A number of otherwise smart people suggest that Napster should be worth “at least as much as Last.fm”, whom CBS bought for $280M.

Napster? They’re worth $70M, and if you look at their net value, it’s trading at, hum, $0.

Last.fm was private when CBS bought it; Napster is publicly traded. What does that say? Well, for one, Last.fm was hip in 2007 when CBS bought it (see our story here). Napster hasn’t been cool since 2000, then Bertelsmann invested in the company and the other media companies killed it.

Napster was one of the coolest and disruptive forces, but today’s Napster has very little to do with that Napster, other than in name, which Roxio bought. I’d like to a story but I’m lazy now. Ok, not cool, here you go.

We’re not trying to compare Last.fm’s cool factor with that of Napster, which ever Napster you refer to. The point is: being private is the new public. If you want to buy Napster (2008’s Napster) all you need to do is buy up shares in the public market, or approach the company and make a tender offer adding a premium to the most recent share price. With Last.fm, there was no market for the shares.

That’s ironic.

Historically, startups traded at a discount specifically due to that liquidity discount. Today, being public is a nightmare, you find yourself knocked over, lying on your back, legs up in the air. Not a nice position to find yourself in.

Alternatively, if you wish to buy a private company, you have to act cool… anything else is a sure-fire way to walk away empty-handed.

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