MySpace killed Friendster only to be gobbled up by Facebook. Six years after NewsCorp bought MySpace for US$ 580 million it’s now sold for US$ 35 million. Google just launched its own “Facebook-killer” yesterday. There is absolutely no evidence yet whether Google Plus or any other competitor or substitute will bother Facebook. There is even less evidence about what’s “in the prices” – what prices? what metrics? what predictability of future cash flows? – so Social Media buyer beware.
We wrote last Thursday about LinkedIn’s IPO, which closed the first day of trading up almost 110% with some “interesting” valuation metrics. While there’s talk of other Web 2.0/ Socialmedia companies IPOing, Vanity Fair had a recent profile on Zynga – a “Web 3.0″ company, certainly a buzzword we’ll hear a lot in the next few months. We remain interested in the business models arising from social media – if not in the valuations surrounding the sector.
Very interesting article on ReadWriteWeb about a Facebook acquisition and one hypothesis of the reasoning behind it. As we pointed out in our post “Marketing revolution”, and as this guy wrote so well, for some companies “going local isn’t enough – (they) want local plus social plus targeted”. Plus mobile, and deals… Other companies aren’t standing still: one of our readers sent us a video of Google’s relatively new “Hotpot” service, and don’t forget Groupon, the subject of our New Year’s Eve bonus post.
We don’t intend to (nor do we like to) follow the daily news and the noise level associated with it. That said, occasionally something jumps out and deserves a quip, and Facebook’s reported $50 billion valuation is one of these. Goldman’s deal is great: even if they eventually cash out at a lower valuation, the underwriting fees from the IPO will be astronomical. Finally, Mail.ru – the russian investors formerly known as Digital Sky Technologies – is shaping up to be a “Web 2.0/ Web 3.0″ vehicle, albeit a potentially expensive one after its London listing late last year. One to track while Facebook doesn’t do the obvious IPO.
In this post we collect interesting links on Groupon, the inventor and world’s largest player in the collective buying market. We have always found the business model very interesting, and since Groupon is in the news with a US$ 950mm offering – having rejected weeks ago a US$ 6 billion offer by Google – our interest was renewed. Also noteworthy is the Brazilian Groupon “clone”, Peixe Urbano, which has dominated the local market and made Groupon’s life difficult in Brazil.
We’ve all heard about the Social Network movie, but a better time allocation is the Web2.0 Summit interview with the man himself, The Time Magazine Person of The Year, Mark Zuckerberg. Before we poke some fun at Facebook, here’s a thought: we do make fun of what’s relevant to us the more mainstream it gets, yet it doesn’t necessarily mark the end of an era. Think of Microsoft Windows, the OS we all have loved to hate for the last 25 years or so and it’s still there. The “winner takes all” aspect of the network effect in Facebook’s case is a fragile argument – what network are we talking about, and why will we have to interact with it the Facebook way? Just because we can’t see today what could topple Facebook, it doesn’t mean something – or likely a combination of “things” – won’t.
What took it so long? Now people can get an internationally-accredited MBA using the same platform they’re already so used to. The people behind this initiative claim that it didn’t take a lot of capex $$ to port their Moodle-based e-learning solution to an Facebook app. We’ve studied online education and while it is definitely not just about the underlying tech, going to Facebook can potentially help some schools leapfrog other schools’ sunken investments in proprietary technologies.
Zynga Games creates games for Facebook and MySpace. Its users number in the tens of millions, and many of them pay real cash for virtual goods to spice up their gaming. In fact, Zynga might well be making more money with Facebook than Facebook itself is. In paper, the business model seems great. We’ll probably get to know this soon, since Zynga is supposedly preparing for an IPO. Anyway it’s a huge reminder that disrupting technologies don’t necessarily imply that the inventors will make the most money – in some cases, any money. For new and old industries, always look at the entire value chain, be it suppliers, service providers, etc.
Facebook is just starting to tap the immense wealth of data generated by its 300mm audience, as reported in their blog and in the New York Times (free registration required) yesterday. This particular study on the “Happiness Index” is more of a teaser, a taste of what is to come. We don’t pretend to know [...]
