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Facebook Is Now 5th Most Valuable U.S. Internet Company

Yesterday came news that Microsoft invested $240 million into Facebook, valuing the company at $15 billion.

How much is $15 billion? It’s hard to understand how much money that really is. But this evening a friend helped put it into perspective in a conversation about the deal: among the pure-play U.S. Internet companies, only Google, eBay, Yahoo and Amazon have larger market capitalizations. Their annual revenues range from $6 – $11 billion/year. IAC, Salesforce, Monster.com and all the rest trail significantly.

Big Internet properties like MSN/Live.com, AOL and MySpace can’t be directly compared because they are part of larger corporations. Still, its easy to imagine that Facebook, at $15 billion, is perhaps worth more than AOL and MSN/Live.com. Is it worth more than MySpace, which was acquired for a mere $580 million in 2005? The total value of parent company News Corp., with $30 billion or so in annual revenue, is just $70 billion.

Of course, Facebook is not being valued by the public markets like the others. And it may be some time before there is any updated valuation for the company. They are now positioned with a huge war chest of cash (the actual amount raised is likely above $240 million; rumors of a hedge fund or other financial partner who put in additional cash are already swirling) and a massive stock valuation. They can make acquisitions of key technology and talent without spending much. And they can go for years as a private company on that cash. Even with the 700 employees the company expects to have next year, they shouldn’t spend more than $50 million or so per year to run the company.

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October 26, 2007 Posted by | financial, microsoft, news, social networking | Leave a comment

Facebook labelled a $5 billion waste of time

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Richard Cullen of SurfControl, an internet filtering company, estimates the site may be costing Australian businesses $5 billion a year. “Our analysis shows that Facebook is the new, and costly, time-waster,” he said. The report calculates that if an employee spends an hour each day on Facebook, it costs the company more than $6200 a year.

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August 20, 2007 Posted by | social networking | 1 Comment

Fetus makes friends on Facebook

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Claire Gillis and Luke Waring thought they’d keep everyone updated on their pregnancy via a Facebook profile — and, just to be fun, they created the profile from the perspective of their unborn child, but much to the couple’s surprise, it turns out that a whole bunch of people they’ve never met would like to be friends with a fetus……

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August 17, 2007 Posted by | social networking | Leave a comment