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I'm not defending the valuations of Twitter and Facebook (since I think they're too high), but I don't think it's useful to just look at their revenues for the

I'm not defending the valuations of Twitter and Facebook (since I think they're too high), but I don't think it's useful to just look at their revenues for the previous year and extrapolate a multiple and call it ridiculous. Both of those companies haven't had to focus on revenues. Their strategies were to get users first and then worry about money. To me the real test will be what is Facebook's revenue the first year they go public. If they haven't shown any significant growth, then I'd be worried.

michaelchisari 16y ago
Did you know that MySpace, on a per user basis, is twice as profitable as Facebook? One of the problems these companies will face, having coasted on not focusing on revenue for so long, is how to find ways to generate revenue without alienating your user base. It's a very tricky question, and done wrong, can do some serious damage to your site (I'm looking at you, Digg)