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Originally Posted by TheDoc
They have reports on what the average active user earns the system based on current ad methods-projections for ads, what is spent on ads, what is earned on the products of those ads, and so on...
FB has like a $1000 per user value, doubled in the last two years, 500 million active users - do the math.
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Yup, sites like this are valued on a per user value...the same as when a cable company gets bought...they aren't based on revenues, rather the number of users and a per user value.
There is more to it than just revenues generated. For example, if Google bought out Twitter...they would only generate a certain amount of revenues from Twitter itself, BUT, would make more on all of that user data. The more people tweet and expose their likes, dislikes, buying trends, etc. Google could use that data to enhance their own advertising. The more data they have access to, the better they know how to serve up extremely tailored ads.