http://money.cnn.com/2007/10/24/maga...ion=2007102508

So, that means that Facebook is worth $15 billion.

Last year, Mark Zuckerberg, the CEO and founder of Facebook, was looking to sell the site for $1 billion and could not find any suitors for the hefty pricetag. Now, 1 year later, Microsoft, one of the world's largest corporations, buys a tiny fraction of the site, for nearly 1/4 of his original asking price.

MySpace, which was purchased two years ago by the NewsCorp for $580, is still today's largest online social networking site.

So, is Mark Zuckerberg the next Bill Gates? Did Rupert Murdoch get the buy of the lifetime with MySpace?

Microsoft is soaring afterhours today.

 

I think Facebook is overrated...



<---- refuses to join it...

 

facebook is LEAPS and BOUNDS better than myspace or friendster

The interface is clean, and the ways to interact with people is just great

Myspace is just full of porn ads, on top of the regular bullshit ads, and friendster is just kinda boring

Now, does that make it worth $15 billion? I dunno about that...

 

Just think if they would have opted for the navigation system and titanium seats.

 

I'm no expert but here's my take

- Gives facebook a valuation so high, other competitors (google, yahoo) would REALLY have to think hard to buy it out
- Gives Ad rights until 2011 (i think, hope they dont mess it up)
- Dont need to buy facebook => dont need to add another division in MS, which may not fit the core model

 

 

Lot better than myspace n friendster...communication and networking wise

 

Extrapolating the 1.6% share for the $240M into a value of $15B is not a financially sound conclusion at all.

Microsoft paid $240M for advertising rights on Facebook PLUS the 1.6% equity interest.

 

Oof. I'd like to counter that...just really how "connected" do we have to be? If I have a friend who I know OUTSIDE of the computer/Internet world, why do I need to be "connected" to them further on some site...? My friends have my cellphone number, home number, and heck, even my number at my Mom's. Do they need yet another outlet to find me...or connect...?

And as for the people I know online...well, the "friends" that I chat and e-heckle (i.e. you bozos and etc.), I have AZ and my instant messenger to use there. Do I need one MORE avenue to "connect" with these people?



My answer: no thanks.

 

This kid is a fool, this company will never be worth 15B. And when it's not, I bet microsoft has a clause where they'll get their money first and foremost.


He should have sold to Yahoo for the $1B they offered him earlier. This kid will be screwed once googles version comes out next year.


BTW, a lot of reports say that Microsoft rushed this investment before google got a chance.

 

I don't have any "online" friends on myspace. Most are old HS friends, or friends that i'm no longer in real close contact w/. I find it very conveniant for those friends, catch up through a quick message every few months, find friends i haven't seen in years, etc.


It actually allowed me to find a kid a few months ago who was my best friend till I was about 12 when he moved away.




BTW, does anyone still use friendster? I bet facebook follows the same fate.

 

If he's a fool, I'll take being a fool any day.

 

Facebook is what I think what Classmates.com always wanted to be. But FB is better and free.

 

Yup, same concept, just different business model. Not enough free content on classmates.com to interest anyone to use it.

Facebook is more the "get as many eyeballs as you can looking at it and worry about making money off the medium later" model.

 

Well to counter that :P - 'connection' wise, i don't talk to all my friends or people that i know that may be on my friends list, over the phone or email. I've been able to hit up friends that i talk to now n then on there and ask them about specifics just cause i knew where they're living/working/etc. from their updated profile because i don't talk to them on the phone much, so wouldn't know otherwise.

Worth it to me.

 

^ & it's free so what's the harm. Use it as much or as little as you like. I'm on there, but only check in every couple of weeks or when I get an email saying someone posted something or added me or whatever...I've gotten back in touch with a couple of people. I like that.

 

Valuing it at $15 billion is the most accurate valuation one can get at the moment going by the investment already made in this business at this point in time. Of course a business is only ever really worth X if the price is paid for 100% of the ownership rights.

 

I have a MySpace account, but rarely use it. Facebook is much more cleaner, but will they actually make money....If Facebook doesnt sell within a year or so, they'll be f*ck.

 

It is not at all an accurate valuation...not if you arrive at the $15B via $240M / 1.6%.

The $240M was certainly investment in the company, however, what was purchased with that $240M was not merely the equity, but also advertising considerations.

I honestly have no idea what Facebook is worth, but that reasoning is simply flawed. If there was some information regarding the value of the advertising considerations vs the value of the equity, you could then subtract that from the $240M then divide by 1.6% to get a much better figure.

 

I like the interactivity of MySpace more than Facebook. The interface of Facebook is leaps and bounds above MySpace, but I have a tough time figuring out everything with Facebook. Myspace is far and away more user friendly.

 

It's a $240 million equity investment for 1.6 percent. The advertising part of it is separate. So, you can extrapolate the value of Facebook.

 

Read the first line of the link.

 

If MS didn't get the ad deal, I highly highly doubt they would've made that equity investment.
If google, or yahoo, got exclusive ad rights, I'd pretty much guarantee you wouldn't be reading about this deal.
Simply put, I don't believe the person in that quote is telling the truth.

 

In no way is the $240M "seperate" from the advertising agreement.

Sure, accounting-wise it is seperate, and not taxable as advertising revenue currently and simply goes into the equity side of the balance sheet.

However, to believe that how the accounting of the transaction is booked is equivalent to the actual business aspects of the deal is simply incorrect. Exclusive advertising rights on Facebook certainly has worth...otherwise Microsoft would not want them. That worth must be subtracted from the $240M if you are going to try and extrapolate market value of the company.

 

Both Microsoft and Facebook have been very specific about calling the $240 million an equity stake for 1.6 percent. Now, that could be an attempt to artificially inflate the value, but even if the value is off by 20 percent, it's still pretty surprising considering News Corp. purchased MySpace two years ago for $580 million.

 

It's not that it is a untruth...it's just characterizing a different aspect of the deal than is relevant when discussing whether or not te $240M represents a 1.6% share of the company's value.

 

They aren't trying to "artificially inflate the value", it is just that the deal's specifics are being used inappropriately.

 

Well, the "specifics" of the deal say $240 million for an equity stake of 1.6 percent.

 

Granted, the $15 billion valuation is in all likelihood an overestimation. It's only worth as much as someone is willing to pay, and I don't think anyone would pay $15 billion for Facebook. I think Microsoft got caught in a bidding war with Google over the small piece of Facebook that was available. But regardless whether it's worth $15 billion or $5 billion, it's a lot more than anyone thought. The bar for the market has been set higher with this purchase.

 

I agree with that completely.

And "gettign in before google" has a value to Microsoft...that value must be subtracted also if you wat to extrapolate market value based on the cost of that 1.6%.

 

hmm... I can almost swear that I had signed up for face book originally in 2002 or 2003, and my account was just sitting there because it sucked so much. I didn't start using it much until it became much more popular starting in 2006 (I still don't use it that much..)


Anyway, any speculations on this thing's IPO anytime soon?

 

^ - I though I was Jan of 03, but it might have been Jan of 04. Either way I thought I was late joining.

 

The owner of Facebook said 1-2 more years.

 

Facebook is a great social networking tool. However, if they aren't careful, they're going to turn into the next MySpace.

It's amazing how much the damn website is worth...

 

AZ > *

F the people I went to HS with. Phone calls for the people I went to college with.