Brier Dudley's Blog
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
E-mail Brier|
206.515.5687
|
Follow Brier on Twitter|
Microsoft Pri0 blog|
Subscribe | Blog Home
September 25, 2007 4:17 PM
Facebook's rumored valuation is insane
Posted by Brier Dudley
Facebook is creating some nice business opportunities for software developers, but extrapolating a $10 billion value out of Microsoft's possible $300 million investment in the company seems wacky.
That may be the calculation that investors and bankers are making, but it seems like a tablespoon whipped into a gallon by dealmakers.
It seems as if they're hoping to make a last big splash before the downturn in ads and the Internet sector that Henry Blodget's been talking about lately. Placing a few leaks is always how they seem to goose the bidding.
I think Microsoft's offer, if correct, says something different about the long-term value of Facebook.
If Facebook were a crucial component of the online ad world's foundation, Microsoft would be offering billions and you probably wouldn't be reading much about it until the papers were signed. Microsoft strategically leaks all the time, but not so much when it's making deals.
Steve Ballmer is still kicking himself for not getting DoubleClick, a company Microsoft viewed as critical. That's partly why he jumped on aQuantive, a company that steadily worked its way into that foundation.
But Facebook doesn't bring that much -- besides a wave of new users -- that Microsoft doesn't already have or couldn't build from spare parts. That wave came from other social networking sites that had the buzz yesterday. Has Facebook figured it all out? If so, would Microsoft offer as little as $300 million?
Microsoft is desparate to catch up to Google. A stake could keep Facebook close and Microsoft plugged into its direction, without risking a huge investment in a business that could lose users and developers to the next hot thing. The total valuation doesn't matter that much if Microsoft gets those things.
Maybe Microsoft is being especially clever and goading Google into countering with a huge investment in Facebook, just as the search company is trying to be more careful about its expenses and facing a possible slowdown in advertising.
I'm not trying to diss Facebook. It's likely to be here for some time and, as I said above, create opportunity for smaller companies.
But after reading so many stories about its huge value and potential investors, it's feeling like one of those perfectly groomed houses that sits on the market a long time because it's priced too high.
Maybe I'm totally wrong here. The $10 billion valuation could indicate that biggies like Microsoft and Google are still so desparate to win the Internet war that they'll pay the sky for the most promising Web startups.
That would be inspiring to all the smaller companies working their way up, but it doesn't seem realistic.
My sense is the big players are starting to hunch over the cards they have on hand. Is Facebook the next billion-dollar fairy tale, or are those over for a while?
Mar 18, 08 - 12:00 AM
SourceLabs launches open-source support suite, new Linux play
Mar 17, 08 - 12:16 PM
Amazon pre-announces Microsoft's Vista SP1 ship date
Mar 17, 08 - 09:32 AM
A vision of the Web services future Microsoft is developing
Mar 14, 08 - 02:15 PM
MySpace goodies coming to WSJ, CTO says
Mar 13, 08 - 04:43 PM
Nanaimo gaga for Google

nwautos
Dear Tom and Ray: I have a 2007 Toyota Prius. I was hoping you could help me with what I suspect is a cheap sales tactic by my Toyota dealer....
Post a comment

- PHOTO: Suspect identified in Lynnwood-area homicide | The Blotter
- Closing arguments in Haq murder trial expected tomorrow | The Blotter
- PHOTO: Seattle police search for armed robbery suspect | The Blotter
- Photo call: Show us your pirate pugs and cat clowns! | Tails of Seattle
- Photo Op-ville | Olympic Outsiders
- Photo: Obama with Steve Jobs, Zuckerberg, Ellison, et al. | Brier Dudley's Blog
- Downtown Seattle condos are finally filling up
- Jon Kitna's greatest play: NFL QB to high-school math teacher
- Boy plucked from Wallace Falls: Rescuers 'should feel like heroes'
- UW, WSU expand enrollment in schools' engineering programs
- 20-somethings go home to regroup
- From slow hikes to high wires, San Juan Island has new treats
- Highlights — and low points — of Chihuly Garden and Glass | Art review
- Pet ID tag gets an update with QR code and web link
- Recession Generation hit hard in struggle to adulthood
- QFC blocks new liquor stores from some shopping centers

March
| Sun | Mon | Tue | Wed | Thu | Fri | Sat |
| 1 | ||||||
| 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 9 | 10 | 11 | 12 | 13 | 14 | 15 |
| 16 | 17 | 18 | 19 | 20 | 21 | 22 |
| 23 | 24 | 25 | 26 | 27 | 28 | 29 |
| 30 | 31 |

Video
Demo of the Week: TeachStreet.com
Share your thoughts!
Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.








