Facebook’s New Price: $8 Billion?
Well, it is called Facebook, a name that invites a certain amount of narcissism, or at least some inflated self-worth. Yahoo probably didn’t dream that an offer as high as $1.62 billion would be rejected. But Yahoo probably didn’t expect to hear the metallic hubris pinging out a tune of $8 billion, either.
Though Facebook board member Peter Thiel says Facebook isn’t for sale, Yahoo’s YouTube-comparable and MySpace dwarfing offer must have been quite the white-gloved slap in the face. Thiel says it’s worth at least $8 billion, matching its value up with MTV’s.
That valuation is based on the idea that Facebook could generate $1 billion profit by 2015, nine years from now, when only a few will remember a site called Friendster ever existed.
Thiel’s numbers would make present and future Facebook eyeballs worth nearly ten times the eyeballs of MySpace. Though Facebook has doubled its membership in the past year to 11.6 million, move the decimal over to the right for a closer estimation of the number o people that traffic MySpace, which sold for what is now a paltry $580 million.
Though there are some that say MySpace shareholders were grossly cheated in that deal with News Corp.
Even if that is the case, $8 billion? Who do they think will invest that much change into a site that could fall into relative obscurity in a couple of years, if its membership finds something hipper?
Maybe, reports Bloomberg, Facebook will carve itself up in an IPO to generate that cash. Though, they may want to take a cautionary tale from Vonage.