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TMFEditorsDesk (< 20)

Is Facebook 15 times as valuable as Twitter?

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September 17, 2009 – Comments (6) | RELATED TICKERS: MSFT

If you extrapolate a potential round of funding, that's the figure you get...this is similar to when Microsoft bought into Facebook back in 2007...that round of funding valued Facebook at $15 billion. Of course, there was a strategic element to Microsoft's buy-in...it's unclear if that's the case with Twitter's rumored deal. 

We've talked Twitter before...we've even had a Facebook vs. Twitter Face-off (Twit-off?)...the debate changes a little when you value Facebook at 15 times Twitter, though. Are both overvalued or is Twitter a "value play"?

-Anand (TMFBomb) owns shares in Microsoft and would love feedback. 

 

 

6 Comments – Post Your Own

#1) On September 17, 2009 at 10:39 AM, ajm101 (33.84) wrote:

Facebook is probably reasonably valued at $15B as a growth company.  200M users, pretty sticky, and a well regarded technology platform.... if you approach it as $100/user it seems plausible (I'm sure there are advertising and data mining opportunities that would support that).

I don't see the point of Twitter, still, outside of avoiding SMS charges as a txt-broadcasting tool.

 

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#2) On September 17, 2009 at 11:05 AM, Broken196 (< 20) wrote:

The only thing that has actual value is the space for advertising. Their product has NO value. Hence free service. Their community however is valued only by advertising.

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#3) On September 17, 2009 at 12:18 PM, TMFMileHigh (72.97) wrote:

Assuming TechCrunch is right, I called this one months ago.

http://www.fool.com/investing/high-growth/2009/02/17/why-twitter-could-be-a-billion-dollar-business.aspx

On Facebook: No, it isn't worth anywhere near $15 billion. Last report I heard was that some employees were cashing out at an assumed $6.5 billion valuation. Previously, Russia's Digital Sky bought 2% of the company at a presumed $10 billion valuation:

http://www.businessweek.com/technology/content/aug2009/tc20090819_747999.htm

Neither company is a value play. In each case, venture investors are betting on extracting value from engaged users. But if I had to choose between the two -- for the very long term -- I'd take Twitter because I believe it offers more business value.

 FWIW,


Tim (TMFMileHigh and @milehighfool on Twitter)

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#4) On September 17, 2009 at 12:23 PM, mikecart1 (99.44) wrote:

Twitter is only good if you want to know what famous people or celebrities are doing.  If you are neither famous or a well-known person outside your group of friends, you being on Twitter = LOSER.  No one cares what you are doing.  You'd be better off getting off the computer, out of the house, and meeting new people and living your life.

Facebook became Myspace which became worthless.

Twitter has always been worthless.

I use neither anymore. 

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#5) On September 18, 2009 at 12:20 PM, TMFDiogenes (86.70) wrote:

Yes, probably.

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#6) On September 30, 2009 at 1:22 AM, kirkydu (95.52) wrote:

One really needs to take great account of the fact that Twitter sucks and that Facebook actually helps people connect a bit.  Othere than that, both will have a hard time monetizing their services, though since Facebook has more screen space it should be better.  Most Twits use a handheld and I think it's going to be a long time in coming before those are monetized for ads and services like the geeks looking for funding hope.

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