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Friday, November 2, 2007

See How much Microsoft Pays to Facebook.....

Microsoft pays Facebook $240 million for a 1.6% stake. Dvorak reacts:

Microsoft is going to place ads, sell ads, broker ads and do some sort of revenue split with Facebook. For that, Microsoft pays $240 million and gets 1.6% of the company. When you extrapolate the valuation of Facebook and run the figures against the user base of around 50 million, it means that each and every user is tallied at $300 a head.

With estimated revenues of $150 million, Facebook would normally be valued at between one times its revenue to perhaps 10 times revenues, if it was growing like crazy. With a valuation of $15 billion, this would be 100 times revenues. If you owned a company with total revenues of $50,000, then Microsoft would value your business at $5 million. Link.

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