

Facebook at $10 Billion Valuation, Microsoft to Invest? - bosshog
http://online.wsj.com/article/SB119065193646437586.html?mod=hpp_us_whats_news

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greendestiny
I hated facebook. From afar of course because I wasn't particularly interested
in using it. Then, inevitably, someone wanted me to get on facebook, so I did.
I hated the interface and the aesthetics, and really wasn't interested in
making a pointless 'this is who I am' page.

But then a few interesting things started happening, my friends started using
these little facebook applications (oh how much I hate the installing software
analogy they've gone with is a whole other post) and I started using them as
well. Like in the olden days (ie last year) when someone found a fun flash
game and sent you the link and you sent your scores back and forth.

Like all these social networking sites its asynchronous communication with a
low social overhead (your friends just happen to see what you're doing) and
with lots of stuff to do. I think its going to become the internet for a large
proportion of the population.

It might get beaten eventually, but in the short term the biggest potential
challenger is google. If google leveraged the gmail user base to make orkut
bigger and integrated it with igoogle widgets, it'd be something approaching
facebook. I think they are somewhat reluctant to do that to their user base
though, although it could be done unobtrusively.

------
bharath
"Acquirers are less prone to irrational exuberance than IPO investors. The
closest you'll get to Bubble valuations is Rupert Murdoch paying $580 million
for Myspace. That's only off by a factor of 10 or so."

\-- PG, circa Nov 2005

:)

~~~
pg
I was probably wrong in saying it was only worth a tenth of that, but I still
think $580 million was high. Remember, what he bought wasn't the present-day
Myspace. Most of Myspace's user base (and thus value) was added since the
acquisition.

~~~
Jd
Something is worth whatever people are willing to pay for it, esp. in the case
of internet phenoms.

~~~
asdflkj
Yeah, but we're not talking about people here. We're talking about one guy,
who possibly did a stupid thing by buying it. If someone mistook glass shards
for diamonds and bought them for $10k, it doesn't mean the glass shards are
worth $10k.

~~~
Jd
One guy who wouldn't have paid so much if there weren't other people offering
similar amounts. My point is that you can't pick an arbitrary amount ($58
Million) for the valuation - but that this amount is _always_ dependent on
other people.

The problem with your example is that we all have limited knowledge about any
given business transaction. Assuming ten people were standing around bidding
on little rocks thinking they are diamonds, for that moment (to those people)
they are worth $10k. When they have more knowledge (i.e. that this is glass
and not diamonds) then the worth of those rocks drops. So the worth varies
based on the knowledge in the market and valuations of others.

Now in any given market if one has more knowledge about a good or service one
might be able to say that a good or service is over valued. For instance, I
have always believed Myspace to be over valued. However, this realization does
not give one the ability to pick a number out of the air and state that it is
a _correct_ valuation.

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kirse
"Facebook, which is used by over 40 million people to set up their own
personal Web pages...has emerged as the poster child for the latest Internet
wave."

Yes, the latest e-Wave to hit the the Beach of Interweb e-Shores.

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nickb
Insane. Completely irresponsible. If I were a MSFT shareholder, I'd be pissed.

Just watch... Steve Ballmer will have some extremely hard time at the next
shareholder meeting when questions start flying his way.

------
Shooter
IN OTHER NEWS: Bill Gates and Steve Ballmer were seen taking hits from a large
bong outside the headquarters of the Redmond giant on Monday.

Ballmer was quoted as saying,"This wacky tobaccky is sooo good. Let's buy
Dunkin Donuts for $20 billion! Mmmmm, donuts..." He then proceeded to do a
Monkeyboy Dance, to the giggling delight of a baked Bill Gates.
<http://www.youtube.com/watch?v=Nc4MzqBFxZE>

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eusman
somehow this doesn't feel right.

Google is nearly impossible to replicate where as social networks is and will
always be a trend. Also people tend to use more than one of these social
networks.

PG pondered once in one of his essays, if I remember correctly, that naturally
myspace or any other current social network will not be the only one in the
years to come.

update: "So in a hundred years the only social networking sites will be the
Facebook, MySpace, Flickr, and Del.icio.us? Not likely."
<http://www.paulgraham.com/startuplessons.html>

The internet population is already 1 billion. Thats plenty of people and
opportunities.

Microsoft and Google with all that money should just buy all the startups they
can and kill Facebook for good...

Or we should just expect the new "Norton" to invent the NEW
anti-"socialnetwork"/virus

~~~
zhyder
Facebook is harder to replicate than Google in one way: Facebook has a large
network effect on its side, Google (search) doesn't.

~~~
aston
That Google maintains its audience despite zero lock in is a testament to just
how strong their search product is. I don't see Facebook opening up all of the
details of their network.

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pistoriusp
Did anyone else notice this:

According to (people|person) familiar with (the matter|those talks|the
company)

~~~
DougBTX
It was painful.

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mynameishere
10 billion dollars? My god, if I was a major MSFT stakeholder, I'd be getting
the tar and feathers ready.

~~~
breck
I disagree. Over 20 million people use FB every single day. Over 40 million
active users(used it within 30 days).

They have something in there to monetize, big time. Watch, $20 billion today
would be a steal. FB will be worth $100B in 3 years.

~~~
rms
Agreed. A lifetime user of facebook is worth $500, easy. I don't see what is
going to get me to leave the platform, ever.

~~~
Jd
Myself in 1999: 'A life time user of AOL is worth $500 easy. I don't see what
is going to get me to leave the platform, ever.'

~~~
breck
Interesting point, but I would guess AOL made $500 off each user they had in
1999.

~~~
paulgb
They also charged money though. Unless everyone just stocked up on those 500
hours CDs.

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augy
Fred says the 10billion is not real

<http://avc.blogs.com/a_vc/2007/09/facebook-really.html>

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axod
Microsoft..... desparate?

~~~
uuilly
Facebook..... obstinate?

