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Facebook got a $15B valuation from investors including Microsoft way back in 2007 [1] when they had only 50 million users (MySpace had 100 million users) and ab

Facebook got a $15B valuation from investors including Microsoft way back in 2007 [1] when they had only 50 million users (MySpace had 100 million users) and absolutely no advertising infrastructure in place whatsoever; they got this valuation and made $240 million in investor funding before they'd made a penny directly in advertising. Meanwhile, Pinterest already has amassed well over 10 million users in a very short time, sees enough hits daily to be a top-ten social networking site, and already has a number of advertising arrangements, particularly with retailers like the Gap and Nordstrom. If this is a bubble, it's been around for a while; and this doesn't seem like the most sterling example. If anything, this is less stunning than valuations of tech companies we've been seeing for many, many years. [1] http://www.wired.com/techbiz/startups/news/2007/10/facebook_future http://www.wired.com/techbiz/startups/news/2007/10/facebook_...

bentlegen 14y ago
That $15 billion number was inflated. It was valued at $10 billion in January 2009, at which point it had "made a penny directly in advertising". It also had 175 million users the following month, or 17.5x the number of users of Pinterest. http://online.wsj.com/article/SB124335674958054943.html http://online.wsj.com/article/SB124335674958054943.html http://www.insidefacebook.com/2009/02/14/facebook-surpasses-175-million-users-continuing-to-grow-by-600k-usersday/ http://www.insidefacebook.com/2009/02/14/facebook-surpasses-...
- muhfuhkuh 14y ago
  So, pricing it around 1/10th the price for 1/17th the users is execessive, but it should be worth at least a billion, right?
  - Travis 14y ago
    All else equal, maybe. You know what screams "bubble" to me? Everyone defending valuations by comparing the company du jour to Facebook. It's like arguing that Webvan wasn't overvalued because Amazon.com has been successful. Unless a seriously meaningful connection between Facebook and Pinterest is drawn, the comparison is meaningless.
    - deleted 14y ago
      [deleted]
    - jamiequint 14y ago
      Facebook's P/E is on par with Google's IPO P/E. So was Google a bubble company too?

bentlegen 14y ago

That $15 billion number was inflated. It was valued at $10 billion in January 2009, at which point it had "made a penny directly in advertising". It also had 175 million users the following month, or 17.5x the number of users of Pinterest. http://online.wsj.com/article/SB124335674958054943.html http://online.wsj.com/article/SB124335674958054943.html http://www.insidefacebook.com/2009/02/14/facebook-surpasses-175-million-users-continuing-to-grow-by-600k-usersday/ http://www.insidefacebook.com/2009/02/14/facebook-surpasses-...

muhfuhkuh 14y ago
So, pricing it around 1/10th the price for 1/17th the users is execessive, but it should be worth at least a billion, right?
- Travis 14y ago
  All else equal, maybe. You know what screams "bubble" to me? Everyone defending valuations by comparing the company du jour to Facebook. It's like arguing that Webvan wasn't overvalued because Amazon.com has been successful. Unless a seriously meaningful connection between Facebook and Pinterest is drawn, the comparison is meaningless.
  - deleted 14y ago
    [deleted]
  - jamiequint 14y ago
    Facebook's P/E is on par with Google's IPO P/E. So was Google a bubble company too?