Forum Moderators: goodroi
Some friendster investors [bayarea.com]
Tim Koogle worked for Yahoo (Former CEO) and Michael Moritz was on the board there.
Peter Thiel former PayPal Chief Executive worked with guess who Michael Moritz, who represented Sequoia Capital's investment.
And guess who else invested in Friendster Ram Shriram, yes he's already on the Google board.
I must say it it sure interesting, i am not trying to make any specific point just some observations.
[edited by: lazerzubb at 2:25 pm (utc) on Sep. 30, 2003]
Microsoft have Bill Gates ... Google wants Google Dates
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Because of the lack of REAL assets and infrastructure and real face to face business.
There stock will go from 100 dollars to 5 cents.
I mean maybe 1 billion is probably more accurate, i mean what happens when yahoo and aol drop google.
I mean i think it is alot smarter to wait for the competition to show there goods before making an investment mistake.
Sid
So a few thousand times that... yeah, I can believe $18 billion...
it will be a disaster for the stock.
I think its very bad idea to overvalue it
Add that horde of cash, raised by the IPO, to Google's value. It will get the cash so add it to Googles value.
Now, Google has $X billion in cash on hand from it's IPO.
Where does that money go?
X goes to the holders of different rounds of financing. Reduce Google's value accordingly.
X goes into Google's coffers, yes?
Google now uses those dollars to acquire new technology (buy companies, buy patents). Google branches into new realms: Google auctions? Google dating?
Google expands the brand.
At the end of the day it wouldn't surprise me if Google has a market cap that holds in that kind of range. Smart management. Conserving and expanding the brand and brand experience.
Of course, in the ether world of the Web, anything else is possible.
I mean google will always be good, but the 18 billion value is unjustified, and until it does, we should not ASSUME it should be that value, cos markets can be volatile.
Doesn't the $X go into the shareholders' pockets and not Googles? I don't follow the logic.
They would have to do a rights issue after the IPO to get investors' cash. If they overvalue at the start and the share nosedives, a rights issue will be a disaster.
No logic involoved here. :)
Just an extremely inflated evaluation, IMO.
Now friendster, that's an even bigger joke. It was overhyped from the beginning. Anyone here on it? I tried it. No big deal at all. A "cute" idea that isn't well implemented is as far as I'd go. I CAN'T believe Google is considering the purchase. What a waste.
Any good programmer could create a better friendster in a pretty short time. Nothing special, no barrier to entry, no serious revenue model (unless thing changed a LOT since I last looked), makes no sense. The founders probably have a damn good friend or relative that is a hotshot VC.
Actually, the anecdotal evidence about google's earnings would make that about right....
But if their revenue this year was predicted at even 1 billion, AND they just announced that they have 150,000 advertisers - compared to Overture's 95,000 (and they are on track to do 1.2 billion in revenue) then Google is spot on.
Consider that their market share of the search market / and that they cover at least the same search volume Overture does - then, add to that the fact that they have 1.5 times the number of advertisers paying them money.
Given that, I'd put this year's revenue to closer to 1.5/ 1.8 billion, so at the high end of that, they are valuing themselves at 10 times *current* annual earnings. For a public company, that is *very* conservative - for a private, very agressive.
Now consider that it was in October that they had an "internal deadline" of filing some paperwork that was only required of publically held companies, some "sarbanes - oakley act" or some such, don't remember the exact name off hand.
With all the above outlined, imho, Google is right on to claim an internal valuation of that - even higher is possible, but given the instability of the search engine space over the long term, it makes more sense to go conservative - as they have done here.
Sure Google should potentially be valued higher than Yahoo.
Its just that Yahoo is way overvalued (PE 124). Price Earnings still have to find reality with some stocks.
I do not see Yahoo increasing its current profit tenfold in the years to come.
Given that, I'd put this year's revenue to closer to 1.5/ 1.8 billion, so at the high end of that, they are valuing themselves at 10 times *current* annual earnings. For a public company, that is *very* conservative - for a private, very agressive.
For those of you who've never taken accounting:
There is a HUGE difference between revenue and earnings!
Not that I'm an expert, but a service company selling for 10x sales in not at all common.
This time I have something to sell. :)
The first would be there is a rumor that Friendster may start to charge, perhaps if google comes in they can absorb the cost and add features like they did to Blogger.
The second may be a slight movement toward to the portal world, while still keeping its search seperate. Message boards, personal messages, linking by interests...
The third would be millions of impressions/page views and there could much targeting for the ads, think interests and favorite music.
Personally I think Friendster could be much improved and is not a perfect community, however, it is a start and if Google does not buy it, someone else might.
