If you put any faith in popular rumors, you need to really pay up to get some of the most popular sites on the Internet today. All of the rumors about YouTube’s supposed $1 billion valuation got me thinking about what $1 billion would buy according to blogosphere rumors. Here is a very rough sketch – there aren’t reliable numbers out there to be found so I went with the blogosphere consensus int erms of asking price and user base:
-Rumored price: $550 million (widely discredited and emphatically denied but still a rumor)
-Registered users: 25 million
-Bebos for $1 billion: 1.82 Bebos
-Rumored price: $1 billion
-Monthly viewers: 20 million (best estimate I could find)
-Youtubes for $1 billion: 1 YouTube
-Rumored Price: $2 billion
-Registered users: 10 million (best estimate I could find)
-Facebooks for $1 billion: 0.5 Facebooks
So, what would you rather buy — 37MM social network users at Bebo, 20 million video junkies at YouTube, or 5 million college students on Facebook? For me, the answer is none of the above. I think that all of those companies are great services and satisfy the needs of their user bases. However, I am not sure that I would be willing to spend $1 billion (assuming I had it) on popular concepts that haven’t yet shown the way to monetization. I am not saying that these companies need to get to $100MM run-rates to be interesting, but they do need to show the seed of a business model that warrants the $1B price tag.
The other thing that’s interesting is to look at the implied value per user. While these numbers are speculative, it appears that a college student is “worth” 4x as much as a video junkie. And a video junkie is about twice as valuable as a generic social networker.
Sometimes its fun to play with numbers even if they are just speculative. Until some or all of these companies get bought or get big enough to demonstrate strong business models, the idle speculation will continue.