Posts Tagged ‘valuation’

I was listening to NPR the other day after the 15 billion valuation of facebook. The commentator and guest on the show were questioning . First the valuation came from a Microsoft investment of 240 million dollars for 1.6% of the company.

In any case why is the 15 billion dollar valuation important? Well it’s mainly because some people say that facebook is just a fad, which may be true. However I contend that it is a wise investment for Microsoft considering their need to be a bigger player in the online advertising arena.

The power of social networking is just starting to be realized I believe, the idea that we’re all connected by 6 degrees of separation is what drives the model. Recently I was with a good friend of mine who runs a non profit here in Dearborn and we were discussing their annual fundraising Gala which they hold to basically keep them going for the next year. I suggested to him he post an event on Facebook since he already has an account, so he did and within 5 minutes there were 200 people invited to the event. With those kinds of results, and statistics that show the average Facebook user stays online for almost 6 hours a month (that’s 12 1/2 hour Television shows) I think that a $15 billion is actually fair.