What is the real value of Facebook and Linkedin?
February 22, 2011 Leave a comment
[tweetmeme source= “brennels” only_single=false]So, I finally got around to watching the movie “The Social Network”. The one line that stood out to me was when, Mark and Eduardo were having dinner in NYC with Sean Parker and he said “what is really cool is a Billion”. Well, a few years later and not only is Facebook worth a Billion but closer to fifty. My initial reaction was what is the value of the 500 Million users? Well if Facebook is worth 50 Billion then each user is valued at $100 each. And I highly doubt that Facebook users are worth $100 but our information and social habits are and that is what is interesting to prospective investors and or advertisers. This is why Facebook is valued at 50 Billion.
There are a ton of other metrics and measurements that help this valuation (why is facebook worth 50 Billion Check Out These Charts) but I still think the real value is the unfettered access to us, the Facebook users.
Now I wouldn’t think my theory would exactly work for Linkedin but it does. Linkedin has recently been evaluated at 3 Billion and if you divide that by the 60 Million users each Linkedin users value is $50. I would think that would make sense from a valuation stand point since Linkedin is certainly more of a professional network versus social so the value to advertisers and the target demographic is different as well.
It will be interesting to se how this all shakes out with Facebook, Twitter and Linkedin. Sounds like IPO will be in the future for some and acquisitions for others.
What do you think the future and valuations will be for these companies?