Tuesday, May 26, 2009
There's a sucker born every $100 million.
Just an hour ago or so it was announced that an investment firm called Digital Sky Technologies has bought 1.96% of Facebook for $200 million, which puts the overall valuation of Facebook at $10 billion. $10 billion is still a lot of money, but it's 50% off Facebook's valuation from just two years ago when Microsoft bought a small slice for $240 million.
Here's what I don't get. Facebook making money. Yes, they have 200 million users. But so does Central Park. I've yet to see an ad, hear about a product or even have my curiosity piqued on Facebook.
What's more with the escalation of Facebook security breaches going around, I can't be the only one who's thinking the connections ain't worth the infections.
Finally, I guess there's a rule of thumb. Don't pay a lot of money for a company that has a lot of users who would likely drop the service if they were charged a fee.
I would not pay $10/month for Facebook or even $5. Would you?
Never the less, someone just paid about a buck a user.
Maybe they should call it Faceschnook.
Posted by George Tannenbaum at 1:58 PM