One Billion Dollar dating site?
 

http://www.readwriteweb.com/archives...ne_billion.php


Excerpt:

"Comparison with Facebook

What really pricked up my ears was when Markus started to talk about click-through rates and how that compared POF with Facebook. As you'll recall, Facebook supposedly has a valuation of $15 Billion currently, thanks to Microsoft's $240 investment last week. Many people are skeptical of the Facebook valuation though, because Facebook and social networks are known to be poor at generating money from ads.

Markus told me that per page view, Plentyoffish has 5-10 times the click through rate of Facebook. So by his calculations, POF's 1.2 Billion page views per month is the same as 5-10 Billion Facebook page views per month. Facebook "only" generates 40 billion page views a month and yet it has a $15 Billion valuation. But the crux of Markus' argument is that despite having about 33 times the monthly traffic of POF, Facebook's poor click-through ads should bring the valuation models closer. Markus said that "over 40% of Facebook's pageviews are image related, ads in bad positions and users just generally looking to waste time." He said that "there are only a handful of sections on the site [Facebook] that will generate good click thru rates for advertisers."

So getting down to nitty gritty metrics, Markus concluded that "Facebook is only able to generate 10 to 15 times as many clicks on ads as my site and it's valued at 15 billion. Needless to say I'm watching ad supported business model valuations very closely." What's more, some of his direct competitors - e.g. Eharmony and match.com - are apparently valued in the billions. "

What got me is that his company makes only $10 mil a year and he thinks it is worth a Billion?

Since when is a company worth 100X its earnings? Maybe in the late 90's?

Kind of like how Youtube was worth over a billion dollars to Google?
WG

Or how Skype was worth $4+ Billion to Ebay then ebay had to do a write-down.

See my GFY post re "A $4 Billion dollar lesson in the value of HYPE"

billion is peanuts to google

Well, that's why I left pof as soon as I got there. Ads everywhere, right in your face. You have no where to click cause there's ads there. His click through may be high, but for the advertisers that might not be the greatest traffic, because it's mostly accidental traffic that leaves as soon as their site opens, but they still have to pay for the click...

You raise some good points. So basically, there would be a churn of advertisers due to the low ROI