Quote:
Originally Posted by SykkBoy
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.
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I actually had a cable company example written up and deleted it... you'll see why...
Many moons back we put in a bid on a small Cable Company. We ended up not getting the bid, but if I remember correctly it was $15 net profit per user - and roughly 10 years to make our return, if we got it. I don't remember what it's overall value was - but I damn sure remember arguing over a 10 year return when porn was returning for us in days, not years.