How much is Facebook really worth?

I read this article this morning about MySpace. It just goes to show how an industry can change so quickly. Facebook is probably around 50 times bigger than it was when it overtook MySpace, but all it needs is the next fad and Facebook could be the next $35 million dollar sale, which is a far cry from the estimate valuation of $70 billion.

The users of Facebook aren’t the customers. How much do you pay to use Facebook? The users are the free source of information which gives the service substance, but in the end, the real customer is the advertiser. If advertisers find a better place to advertise then the industry could quickly change again.

It is often felt the Achilles heel of Facebook is privacy, but really it is how much value Facebook brings to the advertisers. Facebook has an estimated 700 million users bringing in ad revenues of around $2 billion this year. That means as user you’re only worth around $3.12 a year. So next time you’re annoyed at Facebook and feel they should look after you better, just remember, you aren’t worth much to them. You aren’t paying the bills;-)

News Corp has sold struggling social networking site MySpace for $35 million, a fraction of what they paid for the site six years ago... Read More

- Kelvin Eldridge
www.OnlineConnections.com.au