    facebook is a huge success and worth 2 billion. College students log onto the site 5 times a day. The photo options have replaced the awful Webshots. People hardly use IM any more. Any advertiser who is looking to conquer the 18-23 age market would have to go NO WHERE else other than facebook. Facebook is also expanding to area networks, high schools, religous groups, etc. It tries to keep its door somewhat closed to keep all the stupid people who create a bunch of profiles, every profile is legit, unique, and concise.....nab it at 2 before it goes to 3

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    DIANE BOWLES, Mar 23rd, 2008 @ 1:20pm

    Complaining/enquiries

    I HAVE A QUESTION TO ASK FACEBOOK ABOUT THE PICTURES I HAVE ON MY PORTFOLIO, BUT I AM FINDING IT DIFFICULT EXACTLY WHO WOULD BE ABLE TO ANSWER MY QUESTION? I REALISE THAT IT IS NOT THIS SITE, BUT IF YOU COULD, COULD YOU PLEASE HELP ME ALONG AND GIVE ME A WEBSITE ADDRESS OF WHO WOULD BE ABLE TO HELP ME, AND ANSWER MY QUESTION.

    THANK YOU VERY MUCH

    DIANE BOWLES

     

    reply to this | link to this | view in chronology ]

  •  
    identicon
    Paul Harrison, Apr 11th, 2008 @ 9:04am

    Diane, are you on crack?

     

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This