Quote:
Originally Posted by Slutboat
No we're not all here to make money, wrong.
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Not trying to be a dick, but am wondering if you're not here to make money, why are you here?
Here is the meat and potatoes from the ValleyWag article:
Quote:
Disgraced stock analyst Henry Blodget pauses to dream up a fantasy valuation for Craigslist, and comes up with $5 billion. The numbers he relies on are faulty, starting with Craigslist's revenues. Blodget relies on a recent report by Classified Intelligence, which pegs its revenues for 2008 at an estimated $81 million. That's extremely low; insiders tell me the real figure for last year was in the range of $100 million to $150 million.
Blodget's costs, too, are off base. He estimates per-employee labor costs at $125,000, reasoning that founder Craig Newmark and CEO Jim Buckmaster run things "like a nonprofit." Try "like a prison camp," Hank; Newmark and Buckmaster pay ludicrously low salaries and don't offer any equity, having learned from their (highly profitable) mistake in issuing shares to an early employee. True labor costs are more likely in the range of $4 million to $5 million. A commenter on Blodget's post revises his estimate of bandwidth and server costs down from $50 million a year to a more realistic $7.5 million. That gives you a business with something like 90 percent profit margins. Where does the money go? Not to the Craigslist Foundation, by and large. Mostly straight into Newmark and Buckmaster's pockets, from what we understand.
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Also keep in mind both these articles are from early 08, before things went to shit. In today's market you're
lucky to get a 5x EBITA asking price for a business, let alone 10x or greater like that wingnut was saying.
IMO a business is only worth what someone is willing to pay for it. Factor in the current state of the economy with the added dissapointing returns on the majority of the large multi-million dollar dot com aquisitions- not to mention the controversy over the product- no one's going pick this up in the billion dollar range.
