 |
User: Login |
Weblog covering digital business
Digital Business, Live From New York. |
| Address URL | http://www.alleyinsider.com/ Registered: 22-Mar-2008 |
| Ads: | |
 Send to email | What Are Social Networks Really Worth? TechCrunch Gets It Mostly Right in NWSTWXGOOGMSFT |  By Silicon
el 23-Jun-2008 |
holding-hands.jpg: Paste this image in your site, Myspace, Facebook, Ebay copy this code...
 Facebook recently passed MySpace as the most-visited social networking site worldwide. But most of its growth is international, and it's still significantly smaller than MySpace in the U.S., where ad rates are higher than, say, Brazil. So what's it really worth?
According to a useful analysis by TechCrunch's Michael Arrington, News Corp.'s (NWS) no. 2 MySpace is still the most valuable social network. Facebook, he figures, is worth just 75% of MySpace, despite more unique visitors. And LinkedIn is only worth 6% of what MySpace is worth.
How'd he get there? By dissecting each site's traffic by country, and assigning each unique visitor a value based on their country's average online ad spend per Internet user.
He also applies three recent deals -- Bebo's sale to AOL (TWX) for $850 million, Facebook's funding at a $15 billion valuation, and LinkedIn's funding at a $1 billion valuation -- to put real-world dollar ranges on each site. He concludes that MySpace could be worth as much as $20 billion; that Facebook could be worth as little as $2.5 billion, etc.
This is a smart piece of analysis, but it's just a starting point. Why?
- The data he uses to establish the average Internet ad spend per person factors in all Internet advertising -- not just the social networking sector, which is relatively cheap ad inventory. We assume that's the best data he could get for all of the countries he analyzed. (We don't know if it varies enough by country to make much of a directional difference, anyway.)
- The two most lucrative valuation comps -- LinkedIn and Facebook -- should both come with big asterisks. The first one, which Mike acknowledges, is that LinkedIn's employed professionals should be worth much more per eyeball than any other social network user base. The second one, which he doesn't really spell out, is that no one really believes Facebook's $15 billion valuation, and that it's really the product of Microsoft's (MSFT) desperation to beat out Google (GOOG) for an investment bake-off.
Will those details skew a real, real-world valuation of each company? Yes. Does it matter? Not really. In the absence of better metrics, Arrington's analysis is a useful start.
social-net-valueranges.jpg: Paste this image in your site, Myspace, Facebook, Ebay copy this code...
See Also:
Facebook Passes MySpace And Gets Ready To Explode With Chinese, Russian Editions
How To Solve The Myspace/Facebook Revenue Problem: Sell Stuff
Facebook Traffic Catches Up To MySpace, But Not Where It Matters
Read 3 times
|
|
 |
 | Kotaku`s The Gamers Guide |  Blogger | XBOX 360 Gamers Weblog
Gossip, news and leaks for obsessive gamers Kotaku As if you don't waste enough of your time in a gamer's haze, here's Kotaku: a gamer's guide that goes beyond the press release. Gossip, cheats, criticism, design, nostalgia, pred |
| Social Network Spending Estimates Down Globally, Too | | Last week research firm eMarketer dropped its US social network spending projections; now it's taking down its projection for international social net spending as well. The company is projecting that by 2011, advertisers will spend $4.3 billion worldwide on social networks; it had previously guess the number would be $4.7 billion. The company's previous global estimate of $1.9 billion in 2008 s [..] Read complete article | | Published 21-May-2008 by Silicon in General
Read 9 times. More hits in   |
|
| Kotaku`s The Gamers Guide | Blogger | XBOX 360 Gamers Weblog
Gossip, news and leaks for obsessive gamers Kotaku As if you don't waste enough of your time in a gamer's haze, here's Kotaku: a gamer's guide that goes beyond the press release. Gossip, cheats, criticism, design, nostalgia, pred |
| Obama's Online Spend: Actually Tiny | | Barack Obama's campaign spent $7.97 million on online advertising before November. The money went to search, ad networks, social networks, local TV sites, newspaper sites and even NBA.com.
Of course the campaign spent more than half that m [..] Read complete article | | Published 06-Nov-2008 by Silicon in General
Read 0 times. More hits in |
|
|
Warning We are not responsible of information posted from external feeds. Use this website at your own risk.
Notice: We will not be liable for any direct or indirect loss or damage arising under this disclaimer or in connection with our website, whether arising in tort, contract, or otherwise.
|
|
| |
Hello, Guest
Online: 100 visitors
+ fotos
Yesterday we heard that the ad prices on social networks are getting cheaper. Today's data point for social networking bears:
eMarketer took [..] 
We've seen a series of companies that aren't social network companies hit with a flash of wisdom this year -- Hey! We're not social networks! -- followed by bold move: They [..] 
Amazon founder Jeff Bezos has invested an undisclosed amount of money in Social Gaming Network, a leading game developer on Facebook and other social networks. Bezos did the deal through [..] 
How can social networks make money? Chinese Internet portal Tencent shows us one model. Last year Tencent, which operates a series of services under the QQ brand, posted $523 million in revenues and $224 million in operating profit (PDF [..] 
