Re:Pmarca: OK, you're right, it IS a bubble
by iamelgringo on Monday October 08, 2007 @07:46PM
(#65032)
I concur.
It's a free market, and Facebook's valuation is whatever someone is willing to pay for a piece of Facebook. If Big Co purchases a piece of Facebook for $500 million, then someone at Big Co made a guess that either the software, the community or the people were worth that much.
Mind you, I don't think that Facebook has a 10 billion dollar valuation, but that's a moot point, I don't have the $500 million to purchase those shares.
My hunch on the Facebook deal, though is that Microsoft is trying to beat Google to the punch and wants to provide search services to Facebook. The software, community or people might not be worth that much to them, but I'm sure that keeping Google out of Facebook probably is worth $500 million to them.
What's the worst case scenario for Microsoft? Google doesn't get Facebook's search, Facebook goes poof in a couple of years and Microsoft is out $500 million. No big deal. Microsoft's cash reserves are well over $25 billion anyway. They have to spend it on something. Might as well spite Google with it.
It's a free market, and Facebook's valuation is whatever someone is willing to pay for a piece of Facebook. If Big Co purchases a piece of Facebook for $500 million, then someone at Big Co made a guess that either the software, the community or the people were worth that much.
Mind you, I don't think that Facebook has a 10 billion dollar valuation, but that's a moot point, I don't have the $500 million to purchase those shares.
My hunch on the Facebook deal, though is that Microsoft is trying to beat Google to the punch and wants to provide search services to Facebook. The software, community or people might not be worth that much to them, but I'm sure that keeping Google out of Facebook probably is worth $500 million to them.
What's the worst case scenario for Microsoft? Google doesn't get Facebook's search, Facebook goes poof in a couple of years and Microsoft is out $500 million. No big deal. Microsoft's cash reserves are well over $25 billion anyway. They have to spend it on something. Might as well spite Google with it.