] HipMojo.com » Facebook Not for Sale - Worth $8 Billion, According to Investor Peter Thiel

Facebook Not for Sale - Worth $8 Billion, According to Investor Peter Thiel

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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Posted By: Ashkan Karbasfrooshan | Dec 15th

One Response to “Facebook Not for Sale - Worth $8 Billion, According to Investor Peter Thiel”

  1. SFluxe » Billionaires 2.0 Says:
    May 8th, 2007 at 1:36 am

    […] Thiel.  Speculation is that one of his companies, Facebook, will do an IPO in 2008. The value? Thiel has claimed it’s worth $8 billion. Share and Enjoy:These icons link to social bookmarking sites where […]

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