Japanese Car Zone - View Single Post - Facebook a $10 billion company? Anyone use it?

450SEL6.9 · 09-25-2007, 11:03 AM

Most of the articles I read in the financial press already assume Facebook will be huge forever. To me, they all read like propaganda justifying Facebook's price. I think paying that much for a minority stake is just bad business. I'm not saying a 5% investment is not reasonable. I'm saying that $500 million for only 5% is not reasonable. Last year the price quoted for all of FB was $1.3 billion.

How much would Rupert Murdoch's myspace be worth today? He paid $500+ million for it in 2005. I think he called a $5b valuation for FB ridiculous. I think he is the savviest businessman around. He really has to reason to talk down social networking site valuations because the value of his asset rises if FB fetches $10b. Murdoch was in this business before it was cool and fashionable in 2005.

Do smart business executives have some brain defect when it comes to valuing internet companies? Everyone raves about the online ad market today, just as experts raved of TV advertising in the 1950s and how it would be huge for the networks and entertainment companies. You would have done better holding a boring old investment like tobacco stocks than buying entertainment and advertising stocks in the '50s.

09-25-2007, 11:03 AM	#5
450SEL6.9 Inactive Account Join Date: Oct 2005 Posts: 1,142 Thanks: 172 Thanked 108 Times in 95 Posts	Re: Facebook a $10 billion company? Anyone use it? Most of the articles I read in the financial press already assume Facebook will be huge forever. To me, they all read like propaganda justifying Facebook's price. I think paying that much for a minority stake is just bad business. I'm not saying a 5% investment is not reasonable. I'm saying that $500 million for only 5% is not reasonable. Last year the price quoted for all of FB was $1.3 billion. How much would Rupert Murdoch's myspace be worth today? He paid $500+ million for it in 2005. I think he called a $5b valuation for FB ridiculous. I think he is the savviest businessman around. He really has to reason to talk down social networking site valuations because the value of his asset rises if FB fetches $10b. Murdoch was in this business before it was cool and fashionable in 2005. Do smart business executives have some brain defect when it comes to valuing internet companies? Everyone raves about the online ad market today, just as experts raved of TV advertising in the 1950s and how it would be huge for the networks and entertainment companies. You would have done better holding a boring old investment like tobacco stocks than buying entertainment and advertising stocks in the '50s.