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.


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Comments on “And The Bubble Rolls On… Facebook Wants $2 Billion”

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18 Comments
Seth Brundle says:

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…

Anonymous Coward says:

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.

Anonymous Coward says:

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.

Lalit Sarna (user link) says:

Re: Re: Re:2 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.

hola says:

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.

hey says:

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

DIANE BOWLES says:

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

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