Bloomberg / Paid Content report that Facebook is not for sale. I think this is the best decision for Mark Zuckerberg and crew. No way would he fit in at Yahoo!, IAC (two of the many companies who courted it).
We ran some numbers and estimated that by 2010, Facebook could be worth $2.3 billion, relying on some stats on the potential size of social networking ads. Of course, investor Thiel us measuring the $8 billion value as a function of MTV’s value, which we humbly think is somewhat akin to comparing apples with oranges. We don’t doubt that Facebook could be worth much more over time, but to throw out a value like $8 billion.
Read more on Facebook here.
One thing is certain: Thiel borrowed a page from Rupert Murdoch, owner of News Corp., who bought MySpace; along with IGN and Scout to from Fox Interactive Media.
Earlier this year, Murdoch boasted that MySpace was worth $6 billion. We like the acquisition of Myspace and placed it as the Top Web Deal of All Time, but $6 billion for MySpace? Mr. Murdoch, close, but no cigar.
We think not. Murdoch and a subsequent UBS report suggest that Fox Interactive Media (of which MySpace is a member of, along with its other acquisition IGN) is worth more separate than combined.
So what’s Facebook’s value relative to MySpace (regardless of what each one is worth)?
Facebook’s visitors in the U.S. doubled to 11.6 million from a year earlier, according to Nielsen//NetRatings, a market researcher in New York. Users at its biggest competitor, MySpace, bought by News Corp. for $580 million in 2005, more than doubled to 53.6 million, Nielsen said.
But, this is like comparing apples to oranges (hmm… where did we hear that in this post) because MySpace is an anything-goes jungle, whereas Facebook is somewhat more, well, less chaotic.
My younger brother, who is not so young anymore at 18 is in both company’s cross-hairs and he swears by Facebook, saying that MySpace is too crazy for him. Too crazy for an 18-year old? I guess so. MySpace is on its way to becoming the directory of people, which gives it a lot of value, but it also makes it hard to be monetized. We just covered how hard it will be for MySpace to beat out Yahoo! in monetization rate, and we’ve previously outlined how Google and Yahoo! are different to monetize because their business is different.
That’s why we think Google overpaid for the MySpace search business.
And, since 2006 was a year when monetization ability was scrutinized amongst peers, we agree that Facebook is much easier to monetize than MySpace. So, given Thiel, Zuckerberg’s style and approach, maybe duking it out as an independent player makes sense. After all, advertising is the holy grail online and Facebook is well positioned to be a leader in the field.
Disclosure time: Of the companies mentioned above, I own Yahoo!
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WatchMojo NewsletterI hate the term killer app, but this week I’ve used it twice. First time was when I suggested that Google could bundle products and create a killer app against Salesforce.com. Read that here.
Anyway, onto the news of the day:
When I was finishing up my studies, I was working for VISA. This was 1998-2000, I graduated in June 1999 and I figured that anyone who could cut through the red tape and bridge the gap between payment systems and wireless networks to create a practical and convenient digital wallet would win.
The natural step was for a cell phone to bundle in a payment system, but both banks and telcos are notoriously slow and backwards when it comes to implementing new products and mainly, striking partnerships that make a difference. They’ll strike partnerships that consumers don’t care for, for example.
Some 6-8 years later, Cingular launches this test:
Some Cingular Wireless cardholders in New York City will be testing a new service that allows them to make purchases with their cell phones.
The mobile operator said Thursday that it’s teaming with cell phone maker Nokia and financial institutions Citigroup and MasterCard Worldwide to trial new phones that have MasterCard PayPass contactless payment capability.
The trial, which is expected to last three to six months, will help the companies evaluate the speed and convenience of the “tap and go” payments using mobile phones.
A group of Citi MasterCard cardholders with Cingular Wireless accounts have already been selected to participate in the trial. The participants will receive a Nokia handset with “near-field communication” (NFC) technology and the MasterCard PayPass payment function built in. Using the phone, trial participants will be able to make purchases wherever MasterCard’s PayPass is accepted by simply holding their phone near the card reader. The payment is then deducted from the cell phone subscriber’s account.
MasterCard PayPass service is already being tested in New York City subway stations using plastic cards issued by Citibank. The cards can also be used at 1,000 Coca-Cola vending machines in Philadelphia. Other merchants such as McDonald’s and AMC movie theaters also accept the card, and in turn will accept the PayPass phones.
Contactless payment cards distributed through banks have been gaining popularity over the past several months. As of September, more than 30,000 U.S. merchant locations had hardware in place to read and authorize contactless payments. And more than 13 million consumers already have the payment devices, according to research and consulting firm Celent.
The next logical step is for the PayPass technology to be included in mobile phones, according to Cingular executives.
Oh, yeah! Why not launch it (include the technology in new phones). This seems like a half-hearted effort, no? Anyway, this is a step in the right direction.
Cingular, of course, is not the only one doing this. From the same article:
Consumers in South Korea and Japan have already been using cell phones to pay for things. NTT DoCoMo has been selling contactless payment phones for more than two years. Today most of the phones are used for small transactions that are often paid for using cash. But in the future, supporters of the technology expect it to be used more like a credit card. The scanners could also be programmed to download coupons or advertisements from merchants directly onto handsets.
Nokia isn’t the only handset maker exploring this technology. Other companies, such as Samsung, are also developing devices to be used for payment. Muzibul Khan, vice president of product management and engineering for Samsung’s handset unit, told attendees at the company’s Mobile Summit in New York on Thursday to expect more news on “mobile wallets” in 2007.
Motorola also announced earlier this year that it is building handsets equipped with a specific chip to pay bills. The M-Wallet service will initially allow cell phone users to do banking chores and to pay bills at participating retailers.
Maybe I am missing something, but can’t someone get on a plane and go get whatever they are using in Asia and bring it back. Isn’t that globalization at its best. All right, we’ll stop being smartasses.
I never read Valleywag before Nick took control, no, not that Nick, the other Nick. Oh, whatever.
Point is, when Nick Douglas was replaced by Nick Denton with, well, Nick Denton, it made the news and afterwards I began to track the site. I find that it’s a great source of information, like many do judging by the numbers. The critics might have their reason to complain, after all, everyone is entitled to their opinion, fitting, since Valleywag is one part news, one part rumor, one part opinion; which seems to be the right mix of ingredients for a successful blog.
Alas, this past week, everyone from Fred Wilson to Matt McAlister have been singing the praises.
Earlier this week, Valleywag “broke the rumor” (or should it be news) that Time Warner’s AOL was about to undergo major changes, including Joe Redling, John McKinley, Kevin Conroy and Jim Bankoff. At the time, it turned out to be wrong, well, at least premature.
And, as a result, a lot of people said that this was an example of Denton’s editorial style, and were not being kind with the observation.
Yet today, Paid Content seems to confirm the reports, suggesting that Valleywag was right after all. For what it’s worth, we scanned the archives and see why Douglas himself was picked for the initial mandate, and agree that Valleywag the new format is probably more in tune with the market it strives to target. It’s not that we don’t like sex, drugs and rock ‘n’ roll, it’s that, the name of this blog notwithstanding, the IT space is not that hip to merit having its dirty laundry exposed in such a manner.
All to say, shocking to see what is happening at AOL. Another case of old media executives shoving out the new media types now that old media is intent of putting its fingerprints all over the faster growing divisions.
This is something that made our Top 10 High Tech Trends of 2006.
