3 Comments »According to Fortune, Mark Zuckerberg was spotted walking through Seattle on the way to a meeting with Microsoft executives today. Perhaps he’ll walk out of there with a check for $500 million! That’s a check that I’d like to walk out of any meeting with. With a lofty valuation of $10 billion, one has to wonder if we are in the middle of a Facebook bubble. My thoughts? Yes we are.
Social platforms are indeed the wave of the future. Social platforms will also be limited to larger social networks for the next 12 months due to the development cost. Additionally, developers and advertisers aren’t going to want to develop for a ton of platforms, they will only want to develop for social platforms that provide the greatest impact. While Facebook may currently be the only social platform and will continue to be the leading social platform, it doesn’t mean there isn’t room for competitors.
The real question at hand is what is the actual value of social platforms or the social operating system? Nobody knows and that’s why Facebook is able to pull is some lofty valuations. Perhaps years down the road Facebook will become the next Microsoft. For the time being though, Facebook has yet to release any monetization tools that warrant their sky high valuation. Do you think Facebook will be worth 10 or even 15 billion dollars?
Obviously this is a speculative valuation but if FB is doing 150m in rev on a partially developed business plan and 40m odd daily active users, a desktop version that becomes ubiquitous and captures the majority of the market (the way Google has for search) could easily translate into 200m users with 1-2B in rev. Which justifies a speculative 10B valuation when the company that wants in can afford it and wants in NOW. The question for me is what will the terms be and does this shut out other suitors or an IPO?
Obviously this is a speculative valuation but if FB is doing 150m in rev on a partially developed business plan and 40m odd daily active users, a desktop version that becomes ubiquitous and captures the majority of the market (the way Google has for search) could easily translate into 200m users with 1-2B in rev. Which justifies a speculative 10B valuation when the company that wants in can afford it and wants in NOW. The question for me is what will the terms be and does this shut out other suitors or an IPO?
[...] wrote an interesting post today on Microsoft-Facebook Investment Talks are UnderwayHere’s a quick [...]