Web 2.0's Business Model: Find The Biggest Sucker

from the do-you-take-checks? dept

Fri, Mar 31st 2006 9:08am — Carlo Longino

The fallout from the story earlier this week that said Facebook was holding out for $2 billion continues, with the figure getting debunked left and right. At an investor conference, the head of Fox Interactive Media (which bought MySpace for $580 million), said his company wasn't interested in Facebook for $2 billion, but that he is "intrigued by some of these start-ups in the Web 2.0 space" because they're not expensive, and they don't have a business model. Both assertions are open to debate: the price tags being tossed around for some of these companies certainly aren't cheap, and the guy doesn't seem to realize that many of these companies do have a business model -- it's convincing people like him that they're worth ridiculous amounts of money.

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Denfro Magic, 31 Mar 2006 @ 10:05am

Yea
I'd buy that for $1
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Swati, 31 Mar 2006 @ 11:17am

I still don't see how myspace is worth 580 million. Either people have no value of money or...they have no value of money.
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Bum, 31 Mar 2006 @ 11:22am

Data mining is the new gold rush
The demographic info is what they must have paid for. I never read their privacy policy or used their site though.
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DreadedOne509, 31 Mar 2006 @ 11:26am

I think it's funny as hell. Just glad the government doesn't spend enormous amounts of money on worthless crap. Oh wait...

On a more serious note, what in the world could possibly be worth $580 million in myspace? The demographics by themselves certainly are not worth that much. The advertising revenue isn't. What do they know, or think they know that the rest of the world doesn't? Curiouser and curiouser.
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megabump, 31 Mar 2006 @ 11:29am

Demographics
I think you underestimate the value of someone's personal information. They are essentially paying for everyones information that they provided when they signed up.
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Andrew Strasser, 31 Mar 2006 @ 11:57am

Yeh.
Who knows what now and who owns them through where and what group has an agreement to share that information with who.
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pedalfast, 31 Mar 2006 @ 12:36pm

demos?
hey #5. i'd hate to break the news that when you join myspace, you dont offer any information about yourself other than name, country, gender, and birthday.

Most importantly, it's common knowledge that everyone lies about that stuff on community sites.

580m for fake data? sounds like a wonderful deal.
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BlackCow, 31 Mar 2006 @ 1:05pm

pssh
myspace is stupid.
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Anonymous Coward, 31 Mar 2006 @ 1:16pm

Re: pssh
agreed Myspace is retarted
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GravAxis, 31 Mar 2006 @ 1:35pm

agreed - sorta
MySpace is for 10 yr olds. I'm sure they love it. Sorta like I loved my Tonka truck...
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will, 31 Mar 2006 @ 2:22pm

missing the point
Any website that gets as much traffic as myspace is extremely, rediculously valuble. User info is secondary. Even if the site collected no info, but had that much web traffic it would still sell that much.

on the internet:

traffic = money
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Swati, 31 Mar 2006 @ 2:39pm

Anywhere in the world, only money=money.

If that traffic is not generating money (580m at that), it is not equal to money.
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hammer, 31 Mar 2006 @ 4:28pm

yep...it is
you wouldnt consider 60+million registered users as being worth rediculous amounts of money.
consider every page have 2 ads, and each person visits an average of 10 pages a day, wow thats like 1.2 billion ads that were viewed, not to mention some people DO click on those "fun" little flash ads they have....and there are more than 60 million users thats just an estimite of a number i say a while ago.
the guy above was absolutely right
traffic=money
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Anonymous Coward, 1 Apr 2006 @ 12:15am

FACEBOOK is going to be WAYYY more valuable than myspace IMO.

Myspace is gonig out, fast. It's full of spam and crap.
Facebook is the next myspace.
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Anonymous Coward, 1 Apr 2006 @ 6:28am

Oh, how history repeats itself. The dot-com bubble is being blown again. It will soon pop.
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Sohrab, 1 Apr 2006 @ 5:49pm

the problem with facebook is that its very limited. Just to college and HS students who both dont have any money, Myspace, anybody can be on it
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ceejayoz, 2 Apr 2006 @ 1:36pm

Re: #16
Sohrab, anyone who has taken an intro marketing class knows that the 18-25 demographic is TREMENDOUSLY valuable. To say they don't have money is absurd.
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ChocoTuar, 2 Apr 2006 @ 7:15pm

Re: agreed - sorta
Not necessarily ten-year-olds. I think it's more for teenagers to feel like they know how to use a computer. The funny thing is, MySpace accounts for maybe a billionth of a percent of information there is to know about a computer. Without MySpace, computers would be of nearly no use to most of the people that use it.
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ChocoTuar, 2 Apr 2006 @ 7:18pm

Re: yep...it is
OK, then how is money calculated in terms of "viewing" the ads? 1.2 billion is a lot, but not if it's only about 5 cents per click. I haven't done the math, but 580 million dollars might take a bit to get to.
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pwb, 2 Apr 2006 @ 9:08pm

"what in the world could possibly be worth $580 million in myspace?"

MySpace's home page by itself generates $500k per day. You don't have to like MySpace or think it's viable long term, but $580m was a steal.
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