MySpace has justified it's $600M valuation, which you might have claimed was unj...

run4yourlives · on Aug 8, 2007

Let's assume that mySpace is making the $25M/month speculated. At a $600M, it would take 2 years of sustained $25M months to see a return.

At 100 million visitors, $25M translates to $4 a month per user in ad funds. $4, per user, per month, sustained for 24 months. Just to break even.

Those are insane prices at insane growth trajectories. You can call that justification of a valuation, but I call it unsustainable speculation.

staunch · on Aug 8, 2007

Well if you think Murdoch made a mistake it's not surprising you think Facebook investors would be making the same one.

The people who believed Google would monetize their business in a huge way seemed to do alright. I don't think Murdoch regrets his decision. I do think people should be cautious but you're going way beyond saying just that.

run4yourlives · on Aug 8, 2007

Well, although I think the mySpace deal is crazy, it's at least somewhat attainable. Murdoch has a bit of a history though of making bad moves in tech. He was nailed on Gemstar. Compared to the $11B he lost then, mySpace is peanuts.

The money being talked about though for Facebook and others cannot possibly be recovered though unless a number of stars align, and that's too much for me. ;-)

staunch · on Aug 9, 2007

http://blogs.zdnet.com/BTL/?p=5899

Still think it's crazy?

run4yourlives · on Aug 10, 2007

Yes, actually. Forecasts mean little, real numbers and perhaps I'll moderate my opinion.

He's projecting 60% ish growth.

koolmoe · on Aug 8, 2007

"At 100 million visitors, $25M translates to $4 a month per user in ad funds. $4, per user, per month, sustained for 24 months."

Unless I'm misunderstanding what you are trying to say, you're off by an order of magnitude:

$25M/100M = $0.25

Maybe it's not so insane after all.