Since I have been in SF the last week there has been growing speculation about whether FaceBook will be sold, and for how much.

The word is that it has been pretty much wrapped up with Yahoo! for round about a Billion.

Very interesting post from the A VC blog about how the numbers break out on the valuation…. Here is some of it:

The $1bn price tag that has been floating around makes this choice
even more difficult. I am going to need some help from all of you so
please chime in on all these assumptions in the comments.

Let's say that you think Facebook will get to 10bn page views a
month shortly. Let's give each page an effective CPM of $1. Then that's
$10mm per month in revenue. I am not sure if I should add the Microsoft
deal to that number or not. I'll hedge and say that they can be a
$150mm/year revenue company near term staying fairly closed.

But if they open it up and get to MySpace numbers (~35bn page views
a month), they could be a $500mm/year revenue company near term.

The latter approach could easily justify a $1bn number from Yahoo!
But it also would require them to really open up Facebook and that
could sow the seeds of its eventual decline.

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Posted in Main Page by Chris Gilbey No Comments Yet