Facebook's Thiel Explains Failed Twitter Takeover

http://www.businessweek.com/technology/content/mar2009/tc2009031_743025.htm?campaign_id=rss_daily

by markbao • 17 years ago

41 15 17 years ago

tokenadult• 17 years ago

"Thiel won't say precisely where he values the company other than to say, 'It's worth more than people think it is.'"

I suppose that most investors desire a greater degree of specificity about a company's valuation before investing, especially in today's market.

tritchey• 17 years ago

I laughed out loud when I read that quote. Facebook's valuation is ENTIRELY based on what other people think it is worth.

moonpolysoft• 17 years ago

All companies are valued entirely based on what other people think they are worth. See also: the stock market.

prospero• 17 years ago

It's based entirely on what people think it is worth, given disclosure of the relevant details. No one outside of Facebook (and, presumably, its investors) has that information.

That being said, I don't think Facebook is being honest with themselves or anyone else with respect to their valuation.

djahng• 17 years ago

I think Twitter handled the issue of being bought with 80% Facebook stock very well. After all, how does Facebook even determine their own value? They have revenues, but not enough to justify a valuation as high as $9 billion. Facebook probably bases that valuation on the marketability of their user base. But how do you place a dollar amount on a number of users?

Devilboy• 17 years ago

I believe that marketing firms have some sort of price gauge per person depending on how much information you have on each person (and other factors)

jupiter• 17 years ago

Same question applies to the valuation of Twitter. What's even more delicate: should same methods of valuation be used for both?

jeroen• 17 years ago

I think this says a lot about that $9B valuation:

Twitter agreed on one condition: that the Facebook stock it received be valued at the price company shares garnered on the open market. Facebook blinked and the deal talks ended.

JulianMorrison• 17 years ago

Twitter would be stupid to allow their company to be bought by yesterday's men at Facebook. FB is a fad amusement for extroverts, Twitter is a communications medium. One is vastly more of a long term proposition than the other.

briansmith2• 17 years ago

Unfortunately, mocking of delusional fanboyism is hard to discern from actual delusional fanboyism.

zandorg• 17 years ago

Reading between the lines, they're not avoiding revenue solely to get/keep more users - I think they're doing a last man standing, and waiting for all their competitors to run out of cash and go out of business. Then they bring on the adverts, because there's no competition by then, and nowhere to jump to.

briansmith2• 17 years ago

Technologically, it is very easy to start a competitor to Facebook/Twitter (the scaling is the hard part, not the starting). So, there will always be competition until the biggest players can somehow raise the cost of entry by a few orders of magnitude.

Socially, I don't think it is that hard for people to migrate from Facebook/Twitter or something else. I think a lot of people think about competition in this area happening like a huge number of people stop using Facebook/Twitter and start using a competitor almost simultaneously. That is kind of what happened in the past, but only because the old social networks had serious problems. Now, significant shifts will still happen but they will be a lot more gradual. A lot of people are on multiple social networks already (e.g. Facebook, Twitter, GitHub, Mixi, Linked In, Flickr). Over time, each user's the proportion of page views on each site changes gradually but often significantly. Facebook/Twitter might remain the site (almost) everybody has in common, but I doubt it will continue to enjoy the huge share of users' attention it has now.

omouse• 17 years ago

>the scaling is the hard part, not the starting

The scaling isn't the hard part when you have some cash to hire ex-Facebook, ex-MySpace, ex-<insert large website here> employees.

rokhayakebe• 17 years ago

That scenario is not likely to happen because the same Facebook users are also members of other social networks. It is not as if you are Facebook user, you won't have an affair with Brightkite.

Ultimately Facebook will end up being two simple things: the biggest address book (maybe) and the biggest photo sharing site.

Everything else will go on to sites that specialize in one area. Users will go to Twitter to share links and update their status, they will use Gmail for messaging, I'll keep using HN for Discovery and not the FaceFeed etc...

donaldc• 17 years ago

And possibly the biggest events site, etc.

Basically, for the subset of things where having the most people you know on the site is more important than the fact that the interface of some other site is better, facebook may win out.

I know people who have resisted joining any social network that are succumbing and joining facebook. These are people who are not going to be signing up for half a dozen accounts on different specialty sites anytime soon. If facebook does it, they'll likely use facebook for it. If I want to keep in touch with them, or invite them to an event, facebook is the easiest way to do so. This means I'll use facebook more for these things, even though (unlike some of my friends) I'm perfectly willing to sign up for all sorts of specialty sites.

Facebook's Thiel Explains Failed Twitter Takeover

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