I'm sure people investing $200million aren't idiots, so it's not like this logic is lost on them, so I'd be really interested in what the investment terms are to make this a sensible deal.
I'm sure they aren't either, but every bubble in history wasn't caused by people being sensible.
Both Facebook and Twitter are in serious bubble positions, just like MySpace and Friendster and pets.com.
The odds are very high that the money will go the same place
Murdoch's billions went - down the closest toilet. Let's keep in mind that people thought Rupert got a sweet hart - even criminal - deal with MySpace at the time. In hindsight he looks like an idiot.
When the company in question has no reasonably identifiable income stream and stratospheric valuations, it's best to stay far, far away.
Murdoch paid around $330million for MySpace, MySpace is doing annual revenues of 400m+ with a staff of around 1000. General estimate of MySpace's current market value tend to be around the $5 billion point.
Yes. Because clearly being the 25th most popular site in the US has no value.
No-one's disputing that Facebook are beating MySpace, but saying they're worthless is like saying Pepsi are worthless because they're not Coke.
At the revenue levels they're at and at the size of their employee base, they could easily cut costs and make back that 327 million in a single year (at the cost of long term growth). Regardless if you think they're worth 1 billion or 5 billion, they're clearly worth more than worth Murdoch paid for it.
He could sell tomorrow for the price he paid for it and have private equity buyers bite his hand off.
I'm sure they aren't either, but every bubble in history wasn't caused by people being sensible.
Both Facebook and Twitter are in serious bubble positions, just like MySpace and Friendster and pets.com.
The odds are very high that the money will go the same place Murdoch's billions went - down the closest toilet. Let's keep in mind that people thought Rupert got a sweet hart - even criminal - deal with MySpace at the time. In hindsight he looks like an idiot.
When the company in question has no reasonably identifiable income stream and stratospheric valuations, it's best to stay far, far away.